In the heart of NY City’s Diamond District...

After a year-long process, the U.S. Department of Commerce has designated 580 Fifth Avenue, which is in the heart of New York City’s Diamond District, as a Foreign Trade Zone (FTZ). It is the only completed office building in the city to receive this distinction, given the International Gem Tower is still under construction.

Saks Fifth Avenue New YorkKenneth Kahn, executive manager of 580, explained that the biggest advantage of being in an FTZ is not paying duty on foreign imports. “It gives us a manufacturing edge. Anyone who imports materials into the U.S. has to pay duty. If you are within this zone, duty is deferred on those products.”

Kahn added that any goods directly exported from the building are also duty free. “If someone imports bracelets from Europe and is remanufacturing them with diamonds, while they are in the zone, there is no duty paid. If you send them back to Europe, there is no duty paid either. It’s very good for people in the building shipping overseas.”

Although 580 is an FTZ, each of its individual tenants must be approved to get FTZ perks and a few have already started with the proper paperwork, Kahn said. Once a tenant is designated with its own FTZ status, they will be able to assemble their merchandise, exhibit, clean, and manipulate products duty free.

“This is quite an accomplishment,” Kahn said, adding that there are many more alterations coming to 580, including renovated public areas and bathrooms and additional elevators. The building's re-invention is part of a $50 million capital improvement plan. “Our tenants are unique. Anything we can do that is good for them, is good for us.”

By: Denise Romano of RAPAPORT

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