Diamond district high-rise could be boon for New York's jewel biz

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By Jason Fink

It may seem like an unusual time to spend money on the luxury jewelry industry but that's what city officials were touting Monday as they unveiled plans for a new 34-story office building in the heart of the diamond district.

Construction is about to begin on the International Gem Tower on West 47th Street, a high-rise that will house office space, vaults and retail for diamond dealers. The city plans to provide some $50 million in tax incentives for the project, being built by Extell Development.

"Diamonds are one of New York's best friends and one of our most enduring industries," said Mayor Michael Bloomberg.

Extell is also seeking "free trade zone" status, which would allow companies to import, cut, and then export stones without paying import duties.

The city tax breaks will come only if the building is 85 percent occupied by jewelry related businesses and if 50 percent of the businesses are either new or expanded from existing locations, rather than simply relocated.Bloomberg said the city's diamond industry is facing increased competition from international cities such as Dubai. Giving tax incentives, he argued, will keep diamond dealers in the city and help anchor the industry during a period of economic distress.

The city said the new project, expected to be complete by 2011, will provide 3,000 jobs with some 250 businesses. Many of those will be taken by workers coming from oversees, Extell officials said.

Tags: development , diamond district , real estate

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