Gary Barnett is trying once again to polish the rough diamond that is his International Gem Tower.
The 32-story project designed by SOM has been in the works for years now, with the hopes of creating a modern, centralized complex for the city’s arcane diamond industry. From the start, it has aggravated other landlords along 47th Street who feel it will not attract international clients as Barnett insists, but instead pilfer long-time Diamond District businesses. Coming online just as the real estate market collapsed, the project has struggled to get built, shrinking in the process.
Barnett is known for his brash, hard-charging style, so it should come as no surprise that he and his Extell Development have decided to continue construction on the International Gem Tower despite an inability to secure construction loans, The Journal reports. Instead, the developer and its partners on the project will use their own equity to begin building, a rare tack for a New York developer.
The move is an especially ballsy one since the tower has an unusual tenancy. Instead of renting out space to diamond traders, Extell plans to sell commercial condominiums to the merchants, a particularly risky move if the tower gets built and cannot find enough buyers. Currently, the building has commitments for 150,000 square feet, or about 20 percent of its space, according to The Journal.
What is especially confounding about Extell’s approach, though, is this is the second time it has decided to build without construction loans, having begun work on the building’s basement last year.
Has Barnett made a bet even he can’t win? He’s come out of closer calls in the past, so perhaps what is taken for recklessness is in fact the machinations of one of our shrewdest developers.