Trump Says He Could Save U.N. Nearly $1 Billion
Aug. 22, 2001 -- New York billionaire entrepreneur Donald Trump says he can potentially save the United Nations $1 billion. Could it be a case of unexpected humanitarianism, hyper-aggressive business, bravado, or perhaps all of the above?
In an interview with ABCNEWS.com, the real estate and casino mogul says the perpetually cash-strapped organization has massively overvalued the preliminary projected cost for renovating and expanding its 50-year-old historic headquarters on the East River in Manhattan.
A U.N. study released last year estimated it could cost from $964 million to $1.054 billion to renovate the complex over a 6-year or 12-year period, plus up to $500 million more in interest payments on loans. The cost, theoretically, would be borne by member countries including the United States.
Trump says he could do the job cheaper, faster and better than what is planned.
"I could do it for $500 million, what they're going to spend $1.6 billion for. The only difference is my job would be better," says Trump.
Quicker, Better, Faster
Trump even said so much in a pitch to U.N. Secretary General Kofi Annan earlier this year. He boasted he could save money through his connections to the labor unions and suppliers, and could complete the job in one-third the time, at one-third the cost, and with less disruption to the staff.
"I have a lot of respect for the secretary general and know he's going to do the right thing," says Trump.
The one-time presidential candidate questioned whether the U.N. bureaucracy was really aiming for the best deal.
"I hope they're able to get away from the bureaucrats that are trying to get rich getting this job built," he said.
To back his claims, Trump cited some previous accomplishments, including his recent ahead-of-schedule construction of a 90-story glass residential building, the world's largest, just a stone's throw from the U.N. headquarters.
"I did the 90-story building opposite the United Nations for $360 million, and it's brand new. So how does it cost $1.6 billion to fix the building?" he asked.
He also cited an asbestos removal operation on an old building at 40 Wall Street, which he purchased for a reported $1.2 million. Now, almost fully occupied, it's said to be worth some $300 million.
And what long-time New Yorker can forget the case of Central Park's Wollman Rink? After the city spent $21 million trying to decide how to build it, Trump moved in and rebuilt it under budget and ahead of schedule for the city at no cost.
Still Early in the Process
The U.N. is hiring several firms to develop a more specific design and cost estimates. After those are prepared, member states are expected to vote on a plan and then bidding for the construction according to that plan would occur.
But United Nations spokesman Fred Eckhardt says leadership is comfortable with those preliminary numbers. "I don't think we doubt the validity of the original numbers. [Under Secretary General for Management Joseph] Connor is someone who does things in a thorough and responsible way," he said.
"We've had the master plan reviewed by a number of people, including the General Accounting Office, who gave us a good gold star on our forehead for a first-class effort in the planning and arrangements for this," said Connor. "So we're comfortable in the methodology that we're following."
Connor, a distinguished accountant, has been responsible for all financial, personnel matters, and other senior management issues within the Secretariat since 1994 and has been overseeing development of the renovation plan.
He says potential contractors like Trump may have their own particular ways of doing the job, but they may not meet the high standards of the United Nations.
"The cost of the building is certainly important but it's not the only thing," he said. "We want to make sure that it's first-class materials but also that that we can maintain it in a first-class way. In other words, we specify the materials and the quality of construction, not the contractors."
"Mr. Trump presented his ideas for doing the job better quicker and cheaper," Eckhardt said. "However, we're just putting bids out now for the planning stage, and what Trump would be interested in is the construction stage … So, we would be happy to see him back when we start putting out bids for construction."
That could happen as soon as next year.
What’s the Motivation?
So what's driving this aggressively pitched deal from the author of Trump: The Art of the Deal?
Some at the U.N. suggest Trump's estimate may not fully account for all that needs to be done to the headquarters. He met with Annan before he had received a copy of the U.N.'s preliminary plan.
Others suspected Trump may have been working up some sort of philanthropy: offering to revamp the chronically underfunded peace agency's historic headquarters at something near cost.
Or it could be self-interest. After all, Trump had unsettled some neighborhood Feng Shui by building his 90-story building near the headquarters. A member of Annan's staff had aligned himself with city opposition to that project. Trump won out in November, when the New York State Court of Appeals denied the group's appeal to stop the construction of the tower, which now dwarfs the nearby U.N. building.
"Now he may be trying to get into the good graces of the UN, because many of his tenants will have to be from the U.N.," says Thalif Deen, a reporter who for eight years has covered defense issues at the U.N. "Some of the member states, I think, have probably already rented out some of the offices in his building."
Trump claims his motivation is basically philanthropy:
"It's very close, if not 100 percent. I'm offering to help because I know what's going to happen. The contractors are going to have a field day with Mr. Connor. That's like the Pittsburgh Steelers playing my high school football team."
"I have no idea what he was thinking about," says Connor. "All I can say is that he's going to have a chance to come to bat and we'll see if he knocks one out of the ballpark."