The United Nations, after rejecting a less expensive and less disruptive option for expanding its office space, has won a “sweetheart deal” from the city and the state, an individual close to the project said.

A former member of the United Nations Development Corporation’s board, Leo Kayser, said the project to “consolidate” U.N. office space by erecting a 35-story office tower on a city playground in Turtle Bay represents a waste of taxpayer money.

In a study by the General Accounting Office that was released in May 2003, two proposals for the Secretariat renovations were put forth.

One proposal called for the United Nations to use its own property instead of building on the nearby Robert Moses playground. That proposal, which a vice president of the Turtle Bay Association, Bruce Silberblatt, said would “have greater support” from community activists, planned for the United Nations to convert its two-story South Annex adjacent to the Secretariat into a swing space of four to six stories for use during the modernization process.

“The renovation work would occur in stages with five to ten floors of the U.N. headquarters renovated while staff rotate through the swing space,” the GAO study said.

The other proposal was the current, operative one, which calls for the 35-story swing space to be built over part of the playground, and for construction of an East River esplanade park to make up for the loss of the recreational space.

The current approach is projected to cost the United Nations $1.8 billion. The tab for the South Annex was put at $1.3 billion.

In addition to being the less expensive option, the South Annex plan “would cause the least disruption because meeting chambers would be renovated when the rooms were not in use,” the GAO study says.

According to the city’s Economic Development Corporation, that option was rejected by U.N. and city planners because of the risks of cost overruns and delays, and possible exposure to asbestos.

Another option for expanding on the current U.N. property is to erect the swing space at a park at the north end of the world body’s campus.

Assemblyman Jonathan Bing, a Democrat who represents Turtle Bay, said the U.N. park is of little value to the community because, though it is pretty, it is “very limited in terms of access.” It is within the gates of the U.N. compound and is not open to the public.

The city’s development corporation said putting up a building on the North Lawn is “an option certainly open to the U.N.,” but one that is not ideal from the Bloomberg administration’s point of view.

“The U.N. doesn’t have to follow zoning or city stipulations. It can do whatever it wants,” an official of the office, who asked not to be identified, told The New York Sun.

Mr. Bing, too, said he opposes use of the North Lawn for the project, because the United Nations could erect an office building that would be an eyesore, with no form of compensation for the community.

That would mean, however, that city resources – and city entities, such as the U.N. Development Corporation – could be removed from the project, city officials and community representatives said.

Mr. Kayser, who was a Pataki appointee to the U.N. development corporation’s board, said excluding the corporation would be a positive development, as the project is depriving the city of valuable income.

The nonprofit corporation, Mr. Kayser said, receives a rent stream from office space at U.N. Plaza that it leases to U.N. agencies. The income, he said, is supposed to be paid over to the city treasury – but is being used instead to cover expenses of the corporation related to the project to “consolidate” U.N. office space by erecting the 35-story tower. Thus, he said, the corporation “is subsidizing the U.N. at the city’s expense.”

Mr. Kayser reasoned further that whatever financial shortfall the city suffers because of the funds it does not receive from the corporation must be made up somehow, “which may or may not be in taxes.”

City officials have said that the United Nations will ultimately bear the entire cost of the expansion project, and that funds the city is currently laying out toward the project will be reimbursed by the world body.

According to Mr. Kayser, however, that doesn’t mean New Yorkers, and all Americans, won’t feel the financial effects of the U.N. expansion.

Mr. Kayser said paying off the $1.2 billion loan from the federal government that will go toward renovations – and the $650 million in bonds from the U.N. development corporation that will build the new esplanade and the 35-story swing space – “will be an additional expense to the U.N. in the future, that will increase their operating costs.”

“And the greater the operating expense of the U.N.,” he said, “the more the U.S. taxpayers pay.” Mr. Kayser was referring to America’s financing of 22% of the U.N.’s operating budget annually.

The development corporation’s projects, Mr. Kayser said, are “sweetheart deals – one bureaucracy helping another.”

To some local residents, however, there’s nothing sweet about current plans for the U.N. expansion. They have been saying for years that the world body has plenty of its own land to build on, citing the alternatives to encroaching on Robert Moses playground.

Community Board 6’s Committee on Parks, Landmarks, and Cultural Affairs has been negotiating with the city and the development corporation over mitigation for the lost playground, and its chairman, Gary Papush, said he was “getting pressure from the community not to support anything that would do away with Robert Moses.”

For his part, Mr. Silberblatt, of the Turtle Bay Association, expressed concern that the current legislation is “wide open for UNDC mischief.”

“A sharp lawyer would be able to drive a whole train through those loopholes in the current legislation,” he said.

Sponsors of that legislation, which stalled unexpectedly this fall when leaders of the state Senate declined to bring it to the floor, had reservations as well.

Steven Sanders, a Democrat who represents the U.N. area, said the bill, which he introduced, would not approve the U.N. construction but would allow the community board to review any proposed plans for the project.

Mr. Sanders said of his constituents: “These are people who have to live with demonstrations, streets closed, live with cars with diplomatic license plates taking up parking – there’s no great affinity in my community for the U.N.”

Mr. Sanders secured $75,000 in city money for Community Board 6, so that those constituents can hire experts to review, and possibly rebut, the city’s Environmental Impact Study related to the construction.

Mr. Bing echoed many of the concerns of his fellow legislator.

“In its current format, I do not support the U.N.’s plans for development. They have not provided adequate mitigation,” the assemblyman said.

Community Board 6, he added, ranks second to last of all community boards for park space within its territory.

City officials and board members of the development corporation have praised the proposed recreational space, saying that, by comparison, Robert Moses is “not a very nice park.” The U.N.-expansion project, they have said, is a means of getting the community more, and higher quality, recreational space.

But that could happen without any involvement by the development corporation or the world body.

Just south of the U.N. complex, in the low 40s, property that belonged to Consolidated Edison was sold to developer Sheldon Solow, who bought it to construct high-rise office and residential buildings.

In a gesture apart from the required mitigation for that project, a source close to the Solow project said there had been discussions of “doing something, I would almost say from a pro-bono standpoint, to improve Robert Moses.”

“We could open that land to make that park more attractive,” the source said. “… From 42nd Street on down through the Con Ed property, you’d have lovely open areas.”

Given these alternatives, there is “no question” that the United Nations’ attempts to build over Robert Moses are a “greedy” land grab, in the view of the executive director of the East Side Hockey League, Jack Collins. The league has used Robert Moses for play for more than 30 years.

“If they have a problem with fixing the Secretariat, they should use their own resources,” Mr. Collins said.

“They have 18 acres of land and are currently using less than half of it. And it seems that everyone who comes to the situation, that’s their first response,” Mr. Collins said.