New NYC diamond exchange based on Israeli model
Manhattan building to be established upon Israel Diamond Exchange model. President of Israel's exchange praises initiative, says Israel may even benefit from it. Exchange building, which will cost $750 million, will provide all necessary services and security for those working in field
Another source of pride: A diamond exchange center is being established in Manhattan based on the Israeli model. Upon the mid-2011 completion of the building that will house the largest diamond and jewelry center in the US, Manhattan's Diamond District is expecting to be revolutionized. The building will be known as the International Gem Tower.
The new center is in actuality an exact copy of the model used in the Israeli Diamond Exchange, which is located in Ramat Gan, and will provide all the necessary services for the industry under one roof and will up the level of personal security provided to those working in the field. The project will cost an estimated $750 million.
The diamond and jewelry exchanges in Manhattan are located in what is known as the Diamond District, located on 47th Street between 5th and 6th Avenues. According to US-based Extell Development, which is building the new exchange building, hundreds of people in the diamond business around the world are renting old, dilapidated buildings in the Diamond District, and are forced to deal with below par work conditions on a daily basis.
Extell additionally claimed that the existing level of security is insufficient for dealing in diamonds and jewelry. This also happens to be the reason the American company takes pride on the fact that it has planned the new complex based on the Israeli model, in which four buildings are interconnected through a system of bridges, which provide diamond dealers from around the world comprehensive and total answers for all their needs. The model has been combined into one 34-storey, 70 sq. meter (about 750 sq. feet) building.
"Israeli diamond dealers have grown accustomed to doing business under the mantle of increased security provided by the diamond exchange in Ramat Gan that provides quite a wide range of services," said Extell's Senior Vice President of Project Management, Raizy Haas. "The tower that will be built will provide the perfect response for all the needs of the diamond and jewelry dealers, including the most advanced security methods in the world."
'Israel won't be hurt'
Israel Diamond Exchange President Avi Paz did not hide his sense of pride in the planned Manhattan complex in a conversation with Ynet: "From India, from Turkey, and from other countries, people have come to learn from us how to organize secure compounds for diamond dealers. We teach them how to provide a commercial infrastructure for the diamond dealer from a security perspective and supporting services for the diamond dealers."
But will this come at the expense of the Diamond Exchange in Ramat Gan?
"The fact that such amenities will be accessible to the Israeli trader will help, serve, and make trading easier. Such a center in New York is a blessing for us because the city is our sales center. The more developed the center is, the more convenient and simple it will be to sell merchandise there – also in terms of security.
"You also have to remember that every second diamond sold in the US comes from Israel. We still have a comparative advantage in polishing, especially in large stones," added Paz.
You won't lose buyers to the center in New York?
"The second intifada decreased the number of buyers. Buyers abroad have already grown accustomed to the fact that we go to them and we are making huge efforts in order to bring them back."
But, when the situation improves, they are likely not to return because there are other options.
"Yes. It is good that these centers are being established. We must find new markets and improve existing ones. We are already on the path to bringing buyers back to Israel."
And what about the diamond dealers themselves?
"The diamond dealers won't move their businesses (to New York). Those are just offices in a building in New York that provides support and security for trading. As of now, there already is the capability of going abroad in the Israel Diamond Exchange. The better the facilities, the better the marketing capabilities will be."
It's no secret that the sector is facing difficulties. Will this building help boost the industry?
"The market will grow when the recession recedes and the demand for luxury items increases, especially for those that maintain their value like diamonds. A diamond is a long-term investment channel. In this context, the building in New York will only help."
Extell is slated to host an event on October 19 for Israeli diamond company representatives to explain and market the New York project.