Diamond dealers in New York are building a new $750 million building modeled on Israel’s Diamond Exchange, replete with security and a one-stop-shop for diamond trading and selling.
They say diamonds are a girl’s best friend and many American women hope for one of these small, but valuable baubles on the day of their engagement. A little known fact is that one in every two diamonds sold in the United States comes from Israel.
While the tiny country in the Middle East, about the size of New Jersey, has no known diamond mines of its own, it is a world-leading trade center sitting at the heart of most major diamond transactions.
A leader in diamonds and security, Israel’s diamond industry, based at the Israel Diamond Exchange (IDE) in Ramat Gan, is a model that many countries aspire to when setting up their own diamond trade centers, says Assaf Levin, the spokesperson for the IDE to ISRAEL21c.
“From India, from Turkey, and from other countries, people have come to learn from us how to organize secure compounds for diamond dealers,” says the president of the IDE, Avi Paz.
“We teach them how to provide a commercial infrastructure for the diamond dealer from a security perspective and supporting services for the diamond dealers,” he adds.
An international gem
The word catches on. Now, a new Manhattan building in New York’s Diamond District will be built on the Israeli model, replete with security and a one-stop-shop for diamond trading, selling and banking options. Expected to cost $750 million, and to be completed by mid-2011, executives from Extell, the building firm, says it will be called the International Gem Tower.
Representatives from Extell were in Israel touring the IDE facilities in mid October, and talking to Israeli customers about what these new Manhattan facilities will mean for future diamond transactions.
Using the Israeli model as a base for the new Manhattan building, the International Gem Tower will replace the hundreds of old and dilapidated buildings in the Diamond District on 47th Street between 5th and 6th Avenues. This will give diamond dealers and retailers, a secure, safe and positive working environment for trade.
In the Israeli model, four buildings are connected using a system of bridges giving diamond dealers from all over the world, a complete ecosystem for their diamond dealing needs. But in New York, their model will be combined into one 34-story building.
“So basically the unique thing is: it is like a big city totally disconnected from anything else,” says Levin. “When you walk into the Israeli exchange you have everything. There is an exchange floor for polished and rough diamonds, there are banks working with the diamond industry, tax offices: Everything a diamond dealer needs. There is no need to walk out for even a restaurant, the synagogue, a doctor or a barber.”
The Israel buildings include some 100,000 square meters of office space as well.
Be your own Brink’s truck
“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,” said Extell’s senior vice president of project management, Raizy Haas.
While some Israelis worry that such a dazzling new center in Manhattan could take business away from Israel, Paz — also the head of the World Federation of Diamond Bourses — says that Israel’s advances in polishing large stones will keep it a major international hub.
And industry experts in New York hope the new building will give a much-needed boost to the entire luxury goods industry — one that has been going through tough economic times.
“As far as security is concerned, if you are a diamond dealer in New York or any other country, you’ll have to walk in the streets with your money and diamonds. It’s pretty terrifying,” explains Levin, and that’s why so many people like the secure mall-like structure that the Israel Diamond Exchange uses.
“In Israel you can see people with their suitcases, and possibly with hundreds of thousands and sometimes millions of dollars worth of product in there. They can walk with no fear at all. Israel is one of the most important diamond centers – one of the reasons is thanks to the security, but also our knowledge,” Levin adds. “They see in Israel that it works. We are happy to teach them so they can learn.”