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A quarterly magazine of urban affairs, published by the Manhattan Institute, edited by Brian C. Anderson.

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How to Account for the United Nations?
It doesn’t pay to keep the UN in New York.
14 August 2008

In February 2007, Mayor Michael Bloomberg—worried by a statement issued by the Secretary General’s office speculating that if the United Nations couldn’t expand its historic New York headquarters, it might look for a permanent home elsewhere—met with Secretary of State Condoleezza Rice to argue for keeping the UN in Gotham. Losing the UN would be a “disaster,” Bloomberg said, and Stu Loeser, his press secretary at the time, argued that the UN’s jobs and spending were vital to the city’s economic health. Two years earlier, Michael Sherman, spokesman for the city’s Economic Development Corporation, had similarly contended that the UN brought significant jobs and investment to New York City. “The UN is a valuable asset to New York City, supporting thousands of jobs and contributing more than $2.5 billion to the local economy each year,” he noted. “The UN is visited by 800,000 people annually and makes a major contribution to New York’s reputation as an international city.”

Is the UN really such a valuable asset? To that annual $2.5 billion in employment opportunities, goods, and services generated to accommodate UN personnel, we can add the roughly $16.8 million spent each year by members of UN delegations visiting for General Assembly meetings, according to my calculations, as well as the $14.4 million that UN employees spend to send their children to the United Nations International School, according to school officials. Add it up, and you get $2.53 billion in ongoing benefits for New York City. The benefits side of the ledger should also include one-time spending, specifically the current remodeling and construction now under way at the UN headquarters. Skanska Construction Company, which will play a role in the work, estimates this infusion of capital at $1 billion, though experts at other companies, such as Kadish Associates, Rose Associates, and Vornado, claim that the number is exaggerated.

But that represents only one side of the ledger. On the cost side are unpaid taxes owed by foreign governments, which, the New York Times and the Washington Post have estimated, are more than $236 million per year. The City’s Traffic Congestion Mitigation Commission estimates that additional traffic congestion during UN Week and other UN events costs the city an annual $825 million. There are also the minor, but irritating, expenses of $18 million in unpaid parking tickets, $7 million in overtime for the police department, and $5 million in overtime for the fire department.

There are also opportunity costs, both ongoing and one-time, associated with keeping the United Nations in Manhattan. Donald Trump has said that his UN-adjacent property has about the same square footage as the United Nations’ space, about 900,000 square feet; based on the average price of a residential square foot on Manhattan’s east side near the UN ($1,083), the total opportunity cost, assuming this space was converted into apartments, would be $975 million per year. A theoretical community there would house 20,000 apartments for individual families earning at least $70,000 and generate an annual $1.4 billion of aggregate wealth and taxes for the city that are not now realized. Don’t forget the one-time cost of building the new complex: at least 8,000 people would be needed, with an average salary, according to the Economic Development Corporation, of $26,727. The total on the expense side of the ledger comes to $3.5 billion in annual costs and $214 million in one-time costs.

So it cannot be asserted, as Bloomberg often does, that the United Nations is an economic benefit for New York. Some would say the argument for the UN’s presence should go beyond economics. But an organization that has given Iranian leader Mahmoud Ahmadinejad a standing ovation, that cannot define terrorism, that permitted Yasser Arafat to wear a revolver at his side while making an address, that cannot account for $162 billion in the oil-for-food scandal, and that virtually ignores atrocities from Rwanda to Darfur might nevertheless prefer ambiguous economic statistics to other arguments.

Herbert London is the president of the Hudson Institute and a professor emeritus at New York University. He is the author of Decade of Denial and America’s Secular Challenge (Encounter Books, 2008).

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