By Craig Karmin
One of New York’s most prolific developers is opening a 34-story skyscraper in Manhattan’s Diamond District this week, hoping to change the face of the storied neighborhood with security technology reminiscent of “Mission: Impossible.”
Extell Development Co. believes that jewelry tenants will be willing to pay up for features including iris scanners, 350 cameras scattered throughout the building, and tracking technology that notifies security if someone working in the building is in a spot where they don’t usually go. Visitors will have four finger prints taken at the front desk.
The $750 million glass and steel tower stands out sharply in the district on West 47th Street that has been the center of the diamond trade in the U.S. since World War II. The neighborhood consists mostly of low-rise buildings, where businesses operate in spaces as small as 400 square feet and interiors sometimes suggest a Middle Eastern bazaar.
“The people there are working in antique buildings,” says Gary Barnett, Extell’s president, who also worked in Belgium’s diamond business for 10 years. “We were brave enough, or perhaps foolhardy enough, to try something modern.”
The big question facing Extell is whether enough jewelry companies will pay the high purchase prices he is asking. The building is charging an average of $1,000 a square foot for commercial condos, according to Extell.
After a sluggish start, the company says sales are picking up. More than half the units are sold and another 10% to 15% are in contract or have buyer commitments, Extell says.
The midtown location for New York’s Diamond District grew during the 1930s as thousands of Orthodox Jews in the business fled Belgium and the Netherlands to escape the Nazis. Today, about 2,600 businesses are located there involved in diamonds or gems, according to the 47th Street Business Improvement District.
Many of these are mom-and-pop businesses that likely couldn’t afford Extell’s price tag. But the developer believes that the building will appeal to international companies and others outside New York that haven’t been willing to set up shop in the district because modern space wasn’t available.
For example, Jordan Tabach-Bank, chief executive officer of Beverly Loan Co. in Beverly Hills, Calif., officially opened the doors of a New York office at the tower this week. His firm makes short-term loans collateralized by gems, as well as things like Picasso paintings and memorabilia such as football Super Bowl rings or Oscar statuettes.
Mr. Tabach-Bank says his California office gets many of its clients from the East Coast, and he had been trying to find a New York City location for years. But he wasn’t taken with what was available on 47th Street. “I wanted a location where my clientele could feel safe and have a sense of privacy,” he says of the 1,000 square feet he purchased on the 3rd floor.
The building also has a health club, underground loading docks and floor-to-ceiling windows that allow jewelers to take advantage of natural light.
The biggest presence is the Gemological Institute of America, which acquired three full floors and nearly 80,000 square feet of space to relocate from around the corner at Fifth Avenue. The Institute also is moving its school from 34th Street to the building.
Other owners include Malca Amit, a courier company for the diamond and gem industry, and Eurostar, a global diamond conglomerate.
Office condos targeted at the gem trade go to the 21st floor. Above that to the 34th story is office space with a separate entrance on 46th Street that Extell is marketing for lease or sale in bulk to non-diamond businesses, an Extell official said. The developer is asking $96 a square foot in yearly rent, one of the higher asking rents for the neighborhood.
Extell says it has no lease signings but that it was in several negotiations, including one for the entire block of space.
Some in the district are worried that the skyscraper could change the nature of the street.
Kenneth Kahn, executive manager of 580 Fifth Avenue, one of the district’s leading buildings, was initially one of those critics. But he says the impact on the street has been less dramatic than he once feared. “I don’t think it’s going to change the character of the street,” he says.
Extell is best known as a developer of New York apartment buildings. The company has been making headlines lately with its project on 57th Street that has been selling units for a few thousand dollars a foot.
Write to Craig Karmin at firstname.lastname@example.org