Renovation costs of UN headquarters buildings

As a former New Yorker, and someone who was involved in a massive office renovation in Manhattan, I have been fascinated with this developing story. There have been several posts around the blogosphere, but this story in the Weekly Standard by Powerline's John Hinderaker is a good place to start, here:

"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....

If ... 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 developer 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 Ellis, 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.

It 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.'"