How to move downloads folder from bookmarks to places?

Edit file /your_home_directory/.config/user-dirs.dirs. File contents should be below

XDG_PUBLICSHARE_DIR="$HOME/Public"
XDG_DOWNLOAD_DIR="$HOME/Downloads"
XDG_MUSIC_DIR="$HOME/Music"
XDG_VIDEOS_DIR="$HOME/Videos"
XDG_DESKTOP_DIR="$HOME/Desktop"
XDG_DOCUMENTS_DIR="$HOME/Documents"
XDG_TEMPLATES_DIR="$HOME/Templates"
XDG_PICTURES_DIR="$HOME/Pictures"

You can change the path of default directories. If you have missed some directory, check if that is present in this file.

This is answered in How to customize (add/remove folders/directories) the "Places" menu of Ubuntu 13.04 "Files" application? and as indicated there, you might need to edit ~/.config/user-dirs.conf on top of ~/.config/user-dirs.dirs