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UNICEF to stay in Manhattan.

After an exhaustive search that pitted New Rochelle against New York City in a bidding war of benefits, UNICEF's executive committee voted earlier this month to stay in Manhattan. The United Nations International Children's Emergency Fund! will remain at its present location at UNICEF House on the grounds of the United Nations' complex, which it will own free and clear in the future. It will also occupy and purchase with city help a portion of 633 Third Avenue that will be condominiumized to allow for tax exemptions.

Timothy E. Boakes, director of the office of administrative management for UNICEF who acted as point person on all the negotiations over the last two years, said he was "exhausted" but on his way to Bangladesh. Boakes had looked over proposals from more than 30 owners in the metropolitan area as well as Bonn, Germany before settling on the last two finalists with the executive committee.

UNICEF executive director, James P. Grant recommended in February that the group stay in Manhattan, while its Advisory Committee on Administration and Budgetary Questions favored the Westchester location. Elected officials had even proposed a compromise in which some of the 900 staffers would remain in Manhattan and the rest would relocate to New Rochelle. UNICEF now plans on adding 600 people in the next 20 years.

New Rochelle Mayor Timothy C. Idoni sighed, "We wish we'd finished first." The Mayor viewed the situation positively and credited the quest for the organization's home and the attendant publicity with revitalizing New Rochelle's economic development efforts.

Under its lease-purchase agreements with New York City, UNICEF would save about $170 million over the next 30 years, Boakes estimated. "I can be happy, but if I do nothing else at UNICEF I've at least repaid them for my time here."

To pay for the condominium space at 633 Third Avenue, the city would issue tax exempt municipal bonds. UNICEF would occupy up to 100,000 square-feet initially and have another 160,000 available over the next 30 years. "If we overestimated, the city would take up to 160,000 off our hands," said Boakes. "We can't lose."

The floors involved would be the 14th to 27th and UNICEF would pay between $14 and $15 per square-foot per year for the space, he said. Over the long term, city officials estimated the price will work out to about $100 square-foot, amounting to some $26 million.

The building is currently controlled by Travelers Insurance Company, its mortgagee, which is said to be foreclosing on owners Stanley Stahl and Joseph Comras. They are still in negotiations and could become an obstacle to the deal, sources say, albeit unlikely without another major tenant in tow. The million square-foot building carries a mortgage of $145 million and has been only two-thirds occupied since Blue Cross/Blue Shield moved out.

A spokesperson for Travelers said they are pleased UNICEF has chosen this site. "The building is the ideal home for a UN agency such as UNICEF," he added.

Last spring, the governor signed a bill permitting tax exemptions for those portions of three specifically named city properties, including 633 Third, that UNICEF had under consideration at the time and would use for its exempt activities. The original development deal for the United Nations complex involved the issuance of tax free municipal bonds by a city and state combined agency. Several buildings were constructed that are all leased by UN agency headquarters.

As part of the plan, UNICEF will also purchase its current headquarters at a rate of $32.50 per square-foot per year over 32 years. "That's an equity payment because in 2026 we own it," noted Boakes. The organization currently occupies 180,000 square-feet at that location and has an option for the top two floors as well as the garage and land. With the top floors, its occupancy would increase to 203,000 square-feet.

In announcing the UNICEF expansion, Mayor David Dinkins said it is important to keep UNICEF here, so that people don't perceive New York as a place to leave.
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Title Annotation:remains at 633 Third Avenue, New York, New York
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Oct 20, 1993
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