The United Nations has been able to shave over half of the more than $200 million in cost overruns it has been projecting for the $1.9 billion renovation of its East Side campus.

Werner Schmidt, a UN public affairs officer and spokesman for the huge capital project, said that the savings were the result of value engineering efforts, but also stemmed from cheaper materials and falling construction labor costs that have come as a result of the economic downturn.

Lower resource utilization amid the global recession and a slower pace of construction jobs has made commodities like concrete, steel and gasoline less expensive and contractors and construction management companies more willing to reduce their prices in order to win increasingly scant business.

The UN’s headquarters was built starting in the late 1940s and many of its facilities, including its most visible landmark, the Secretariat Building, have not been significantly renovated since then and have become obsolete or in need of updated security measures according to Schmidt and other UN spokespeople. 

The capital project will overhaul many of the buildings on the campus, improving security and modernizing office, conference and assembly spaces and other facilities.  Years prior to the overhaul, the UN debated the best strategy to conduct the work and in late 2007, opted to clear out most of the buildings, including the Secretariat, and lease temporary office space to house thousands of employees while the construction was being done.

An earlier plan called for less temporary space in an effort to avoid the steep costs of Manhattan offices.  That approach required staff to remain in the complex and in the Secretariat as the renovations were being done and to be shuffled around in incremental moves to make way for the work.  The technique proved to be complicated logistically and more expensive than original estimates and was abandoned in favor of totally vacating the premises.

But while the UN reconsidered what methods it would choose, construction prices continued to rise in an overheated market, pushing the project above its roughly $1.9 billion budget by a projected $219 million.

In the years since, prices have begun to cool and Schmidt said that the project was now only thought to be $90 million over.  He said that the UN and its construction manager Skansa were hopeful that they will see the rest of the overruns whittled away as bids come in for upcoming portions of the work.

Schmidt said the project would meet a milestone in November when a temporary conference facility will be completed on the complex’s North Lawn, a 180,000 square foot space.  The General Assembly building, another visually distinct building in the compound with its concavely arching roofline and that is the UN’s best known meeting hall, will be redone starting in 2012 and will use the temporary facility for meetings while the work is being conducted.

One area of renovation that Schmidt mentioned has received little attention compared to the more visible structures undergoing work is the extensive campus facilities belowground. 

“One third of our square footage is underground on three levels,” Schmidt said, explaining that the cavernous facilities encompass areas underneath the Secretariat Building and North Lawn and other facilities. “It’s almost like a city within a city.”

Schmidt said that the work to redo those subterranean floors was among the most complex because the space houses functions and equipment that will likely have to keep operating as the renovation takes places, equipment such as heating and ventilation and backup power generation.