The Woodside, NY-based firm is looking to consolidate operations currently housed in five facilities in the New York metro area into the Tuckahoe Road complex. The facility, which Yonkers city officials estimate is over 500,000 sf in size, was a former distribution center for Saks Fifth Ave. Several years ago, Qwest Communications signed a long-term lease for the entire building with building owner Alfred Weissman Real Estate of Yonkers several years ago. The financially troubled telecommunications firm has 22 years left on its lease at the Yonkers property. The Denver-based firm had planned to convert the facility into a multi-million dollar computer technology center. However, the initiative never really materialized and the building has sat vacant for years.

If the deal closes, the sublease transaction with Diam International would be the largest commercial lease transaction in Westchester in 2003 as well as in recent memory.

David Tolly, executive vice president and chief financial officer of Diam International, said that Diam is still in negotiations with Qwest on the sublease deal.

"We are all very hopeful that this will come together, but there is a possibility that it might fail," Tolly said of the firm's potential sublease at the Tuckahoe Road property.

Tolly adds that the company is also considering possible sites in the Jersey City, N.J. area and in the five boroughs. Whatever site is picked, the new facility would house 800 to eventually approximately 1,200 Diam employees. He noted that the complex would include manufacturing, warehouse and administrative functions. He also did not rule out that the new property could eventually be the company's corporate headquarters. The company's corporate headquarters is now located at 26-45 Brooklyn Queens Expressway West in Woodside.

He notes that the company hopes to make a site selection decision in the next 30 days.

Diam International met with the Yonkers Industrial Development Agency last week for possible incentives. The IDA approved an inducement that will eliminate sales tax for improvements made to the Tuckahoe Road building and the exemption of the state's mortgage tax on the transaction. The IDA also approved a measure that would have the agency bond up to $10 million in connection with the Diam sublease deal. The company will also be eligible for a host of other incentives since the site is located in a State Empire Zone, according to Edward Sheeran, special assistant to Yonkers Mayor John Spencer.

Sheeran notes that if Diam International does sign the sublease deal, the company will spend more than $12 million in improvements and relocation costs. He says that the city has been holding talks with Diam International for more than a year in connection with the firm's interest in setting up operations in Yonkers.

Diam International, which is owned by Heritage Partners Inc., a Boston-based private investment fund, occupies in excess of 1.5 million sf of factory space in eight production sites in Europe and North America.