New York Diamond Tower, West 47th Street, Manhattan
Community Board Five’s Land Use and Zoning Committee hosted a presentation about the proposed Extell Diamond Tower, to be built in the Diamond District, West 47th Street, New York, by Extell Development LLC. We also heard comments from representatives of the newly-formed Coalition to Save the Diamond District, comprised of local property owners and tenants on 47th Street, opposing the grant of tax abatements from New York City Industrial Development Agency (“IDA”) to the developer.
It is our understanding that the new tower is to be built as-of-right, including the use of air right transfers which have not yet been completed, and is anticipated to be between 600,000 and 750,000 square feet. The tower will run through the block between 47th and 46th Streets, contain a secure underground parking facility and may also contain a Diamond Museum and a training facility. The developer has stated his intention to construct a commercial office building, and will market it primarily to diamond and jewelry-related
We also understand that the IDA has preliminarily agreed to provide abatements in the sales, mortgage recording and property taxes; the exact amount of the City’s financial assistance will be determined on a scale correlating to the percentage of the building occupied by diamond and jewelry tenants, in general, and those new to, or expanding in, New York City. Specifically, the full benefits would be available if 85% of the new building is comprised of diamond and jewelry tenants, and at least 50% of the space is occupied by new or
expanding diamond and jewelry tenants; conversely no benefits are available if less than 65% of the building is occupied by diamond and jewelry tenants or less than 20% of the building is occupied by new or expanding diamond and jewelry tenants. The developer estimates these benefits to be worth between $5 and $6 per square foot annually, over a ten year period.
Community Board Five is pleased to see a private developer interested in revitalizing the Diamond District. The new building will have the potential to reenergize the street.
Additionally, the new building will provide additional Class A space and offer valuable services such as secure, off-street unloading facilities. We believe the new building will contribute to making the Diamond District more competitive to other national and international centers, and will by attracting new dealers, retailers and industry affiliated businesses.
Coalition representatives expressed concern that the developer, in order to fill the office spaces in the new tower, will “poach” existing tenants currently in the Diamond
District to the detriment of existing building owners and, further, that through name changes or other means, the tenants will attempt to be classified as new or expanding businesses to qualify for the abatements. The Coalition is concerned about the possibility that the new tower may destabilize the Diamond District, rather than reenergize it.
While Community Board Five does not oppose the issuance of tax abatements to Extell Development LLC, we would prefer to see these incentives as part of a much larger program that would benefit all of 47th Street and demonstrate the City’s
firm commitment to improve the entire Diamond District. The Coalition to Save the Diamond District is an ideal group to help the City of New York identify the needs of the Diamond District, and to work collaboratively with the City of New York to implement those critical upgrades. We hope that the Coalition and Extell Development LLC will realize they each benefit from the other’s existence. Together, their cooperative efforts can make theDiamond District stronger, safer and more prosperous.
We request that City officials meet with the Coalition to Save
the Diamond District in collaboration with Extell Development LLC to work toward a future vision for an industry that is crucial to the economic well-being of our City. Community Board Five is available to facilitate any appropriate meetings. Additionally, we urge the City to implement strong overview and enforcement of compliance with the terms set out by the IDA.
Community Board Five is committed to the revitalization of the Diamond District, including both small diamond related businesses on 47th Street that have been family owned and
operated for generations, and new diamond and jewelry tenants that will burnish the District’s reputation throughout the world.
The above letter passed with a vote of 30 in favor, 0 opposed, 1 abstention.