Mr. Chairman, I offer an amendment. Mr. Chairman, I yield myself such time as I may consume. This amendment is more symbolic than it is substantive. It is really giving an opportunity for Members on both sides of the aisle who feel…
Mr. Chairman, I offer an amendment.
Mr. Chairman, I yield myself such time as I may consume.
This amendment is more symbolic than it is substantive. It is really giving an opportunity for Members on both sides of the aisle who feel frustrated with the increased cost for things that happen around here. We know that we start out with a project that costs $40 million, and it ends up costing $550 million, and I am talking about the tourist center right outside the Capitol. We saw what happened in Boston with the Big Dig.
Basically, my amendment says before we give any money to the United Nations, $1.2 billion, that we should have a study. We should have a GAO audit. We should have some kind of reference put down before they go out and spend this money.
The U.N. wants to spend $1.2 billion in renovating the New York City United Nations headquarters. Then they want to spend $650 million to house the organization in the meantime for rental purposes or existing office space in Manhattan and elsewhere, so we are roughly up to $1.8 billion. It could be $2 billion. It could be $3 billion. I think before we allow the United Nations to spend any of this money, why do we not have a GAO audit, or why do we not at the very least impanel a panel to determine how they are going to spend this money? Because we know the rental price of real estate in New York, it costs a lot of money. It keeps going up every year. There is no doubt that the estimate that the U.N. gave of $1.2 billion and roughly $650 million to relocate while they renovate is very small. These initial financial estimates probably are not accurate. As I mentioned earlier, look at the Big Dig in Boston, the money we put up there, it is still going on. It is just a total overrun.
I just urge my colleagues to look at this, not so much as substantive because the money was appropriated. It was in last year's bill. This is basically saying, before we go ahead and give this money, we should tell the United Nations, give us a plan, let us have an opportunity to review the cost before you go ahead, and then we can look at it more carefully.
This is not an amendment that is against the United Nations. It is just an amendment asking for some kind of fiscal responsibility by these people before they spend the money.
The amendment that I am offering today proposed a very simple goal. It merely states that none of the funds made available in this act shall be used to renovate and modernize the U.N. headquarters in New York City.
As we all know, the United States already pays roughly 22% of all U.N. expenses. We do so despite the fact that the U.N. often goes against American values and American interests.
Now the U.N. is planning a $1.2 billion renovation of its New York City headquarters. They are also considering either the construction of a new building costing $650 million to house the organization in the meantime, or the rental of existing office space in Manhattan or elsewhere in the city. No doubt this rental of prime real estate will also cost hundreds of millions of dollars. So we are talking a renovation costing approximately $2 billion, at least.
I say ``at least'' because these are just the initial financial estimates, and there's a good chance the costs will increase substantially, as these projects often do.
Just look at the Big Dig in Boston, or even the Capitol visiting center, to see projects that were only expected to cost a billion or two, but have since far exceeded their initial cost expectations.
I'd like to note that even though Congress voted last year to offer a $1.2 billion loan to the U.N. for the purpose of renovation, several member countries complained that we charged interest on the loan, a modest 5.5%. As such, the U.N. General Assembly has not yet accepted the loan and its conditions, so it is possible that may find different financing. Either way, American taypayers will end up paying the lion's share of this renovation.
Mr. Chairman, there are serious questions about the costs of this renovation project. It is considered wasteful by Donald Trump, who, whatever his faults, knows a thing or two about real estate in New York City.
``The United Nations is a mess,'' said Trump recently, ``and they're spending hundreds of millions of dollars unnecessarily on this project.''
In fact, according to published reports, Mr. Trump recently met with Kofi Annan and offered to manage the renovation of the U.N. building for the much lower total of $500 million, yet he never received a response from the U.N.
Several other real estate experts have concluded that renovations in New York City should cost a fraction of what the U.N. is claiming is necessary to fix their buildings.
I submit these press accounts detailing the opposition of New York City real estate developers for the record.
If these real estate experts are right, then it appears that hundreds of millions of dollars may be unaccounted for, either through incompetence or corruption.
We are still trying to get to the bottom of the Oil-for-Food scandal, in which $20 billion in U.N. funds were also somehow ``lost.'' The U.N. does not have the best track record for competent and legitimate spending.
Mr. Chairman, there are obviously serious questions about the U.N.'s renovation project, which, along with their plans for temporary housing, will cost close to $2 billion.
The questions involved with this renovation project are not dealt with in Chairman Hyde's bill, in the Gingrich-Mitchell report.
This amendment is not an anti-U.N. amendment. What this amendment is attempting to do is make sure that American taxpayer dollars are spent wisely. We need to make sure that this renovation project is being run in a transparent and cost-effective fashion.
