EXTELL'S DIAMOND TOWER IN THE ROUGH
February 3, 2009
GARY BARNETT'S Extell hopes to sell more than $355 million worth of jewelry-industry condominiums at its eagerly awaited Diamond Tower on West 47th Street.
And although Extell doesn't have construction financing yet, Barnett is confident the 41-story tower, with a striking Skidmore Owings & Merrill design, will be "substantially complete" by Oct. 31, 2010.
That's according to the commercial-condo offering plan Extell submitted last week to the state attorney general's office, which requires reports be submitted for condo and co-op conversion projects.
The document also reveals more than the developer has ever shared about the project, officially known as 50 W. 47th St.
The site between Fifth and Sixth avenues, now a construction pit, is expected to become the new, modern home of the gem industry, which has traditionally worked out of small warrens in run-down, prewar buildings.
As we've reported, the tower - 581 feet tall with 602,819 square feet of floor area - will have two different components above ground-floor retail.
About half the floor space will be devoted to diamond-industry users and half to regular commercial offices. The diamond portion will have its entrance on 47th Street and the offices on 46th.
Now, we learn from the offering plan (which must first past muster with Attorney General Andrew Cuomo's office before sales can begin):
* Extell plans to offer 84 of 88 "industry units" for sale. The diamond spaces will all be in the tower's lower half, on floors three through six, eight through 12 and 14 through 20. Extell is keeping four units of 29,300 square feet each for itself on floors three through six.
But the units above them are up for grabs. Sizes range from 816 square feet (asking as low as $1.203 million) to 11,064 (up to $15.2 million).
* If all the industry units are sold, Extell will see a total payoff of nearly $355.3 million, according to the offering plan.
Diamond industry veteran A. Joseph Lipton will be the sales agent, while CB Richard Ellis will be the managing agent for the commercial-office side (and presumably leasing agent as well).
Still, two questions remain:
Will Extell be able to land a construction loan in a no-credit climate that has stopped other Manhattan developers from going forward? (We'll bet yes.)
The second has to do with Extell's deal with the city's Economic Development Corp., signed two years ago, which grants Extell up to $49.6 million in tax benefits.
The complicated arrangement provides for tax relief for Extell based on the percentages of the building's floor area that are ultimately used for the diamond industry and for firms new to the city.
At the time Extell and EDC agreed to the formulas, the expectation was that the jewelry-industry space would be leased to users, not sold as condos.
It's not clear if the sale strategy affects tax benefits, but a source close to Extell said it's "working with EDC to determine whether the condo plan will still meet the criteria."
The Diamond Tower has been one of Manhattan's most closely followed development schemes ever since Barnett began buying up properties on the fabled block.
Extell's plans not only punched a hole in the middle of the block, they also split jewelry world insiders.
Some tried to discourage landlords from selling to Barnett, while others welcomed the tower essential to the industry's future.