Brokers worried over U.N. furor.

With revelations surrounding the oil-for-food scandal surfacing daily, the United Nations isn't exactly the darling of Manhattan right now.

But the state Senate's recent postponement of a bill that would allow the UN to submit plans for a new office tower to the city's approval process has some brokers worried that the UN--whose space needs have been a perennial boon to Eastside and Midtown office space--may eventually tire of the backlash and find a new home city. According to Cushman & Wakefield executive director Glenn Markman, who recently relocated UN members at the Belgian Mission and the European Commission, the UN creates the kind of real estate demand and general economic stimulation that many cities abroad would go to great lengths to gain.

"I wouldn't for a second think that countries wouldn't be offering huge incentives to have the UN move in," Markman said. "They could offer free space, major assistance in funding new development, infrastructure improvements. Basically, they'll offer everything they can just to have that job concentration and all the major benefits that come with having the UN."

Roy Goodman, head of the United Nations Development Corporation, which is charged with managing and executing UN construction projects, indicated that Germany has already been courting the UN to move to its former capital, Bonn. The rumor mill also has the Swiss making a push to entice the international peacekeeping organization. But both Goodman and Markman remain optimistic about both the bill's chances of passing in 2005 and the eventual realization of a new UN office tower.

"I think that in the coming months, the senate as a majority will understand the need for this development," Goodman said. "When you consider how beneficial the UN is to the city's economy and real estate market, I think that the bill will pass."

The bill, which was co-authored by Eastside Assemblyman Steve Sanders as well as the Mayor's office, would allow the UN to submit its plans for development to the public review process. That process would determine approval for any development plan.

According to the plan, the UN would develop an office tower--as big as 35-stories and 950K s/f--adjacent to the Secretariat Building on Frist Avenue and partially on land in neighboring Robert Moses Park. UN personnel would occupy this swing space upon its completion and significant renovation on the 50 year-old Secretariat Building would commence. When the Secretariat Building's refurbishment is complete, it would be reoccupied and the new neighboring tower would be used to consolidate the UN's plethora of offices scattered throughout Midtown and the Eastside.

Because of the consolidation effort, Goodman insisted the plan wasn't an expansionist move by UN. No timeline has officially been set for the development.

Markman said that the real estate sub-market surrounding the UN is in such high demand that the introduction of additional space would be beneficial to all and wouldn't strip landlords of UN-member tenants. "The amount of consulates and missions in the city is so immense, and there's relatively little space available that suites them, so the addition of an office tower specifically for them is a great idea and a necessary development," Markman said. "This development will be an important part of the New York economic engine. When you have an investment like this made in the area, it makes the entire city stronger."