Sixty percent of the lands marketed by the State of Israel in 1995-1998 were awarded without tender. The gift motif continues: the amount the developers paid for the land was only 40% of its real value. Acre by acre, in twenty thousand transactions, various developers contrived to hurdle all obstacles posed by the Obligatory Tenders Law. Some by means of legal manoeuvres, others on the grounds of ardent Zionism.
Thus, in the name of preserving the homeland, a certain defence establishment member last year obtained land in the north for the purpose of individual settlement. The Court, intervening in the festival, forbade the authorities to hand over land for that purpose, but the merrymaking continued. Planning committees are currently giving that same individual permission to build bed-and-breakfast units on that very land.
It was in this way that, fifteen years ago, in the name of promoting tourism, two different developers obtained an attractive area in the sands of Eilat for setting up a sound-and-light display. For fifteen years, the lands stood bare. Lights and sounds kept coming, from the sea, but no demand came from governmental bodies for the return of the land.
Three years ago, the virtual show in the successful "Mul Hayam" ("Facing the Sea") mall in Eilat closed the landscape off for the local townspeople, at the same time shutting the door in the face of other commercial areas. Not a murmur came from senior government officials.
Lands belonging to Herod’s Gate (Gate of the Flowers) in the Old City of Jerusalem, are due to come up for review by the joint committee for the allocation of land to tourism, the one that handed over the land tracts for the "Facing the Sea" mall without tender. On the face of it, this is just another marginal inter-ministerial committee. In fact, it is a wide-open door for tender-exempt developers.
Israel Lands Administration director-general Avi Drexler announced, a year ago, that under his management, the Israel Land Administration would stop playing "let’s pretend" and approving tender exemptions. At the same time, he started taking steps for retrieving land handed over in this fashion in the past. Developers got the message, took shelter and stopped asking the ILA committee for exemptions while waiting for the storm to pass and the ILA director to be replaced.
The lands at Herod’s Gate nonetheless crept into the list of applications. Asking is permissible, real estate mavens responded. The question is, whether approval will be given. There is no knowing what the joint lands committee will decide. What is clear is that the gaps must be closed by a higher judiciary instance. The ILA, even if headed by one of the most vigorous opponents of the method, cannot stop the whole dyke with its thumb. The Obligatory Tenders Law is riddled with holes. Twenty-five exemption clauses and dozens of committees enable developers to swim back and forth as they please. The Attorney-General, or the enforcement team set up by the State Attorney's Office, for monitoring and examining various aspects of real estate transactions, must come to grips with this problem, and corrective legislation would do no harm either.
Published by Israel's Business Arena July 11, 1999