Pols act to keep UNICEF in Big Apple

Real Estate Weekly, May 5, 1993 by Lois Weiss

The UNICEF executive board is scheduled this week to decide the fate of the international relief organization's location. Although a decision could be made to put off making the choice to a later date, sources report several committee members are eager to come to a consensus and move on to other issues.

At the heart of the "conundrum," as UNICEF's Director of the Office of Administrative Management Timothy Boakes, puts the discussions, is whether to stay in Manhattan or relocate to New Rochelle. UNICEF's Executive Director James Grant recommended in February that the group and some 900 employees stay in Manhattan while its Advisory Committee on Administration and Budgetary Questions favors the Westchester location.

New Rochelle has laid out the red carpet for the children's relief organization and envisions an entire United Nations campus for the community. UNICEF would have its own building under that plan, which would contain a total of 600,000 square feet and housing for 1,000 employees. Starrett Housing Corp. and HRH Construction Corp. made the proposal in conjunction with the City of New Rochelle.

New York City, however, proposed and obtained passage of state legislation that extends UNICEF's tax exempt advantages under its relationship with the United Nations Development Corp. to certain Manhattan properties that sent it proposals for expansion.

Additionally, the city has paved the way for UNICEF to own its own building outright by converting its rent to equity payment obligations that would terminate in 2026.

"There are no conditions on the ownership and they have even given us the land," said Boakes.

Arthur J. Draznin, president of Harper-Lawrence, Inc., agreed that if UNICEF is able convert their lease obligation to an ownership position "that would complement their needs."

The measure was signed by Governor Mario N. Cuomo last week to the despair of the Westchester legislative delegation. The bill would permit tax exemptions for those portions of the properties that UNICEF would use for its exempt activities. "We had discussions with the owners of these properties," said Boakes, who explained under that scenario, the organization would take over the entire 203,000-square-foot UNICEF House including two floors of current apartments that are not a part of its deal, and obtain a sites and is eager to make the consolidation by 1995.

The buildings referred to specifically in the measure are 633 Third Avenue, 685 Third Avenue and 854 United Nations Plaza, aka 345 East 47 Street-- the United Engineering Center. UNICEF's current 180,000-square-foot world headquarters is located in a portion of 3 U.N. Plaza but they are running out of room.

Boakes said the United Engineering Center was just taken off the market and there is a chance the city might condemn it. Officials there would not comment and city officials did not return phone calls.

On the other hand, 633 Third Avenue, Boakes said, "wanted too much money" and UNICEF only needed a few floors. That building is in limbo while mortgagor Travelers Insurance company and owners Stanley Stahl and Joseph Comras are in discussions. Real estate executives said the 1 million-square-foot building carries a mortgage of $145 million.

The American Home Products building at 685 Third has 21 stories and 340,000 square feet. Eastern Consolidated's president, Peter Hauspurg, said the company had expressed interest in an operating net lease but the building has not been on the market for a sale for two or three years. "They are building a new headquarters in New Jersey so it is a logical possibility that the property might be sold," he said.

Hauspurg observed that if UNICEF sees another property of interest, there is no reason the legislation cannot be amended to add another building.

Draznin said keeping UNICEF where it is currently located would be preferable. "I think New York City has to make every effort within their capabilities to keep UNICEF in Manhattan and I believe that UNICEF would truly prefer to stay in New York," he said.

Both Congresswoman Nita Lowey and State Assemblywoman Audrey Hochberg have been trying along with other Westchester officials and legislators'to sway the group to the New Rochelle location. "Audrey would love to get it in New Rochelle," said a spokesperson. In a statement, Lowey said the New Rochelle option "ensure[s] that U.S. tax dollars going to the U.N .... are used efficiently and effectively."

Even so, there are reports that Gov. Cuomo has proposed barring Industrial Development Agencies from backing the New Rochelle bid. Mayor Timothy Idoni said the city has its own $200 million in bonding capability.

The executive board does have an option of moving most of its employees to New Rochelle and keeping a small presence in Manhattan for its U.N. and mission staffs.

Boakes said a letter committing Starrett to a building process of no longer than 15 months has already been signed. Boakes, who is charge of real estate all over the world for UNICEF, said his investigations found that Starrett had already put up a building in Brooklyn in that time that was one third larger than the proposed size of the UNICEF facility.