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Bush Proposes Loan to UN for Headquarters Renovation - 2004-02-03

President Bush has asked Congress to loan the United Nations more than $1 billion to pay for the top-to-bottom renovation of the U.N. headquarters building in New York. The proposal, in the administration's new budget for 2005, is aimed at ending a long debate over how to deal with soaring repair bills at the landmark office building.

Formal announcement of the U.S. loan offer followed a meeting here between Secretary of State Colin Powell and U.N. Secretary-General Kofi Annan.

The U.N. chief has long been pursuing funding to renovate the U.N. headquarters, which is now more than 50 years old and seriously deficient, according to Mr. Annan, in terms of fire safety, energy use and security.

State Department spokesman Richard Boucher told reporters the administration's budget for fiscal year 2005 will include a loan that will allow the United Nations to essentially gut and rebuild the 38-story tower on New York's East River.

"We're offering to provide a loan to the United Nations for the full $1.2 billion estimated cost of the plan. This loan would bear interest at the current U.S. Treasury rate at about 5.5 percent repayable over 30 years," he said.

Mr. Boucher said the loan would be repaid by the United Nations through its regular assessments to member countries. As the single biggest contributor to the U.N. budget, the United States will in effect pay 22 percent of the overall bill.

The distinctive green-glass U.N. building was constructed between 1949 and 1953 on a plot of land donated by the late American oil billionaire John D. Rockefeller Jr.

Plans call for the United Nations offices to be temporarily relocated to a new building just south of the U.N. complex while the renovation takes place.

Secretary-General Annan had pressed for the radical renovation project, arguing that repairing and upgrading the building on an ad hoc basis would cost more than $2 billion over a 25-year span.