If we waste hundreds of millions of dollars on this renovation, that's money that won't be able to go toward peace and humanitarian efforts.
So what this amendment will do is tell the U.N. that we will have no part of financing this renovation until we see some sort of action taken to ensure that there is financial accountability.
I urge my colleagues to support this amendment and to support financial accountability.
[From the Weekly Standard, May 16, 2005]
Trouble At Turtle Bay
(By John Hinderaker)
The United Nations has been in the news of late. As usual,
most of the news is negative: evidence suggesting that one or
more members of the Security Council were bribed by Saddam;
an inability to deal effectively with various crises in
Africa; the embarrassing presence of nations such as Iran,
Syria, Libya, Zimbabwe, and Saddam's Iraq on U.N. commissions
on human rights, proliferation and weapons of mass
destruction; the oil for food scandal.
In the midst of these controversies, the United Nations is
proceeding with plans to upgrade its Manhattan headquarters.
The organization's headquarters at Turtle Bay were completed
in 1950 and renovated in the 1970s. The United Nations now
believes that another renovation project is necessary, and
has prepared a $1.2 billion plan to carry out the work.
While the construction is underway, the organization will
need to be housed elsewhere. In its original form, the U.N.
plan included construction of a new, 35-story building over
Robert Moses Playground, a park near Turtle Bay, at a cost of
an additional $650 million. This new building was slated to
be the U.N.'s home during the renovation project, and to
continue in use by the organization thereafter.
It was the construction of this new building--for which
approval by the New York legislature was required--that first
drew public criticism of the project. Bipartisan opposition
to the new building stalled legislative action in the New
York Senate. With no sign that senators opposing the project
would relent, Kofi Annan, on May 10, issued a statement
urging the United Nations to abandon its plan for the new
building, on the ground that it could not now be completed in
time for its projected use as a temporary home. Instead, the
United Nations will look for existing office space elsewhere
in Manhattan.
There has been little debate over the broader issue of the
renovation project itself, perhaps because so few people are
aware of it. Establishment figures such as Colin Powell, Ed
Koch, and Mortimer Zuckerman have been enlisted to head a
committee to lobby for the project. With the notable
exception of the New York Sun, however, the press has been
virtually silent. This seems odd, in view of the serious
questions that have been raised about the cost of the
renovation.
The U.N.'s Capital Master Plan states that a total of
2,651,000 square feet will be renovated. Assuming that figure
to be correct, the per square foot cost would be $452. But,
as reported by the Sun, real estate experts question whether
the U.N.'s facilities contain anywhere near that amount of
space. According to the U.N.'s web site, the organization's
headquarters include four main structures, whose size has
been estimated as follows:
Secretariat Building: 39 floors and three subfloors,
approximately 500,000 square feet.
General Assembly Building: Five total floors, approximately
380 ft. by 160 ft., or 304,000 square feet.
Conference Building: Four stories, approximately 115,000
square feet.
Dag Hummarskjold Library: Four stories and two sublevels,
219 ft. by 84 ft., total 110,376 square feet.
If these estimates are correct, only around 1,029,000
square feet will be renovated under the U.N.'s proposal. At a
total cost of $1.2 billion, the project would then weigh in
at over $1,100 per square foot.
Either of these figures is regarded by local real estate
developers as stunning. The New York Sun reported on February
4, 2005:
The United Nations has said its plans to renovate its
headquarters at Turtle Bay will cost $1.2 billion.
That strikes Donald Trump as far too much. ``The United
Nations is a mess,'' the developers said yesterday, ``and
they're spending hundreds of millions of dollars
unnecessarily on this project.''
And he's not the only one. Several Manhattan real-estate
experts told The New York Sun this week that renovating
premium office space should cost a fraction, on a per-square-
foot basis, of what U.N. officials expect to pay.
An executive managing director at the commercial real-
estate firm Julien J. Studley Inc., Woody Heller, said a
thorough renovation of an office building would probably cost
between $85 and $160 per square foot.
An executive vice president at Newmark, Scott Panzer, said
renovation prices could range between $120 and $200 per
square foot. Mr. Panzer, who works with many corporations to
redevelop their buildings for future efficiency and energy
cost savings, put a price of $70 to $100 per square foot on
infrastructure upgrades. Those would include heating;
ventilation; air conditioning; replacing the central plant;
fenestration (specifically, switching from single-pane to
thermal-pane windows); upgrading elevator switch gears,
mechanicals, and vertical transportation; improving air
quality, and making security upgrades. On top of that amount,
another $50 to $100 per square foot would take care of the
inside office improvements.
