Developer plans demolishing 10 buildings on or around 47th Street in New York City.
Since building the International Gem Tower (IGT), Extell Development has become one of the major property owners in the New York City Diamond District. Now, this developer, headed by Gary Barnett, a former diamond trader, seems ready to make a new move and become an even more dominant force on 47th Street.
Actually, no one has a clear understanding of it’s intentions.
“Actually, I have real estate business experience since a very young age. My father entrusted me with the management of his portfolio when I turned 21. One of the lessons I have learned is that commercial real estate is really a black box: its super opaque, and it’s hard to get the information.”
According to DNAInfo and public records, Extell plans to demolish two buildings it has purchased—2 West 47th St. and 10 West 47th St.. It’s also knocking down two nearby buildings—562 and 564 Fifth Ave. between West 46th and West 47th streets—as well as six buildings on West 46th Street. There are also rumors that Barnett owns other buildings on 47th Street, which have also been emptied.
Something is cooking
The company isn’t addressing all the speculation (including to JCK), even after The New York Post ran a story with the headline, “This developer wants to demolish the Diamond District.”
“Suspected projects including a hotel or a shopping mall. It’s definitely going to change the face of 47th Street, but what it will be I don’t think anyone has any idea yet,” a source said. “It’s a family-driven industry and your heart goes out to people who may have been in the same spot for 30 or 40 years who have to leave.”
Obviously, 47th Street is prime midtown Manhattan real estate, walking distance from both Times Square and Grand Central. However, New York City also has an interest in keeping the diamond and jewelry businesses here, given its importance to the local economy.
It likely won’t include jewelry
When Extell built IGT, its tax abatement was contingent upon having a certain amount of diamond and jewelry tenants. That building never realized its full ambitions—it was originally slated to be 40 stories, but it’s 34—and S.L. Green is now marketing the top floors to non-jewelry companies.
Ken Kahn, executive manager of 580 Fifth Ave., believes that whatever Extell is planning, it likely won’t include jewelry.
“I think there is enough space for the industry already,” he says. “You aren’t going to be able to fill up another building. When you are talking about a building on that level, you are talking about rents that are far greater than the rents that are being charged today.”
One source that has worked with Extell doesn’t think the developer will hurt the industry, noting that IGT has been a force for “positive change” on 47th Street. Since its construction, a number of buildings have gotten makeovers, including 580 Fifth, which now boasts a new lobby and will soon host a Sephora store on its ground floor. But elsewhere on the street, the hawkers remain, and the ground-level retailers are a mixed bag.
In 2008, The New York Times marveled at 47th Street’s continued resilience, given that Manhattan districts devoted to flowers, photography, and toys had all but disappeared. That hasn’t happened yet to the Diamond District. But it’s not surprising that these recent moves—and Extell’s continued silence about them—has many worried that one of the industry’s iconic streets may soon be changed forever.
“Inevitable change, that is the dominant factor in society and in business today. No decision can be made any longer without taking into account not only the world as it is, but the world as it will be.”