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Wednesday, June 23, 2010

City plots huge land deal with U.N.

Photo by Buck Ennis.


June 13, 2010 5:59 AM


Plan: Sell East Side city properties to diplos to fund mile-long park.

By Theresa Agovino


City and state officials are crafting a byzantine plan to raise money to close a 21-block gap in the East Side waterfront promenade. The hard part is that it involves selling two city-owned office buildings, razing a playground and constructing a new tower for the United Nations.
The extraordinarily complicated proposal is still in its early stages, and it could easily fall apart as it moves forward, given all of the moving parts. Yet officials say it has a chance because it would offer a way to fulfill major, long-held goals for both the city and the U.N.: The international body would finally get the additional building it has wanted for years, and the city could add park space and waterfront amenities despite the budgetary crisis.

“This is a once-in-a-generation opportunity,” says Sarra Hale-Stern, district office director for state Sen. Liz Krueger, who is working on the proposal that's being spearheaded by the city's Economic Development Corp.

Filling the promenade's gap, which extends from East 38th to East 59th streets, would cost $150 million to $200 million. The city would finance the construction by selling two buildings on East 44th Street that it leases to the U.N. Those sales could yield anywhere from $150 million to $300 million. In addition, sources say, the city is seeking at least $75 million from the U.N. for permission to build on Robert Moses Playground, a 29,000-square-foot blacktop across East 42nd Street from the U.N., on First Avenue.

Trading parkland
But the deal faces numerous obstacles. The playground transaction would require state legislation because it involves eliminating parkland. The idea would be to compensate the community for the loss by expanding the promenade and adding space to existing area parks.

“In the legislation, we are going to have to be very specific about what will be constructed if we take the major step of [removing] parkland,” says Brian Kavanagh, a state assemblyman working on the deal.

Yet getting the OK from Albany may be the easy part. The U.N. would have to approve the deal at a time when it is already spending $1.9 billion on a gut renovation of its headquarters complex.

The idea of the U.N. building on Robert Moses Playground has been kicking around for years, but two factors have resurrected the concept recently.

First, about six months ago, the U.N. hired a consultant to study its real estate needs, sources say. The consultant found that the international body needed to extend beyond its renovated headquarters and space it leases elsewhere. In fact, the U.N. is exploring moving some local employees out of the area. Such a move by a major employer would be a big blow to the city.

The U.N. is also weighing the possibility of constructing a building on its campus, on what is now green space to the north of the General Assembly Building. That's also far from ideal for the city because the U.N. sits on sovereign territory that is exempt from zoning laws, meaning local officials would have no say over what is constructed. Also, the city would be deprived of money if the U.N. built on its own land.

Long-cherished dream
Sources say the U.N. has long wanted to build on the playground site because its proximity to its headquarters means a tunnel could be created to connect the two buildings. Also, any building the U.N. constructed on the playground site couldn't be any taller than its current headquarters, sources say.

“The U.N. really wants to be in that spot, and the community really wants more parkland,” says Dan Garodnick, the local City Council member. “Hopefully, we can get a deal.”

In a statement, an EDC spokesman said the city would continue to work toward creating more open space and allowing a major employer to consolidate and expand.

Another reason behind the revived push is the possibility of using 22 caissons left behind when a temporary roadway was built while the FDR Drive was under construction. Keeping them would shave $25 million off the cost of constructing the promenade.

New York State's Department of Environmental Conservation wanted the caissons removed by the end of last year, but it has allowed them to stay as the promenade deal is being shaped. However, it is unclear when the department's patience will run out.

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