Patterson admits $188M rental for UN offices high

Aug 15, 2022 News

…but says payment include utilities, security, other amenities

The payment of utilities and other amenities are included in $188M per year rental of the buildings that now house the United Nations Offices in Kingston Georgetown, Former Minister of Public Infrastructure (MoPI), David Patterson has said.

Patterson is shedding light on the issue some weeks after current Public Works Minister Juan Edghill publicly condemned the move by the A Partnership for National Unity + Alliance For Change (APNU+AFC) government to bind Guyana to a 10 year lease contract at $188 million annually to rent the Duke Street Kingston property owned by Guyanese singer Eddie Grant.

The annual rent amounts to $1.9 billion which is estimated to cover two pay increases for public servants. Edghill had condemned the former administration saying that State funds could have been used more wisely.

However, in a letter to the editor on Saturday, Patterson who served under the APNU+AFC government explained though the cost for the rental of building is indeed on the high end, the Government was able to cut cost on security, water rates and other amenities since it was included in the rent.

Additionally, the former Minister turned opposition Member of Parliament explained that leasing the building to house the UN offices, allowed the government to reclaim properties which once accommodated the UN offices. He explained that after the UN offices were moved from those locations, the government was able to cut back on cost for rent, security and other bills which amounted to over $100 million annually.

Patterson said that back in 2018, there existed six different UN agencies in Guyana, these are the Food and Agriculture Organisation (FOA); United Nations International Children’s Emergency Fund (UNICEF); United Nations International Children’s Emergency Fund (UNDP); Pan American Health Organization (PAHO); The Joint United Nations Programme on HIV/AIDS (UNAIDS) and the International Organization for Migration (IOM)

He said that with a seventh agency scheduled to become operational in 2019, the Government of Guyana (GoG) had to start looking for alternative space to collectively house the UN offices.

According to Patterson at that time, the GoG owned two of the buildings which the UN occupied and paid rental for two others. As such, the GoG was liable for repairs and maintenance, security, utilities, janitorial costs, and insurance for some of the other locations. These payments were made via the Ministry of Foreign Affairs.

The APNU+AFC MP noted that as the UN presence here began to grow, the UN (headed by the former UN Resident Coordinator) with the assistance of the Ministry of Foreign Affairs (headed by the current Chief of Protocol) began a search for a suitable location to house all seven of the UN agencies.

“Several possible locations were examined, including the CARICOM Annex on the Railway Embankment, which was unavailable at the time; he said adding that “it is important to note that all the proposed buildings were selected by the local UN staff in association with the UN international security unit.”

Patterson said too that the MoPI was initially not involved in any activity towards renting the building for the UN offices.

He explained that it was after the challenges surrounding the rental of Sussex Street bond, the Cabinet had mandated that since MoPI had the relevant technical staff, property rentals, if necessary, should seek technical input from MoPI.

Former Minister of Public Infrastructure (MoPI), David Patterson

Finally, after discussions at the cabinet level, it was agreed that MoPI would be the lessee, rather than Foreign Affairs, as was the previous traditional route, on the simple reasoning that since there was an existing building maintenance department in MoPI, that ministry would be better able to respond to any technical issues that might arise during the leasing period.

After the building was identified, Patterson said that property inspection was conducted by the building and electrical inspectorate departments, who made recommendations to the landlord for corrective works prior to the commencement of the lease.

He said that important to note, is that at the time the property was identified by the UN, it was already leased to an oil and gas company (REPSOL). “The landlord, at his own expense, was required to renovate his property in line with the proposed recommendations and relocate the existing tenant company to an alternative location. Note that the landlord was extremely reluctant to make this change in tenancy, but the persuasion of the UN was considered, and he agreed…,” claimed Patterson.

The former Minister explained therefore that the lease agreement was proposed by GoG and Blue Wave Apartments Inc. for a three-storey concrete building (21,525 SF), a Great House (7,425 SF) and other offices (1,664 SF) – a total of 30, 614 SF over ten years at a rate of US$68,882.00 per month, with a 1% per annum increase in rental rates from years 8 – 10.

“Included in this fee was water rates, rates and taxes, security (6am – 6pm) on working days, maintenance of landscaping, car parking, grounds, and other associated external structures,” he said.

According to him, on agreement of this proposal, the GoG was able to reclaim three buildings, which were allocated to other ministries (including former UNDP offices now house the Department of Energy), and be relieved of the responsibility for payments for security, electricity, maintenance, etc. for the other locations, which amounted to almost US$700,000 per annum. “At the time, it was estimated that an additional US$500,000 per annum would be saved, due to the reallocation of the reclaimed buildings,” he said.