The character of America’s two most prominent diamond and jewelry districts—in New York City and Philadelphia—may change dramatically as developers increasingly scout them for non-jewelry tenants.
In New York City, speculation is centered on the intentions of Gary Barnett, the former diamond trader who built and still owns the 47th Street International Gem Tower. According to DNAinfo and public records, Barnett’s company, Extell Development, plans to demolish two 47th Street buildings it recently purchased, 2 West and 10 West. (Tenants have already vacated those buildings.)
The company will also knock 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 rumors that Barnett owns other buildings on 47th Street, which have also been emptied.
No one knows what Barnett will do with these spaces, though just about everyone believes that Extell will build a hotel or office tower not specifically related to jewelry. At least one source that has spoken with Barnett agrees.
So does rival landlord Ken Kahn, executive manager of 580 Fifth Ave. “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.”
All of which, many think, will change the face of 47th Street, which has retained its character a lot longer than other Manhattan business areas like the flower or toy districts. “This developer wants to demolish the Diamond District,” said a recent New York Post piece on Barnett.
But associates note that when Barnett tried to cater to the jewelry industry, he struggled: The Gem Tower was originally slated to be 40 stories, but now it’s just 34. And while it was originally supposed to be all jewelry, S.L. Green Realty Corp. is now marketing the top floors to non-jewelry companies.
Barnett did not respond to a request for comment from JCK. An Extell spokesperson declined to comment.
Philadelphia’s Jewelers Row—which is considered America’s second-largest diamond district and the oldest in the United States—may also be in danger, though the plan to transform that area has raised considerable local outrage.
In August, The Philadelphia Inquirer reported that developer Toll Brothers wants to replace six of the district’s iconic buildings with a housing complex. The plan “could forever alter the longstanding enclave of diamond merchants, watch shops, and gold sellers,” said the story.
A spokesman for Toll Brothers confirmed the news but tells JCK that it “plans to engage the local community” throughout the building process.
“We are committed to delivering a residential building that is respectful of the history of Jewelers Row while rejuvenating it for the future,” says marketing director Michael J. Duff. “Although we are still considering our prospective development plans for this project, we intend, through contextual architectural design, for the existing cornice line of Sansom Street to remain intact while retaining retail space along the street level for jewelry stores to preserve the iconic Jewelers Row streetscape.”
Hy Goldberg, president of the Jewelers Row Association, says his group is exploring its options. “Everyone has been kept in the dark,” he says. “We don’t know if this is a fait accompli or if we will have to seek middle ground and maintain the integrity of a truly historic area. We are working with the local preservation alliance to stop this. Right now it looks like the developers are holding all the cards. But nobody knows for sure.”
Goldberg says his group has been talking with the developer, but so far has received only verbal assurances. “They say they want to put jewelry stores back into the five storefronts,” he says. “It’s not like they want to put a CVS or something in there. But the bad news is that there are many jewelers who will have to relocate.”
One resident who is in danger of being displaced, Frank Schaffer, head of FGS Gems, says that the current situation is a “nightmare” for small businesses like his. “Will it change the street? Absolutely. Will it change business on the street? Absolutely.”
Schaffer hopes to rally fellow residents against the plan, but says some are just apathetic and will likely close up shop regardless.
“A lot of people feel this is inevitable,” he says. “There are options to fight this that have been successful in the past, but if there is not enough support, there is nothing I can do. It shows the state of the industry.”
Top: a scene from New York City’s bustling Diamond District (Richard Levine/Alamy); inset: Extell Development’s Gary Barnett (Frank Franklin II/AP Photo)