The rise in real estate prices over the past decade has boosted the value of properties owned by the Israel Broadcasting Authority (IBA) to an estimated NIS 1.2 billion. These properties include the old Shaare Zedek hospital building on Jaffa Street and the Romema complex in Jerusalem and rights to the Kirya compound in Tel Aviv. On Wednesday, the Landes Committee will publish its recommendations, after the IBA reform was frozen.
The Landes Committee will reportedly advise closing IBA in its current format, firing 1,000 of its 1,700 employees, and rehiring the remainder in the new format. For this purpose, IBA will sell its properties under a deal worked out with the Ministry of Finance.
The Landes Committee will propose one of two alternatives for a new IBA complex: one, the old Shaare Zedek building, for which there is a plan for the construction of towers for residential, office, and hotel use, will be sold in full, and the new IBA will use the proceeds to move to another premises; the second is to sell part of the building, and the new IBA will keep one of the lots zoned for an office building. A decision depends on the answer to question if there is justification for the IBA, after it is streamlined, to keep in such expensive real estate in one of Jerusalem's most sought-after neighborhoods.
The most valuable of the IBA's many properties is the old Shaare Zedek hospital building at 161 Jaffa Street, which it bought 19 years ago, and now houses its management. The 17-dunam (4.25-acre) property includes the old landmark building, which cannot be demolished or expanded. The current urban building plan that applies to the property is obsolete and the IBA is in the process of amending it to use the building as a landmark 150-room hotel. The rest of the site will be zoned for a high-rise with 200 apartments, a 25,000-square meter office tower, and commercial space. The IBA would keep one of the lots for a new 27,000-square meter broadcasting center. The property's value after the plan is approved is NIS 600 million. If the IBA keeps the lot for the proposed broadcasting center, its proceeds would fall to NIS 450 million.
The IBA also owns 80% of a 19-dunam (4.75-acre) lot in Romema, currently used for its technical and engineering activity. In June 2013, the Jerusalem Regional Planning and Building Commission approved a plan to build six 12-story residential buildings with 310 apartments on the site. The current value of the land is NIS 250 million.
The IBA owns a building on Kalman Magen Street in the south Kirya compound in Tel Aviv, used for its local radio and television broadcasts. The property was valued at NIS 300 million in 2012, but the IBA's net proceeds from the sale would be NIS 150 million because of the need to move the activity elsewhere.
The IBA owns a building on a 3.2-dunam (0.8-acre) lot on Yermiyahu Street in Jerusalem worth NIS 50 million. There is an approved urban building plan for the site for a high-rise with 60 apartments.
Published by Globes [online], Israel business news - www.globes-online.com - on March 4, 2014
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