TESTIMONY

Testimony On Diamond Tower—Extell Development
by Amad Judeh, Director, Policy and Research
PARTNERSHIP FOR NEW YORK CITY

New York, New York
November 9, 2006

PDF 59K

Good morning and thank you for the opportunity to testify today in support of Extell Development’s Diamond Tower project and its application before the NYC Industrial Development Agency.

The Partnership is an organization comprised of the chief executives of the city’s largest employers. It is committed to working in partnership with government, labor and the non-profit sector to enhance the economy and create jobs.

Extell’s plan would create a premier facility with an estimated 700,000 rentable SF, housing tenants covering all aspects of the diamond business and offering business services that all companies in the diamond district could utilize. The facility would both 1) help retain the existing 2,300 diamond businesses and support organizations, such as the GIA and Diamond Dealers Club and 2) encourage an estimated 2,600 new jobs to locate in New York—particularly with companies that can exploit the unique opportunities within the New York market.

With a high percentage of the most valuable diamonds being sold in the diamond district and nearby 5 th Avenue, this center will help re-focus the diamond industry in New York by attracting those skilled cutters and tradespeople that specialize in the finest category of high-end diamonds.

The diamond industry is one of the last remaining manufacturing vestiges that our city can maintain. The average wage of this type of job—estimated at over $60,000—is an inherent strength of this industry. It is critical that we re-focus the industry on what it can do best and invest now to stop the loss of this industry to our international competitors.

High real estate and other operational costs are a primary factor in the migration of d iamond dealers, wholesalers, distributors, and cutters to other cities. This development, with support from the NYC IDA, will help mitigate the effect of these costs on the industry. The benefit package proposed for this development is a responsible, appropriate use of public sector dollars to leverage private investment.

The United States acquires almost half of the world’s diamonds each year, representing $25-30 billion dollars annually. While this market was once controlled by the 47 th Street diamond district and New York City, today 86% of the diamonds imported into the United States are cut and finished in China and India. Israel, Shanghai and Dubai have developed state of the art diamond exchange complexes that are expediting the losses we are seeing in New York. The industry has struggled over the last decade with international competition quickly absorbing the market share that New York continues to neglect.

New York should support a diamond industry that does more than simply sell retail diamonds, which is regrettably the situation today. Instead, the City should work to maintain the full array of skilled and professional jobs needed for a global diamond hub. This integrated diamond facility will provide that support.

Thank you.

The Partnership for New York City (www.pfnyc.org) is a network of business leaders dedicated to enhancing the economy of the five boroughs of New York City and maintaining the city’s position as the global center of commerce, culture and innovation.