The chairman of global brokerage at commercial real-estate
firm CB Richard Elis, Stephen Siegel, said high-end
commercial renovation usually runs $50 to $100 per square
foot. For a renovation that does not include new furniture--
according to the 2002 Capital Master Plan, the United
Nations' will not--but does provide for improved heating,
ventilation, and air-conditioning equipment, as well as work
on the building exterior, the cost would be closer to the
$100 end of the range, Mr. Siegel said. Even accounting
generously for upgrades that might be peculiar to the United
Nations, Mr. Siegel added, he would set $250 per square foot
as the absolute maximum.
I would appear, then, that hundreds of millions of dollars
are unaccounted for, even on the most generous assumptions.
Trump has gone further, expressing the view that the
expenses projected by the U.N. can only be the result of
graft or incompetence. In a speech on the Senate floor on
April 6, 2005, Senator Jeff Sessions recounted his
conversation with Trump:
Let me share this story with you, which is pretty shocking
to me. The $1.2 billion loan the United Nations wants is to
renovate a building. Some member of the United Nations, a
delegate, apparently, from Europe, had read in the newspaper
in New York that Mr. Donald Trump . . . had just completed
The Trump World Tower--not a 30-story building like the
United Nations, but a 90-story building, for a mere $350
million, less than one-third of that cost. So the European
United Nations delegate was curious about the $1.2 billion
they were spending on the United Nations. He knew he didn't
know what the real estate costs are in New York. So, he
called Mr. Trump and they discussed it. Mr. Trump told him
that building he built for $350 million was the top of the
line. It has the highest quality of anything you would need
in it. They discussed the matter, and an arrangement was made
for Mr. Trump to meet Kofi Annan, Secretary-General, to
discuss the concerns. . . . So according to Mr. Trump, who I
talked to personally this morning, they go meet with Mr.
Annan, who had asked some staff member to be there. . . .
When the European asked how these numbers could happen, Mr.
Trump said the only way would be because of incompetence, or
fraud. That is how strongly he felt about this price tag
because he pointed out to me that renovation costs much less
than building an entirely new building. So he has a meeting
with Mr. Annan, and they have some discussion. And Mr. Trump
says these figures can't be acceptable. He told me in my
conversation this morning, he said: You can quote me. You can
say what I am saying. He said they don't know. The person who
had been working on this project for 4 years couldn't answer
basic questions about what was involved in renovating a major
building. He was not capable nor competent to do the job. He
went and worked on it, and talked about it, and eventually
made an offer. He said he would manage the refurbishment, the
renovation, of the United Nations Building, and he would not
charge personally for his fee in managing it. He would bring
it in at $500 [million], less than half of what they were
expecting to spend, and it would be better. . . . Yet he
never received a response from the United Nations.
It appears there are serious questions about the U.N.'s
renovation project. Depending on which assumptions one
accepts about cost and square footage, anywhere from $500
million to $1 billion in expense is unaccounted for. Given
the U.N.'s history, is there any reason to doubt that the
costs projected by that organization include substantial sums
representing, as Trump put it, incompetence or fraud? Given
what we know about the oil-for-food program, is there any
reason to trust the U.N.'s business or accounting practices?
American taxpayers have a legitimate interest in knowing
the answers to these question. The renovation is to be
financed by a low-interest, 30-year, $1.2 billion loan from
the U.S. government. (Kofi Annan's original request for an
interest-free loan was turned down.) And, of course, the loan
will then be repaid largely by American taxpayers, who foot a
little over 20 percent of the U.N.'s bills.
A few congressmen and senators have finally begun to ask
whether the U.N. building project is a boondoggle. It's about
time.
Mr. Chairman, I reserve the balance of my time.
If the gentleman will yield, I will. I am reluctant to do it, but I would.
Let me just complete my presentation, then. I will be glad to withdraw it as long as I get the confirmation that there will be a GAO study before these moneys are issued.
Mr. Chairman, I yield myself the balance of my time.
These are serious questions when you spend $1.2 billion. Obviously we are going to pay one-fourth of this. At the very least, with all this kind of waste we have seen and fraud in some of these estimates around here, it is not unreasonable for taxpayers to have some kind of control over this. We are just trying to make sure that American taxpayers' dollars are used wisely, and that the renovation project is being run in a transparent and cost-effective manner, and, in fact, when these employees go to other places to live while they do the renovation, that they do not waste hundreds of millions of dollars in doing so.
I think the United Nations has had several offers from developers in town, in New York City, to say we will do this for one-third of the cost. I think the United Nations has to tell us, if you are going ahead with this project, we have got to have assurance that there is going to be a fixed-cost basis on this contract and not procurement on a cost- plus fee basis or cost-plus-plus basis. These are the kind of contracts that just roll out of pocket. We need to tell the United Nations that they have to be accountable and provide good financial accountability, not just for United States dollars, but also for all the dollars.
Mr. Chairman, I ask unanimous consent to withdraw my amendment.