DIAMOND DISTRICT — Extell Development has obtained demolition permits for 10 adjacent buildings in the neighborhood for an as-yet unannounced project, possibly forcing hundreds of jewelers and other businesses to relocate, according to records and sources.
The buildings are on West 46th and West 47th streets, near Fifth Avenue. The city last week gave the go-ahead to demolish 10 W. 47th St., a 14-story building, formerly home to numerous jewelers, gem cutters, and diamond exchanges, that Extell bought last August for $74 million, records show.
It has also caused rents to rise for neighborhood businesses that remain.
“It has been a major dislocation for the people in those buildings, and because of that the rents have gone up,” said a source familiar with the neighborhood's real estate market. “It’s the same amount of jewelers competing for less space, so of course it’s just supply and demand. Everyone is saying they need space but can’t find it.”
Department of Buildings records show 10 W. 47th St. joins the following buildings on the chopping block:
► 2 W. 47th St., which had its demolition permit approved in March.
► 562 and 564 Fifth Ave. between West 46th and West 47th, two buildings approved for demolition in May.
► 3-13 W 46th St., all of which were approved for demolition in January.
Rumors have swirled about the project since Extell bought 10 W. 47th St. last year, with suspected projects including a hotel or a shopping mall. But there has been no word from Extell or its CEO Gary Barnett, himself a former diamond trader. The building appears to be currently empty.
Representatives for Extell did not respond to requests for comment.
“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, ” the 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.”
Extell has spent hundreds of millions of dollars buying up the properties it now plans to demolish, according to property records.
Whatever Extell builds on the block, it won’t be Barnett’s first foray into the Diamond District. In 2014, Extell opened the International Gem Tower, a 34-story building that’s home to an array of diamond industry businesses.
Barnett made waves in 2006 when the city granted Extell $49 million in subsidies for the Gem Tower without designated space for jewelry workers, and after numerous objections from other building owners, the city changed the deal, requiring Barnett to fill 65 percent of the building with diamond industry tenants in order to receive the subsidies, according to the New York Times.
Nor is it the first time Extell has had a major impact on a Midtown neighborhood. According to some elected officials and small-business advocates, a handful of Extell projects near Broadway in the '50s has resulted in "high-end blight" and an abnormal number of vacant storefronts in the area.
CORRECTION: A previous version of this story misstated the ownership a of a building at 20 W. 47th St.