Audit: U.N. Development Corporation Owes $6 Million Rent to City
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The United Nations and its host city, noted for periodic quarrels over diplomatic deadbeats and parking scofflaws, are involved in another domestic spat — this time over $6 million in rent the city wants for unbuilt office and residential space near the U.N.’s midtown headquarters.
In an audit report today, the City Comptroller, William C. Thompson Jr., said the United Nations Development Corp. failed to pay a total of $12 million in rent from 2003 to 2006 required under a complex lease agreement to develop additional office space for the world body.
As a result of the audit, Mr. Thompson said in a statement, UNDC paid $6 million in back rent in April but still owes the balance.
Mr. Thompson criticized both the UNDC and the city’s Economic Development Corporation for not ensuring that the city receive the entire unpaid amount.
“In this tight fiscal environment we cannot afford to let any revenue slip through our fingers,” he said.
The dispute concerns a UNDC project to build a 35-story tower on land occupied by a city park.
The building was to be used for U.N. operations while its landmark headquarters underwent renovation, and later by U.N. staff now scattered about the city.
But neighborhood residents objected to losing the only green space in the area, and plans for the project were suspended in 2005.
UNDC officials contend, in a response included in the report, that lease agreements allowed it to set aside reserves for various corporate purposes that are exempted from taxation.
The president and CEO of the agency, Jeff Feldman, did not immediately return a call.
U.N. diplomats have frequently squabbled with local authorities over diplomatic immunity regarding taxes, unpaid parking tickets, and other issues.
While treaties define consulates and embassies as sovereign territories, thus generally tax-exempt, the U.S. Supreme Court ruled last year that New York City could collect taxes on properties used by foreign countries for non-diplomatic purposes.
A federal judge later ordered the Indian, Mongolian, and Philippines governments to pay $57.6 million in property taxes to the city.
