Israel Land Authority (ILA) is known as a seller of land. The special potential that it sees in land in Jerusalem, however, has pushed it onto the purchasing side. Sources inform "Globes" that ILA has won a pricing proceeding for five dunam (1.25 acres) of land in Gonen B (Katamon) adjacent to Rashbag Street.
ILA already owns 18% of the land, while the rest belongs to a large number of private owners. In contrast to what usually happens in such cases - the sale of ILA's share - in this case ILA decided to buy the rest of the land and become the sole owner of the entire plot.
An internal ILA document obtained by "Globes" explains why ILA decided on this unusual course of action: "Due to the land's location on the light rail route, the District Planning and Building Commission is allowing increased construction rights on this lot (up to 720% and up to 18 storeys). We therefore believe that there is potential for construction of 200 housing units. In addition, it is important to note that lot no. 196 (plot 2), with five dunam (1.25 acres), on which the Commission has the same policy, is adjacent to the lot. If we buy the land, the planning potential will grow and we will receive more than 10.5 dunam (2.625 acres) of continuous land that can be optimally utilized."
An lawsuit for dissolution of the partnership has been ongoing since 2012. According to the documents obtained by "Globes," the main dispute in the case concerns the method of dissolution. ILA submitted an appraiser's opinion to the court in 2015 saying that the total value of the land was NIS 52.86 million. In 2017, the Tel Aviv Magistrates Court order the dissolution of the partnership through a sale. Another appraiser's opinion submitted to the court in December 2017 found that the value of the lot had increased to NIS 87 million. The court accordingly ordered that the minimum price for submitting bids would be NIS 87 million. Since no bid was submitted, the date for submitting bids was extended until July 2018, when it was found that only one bid of NIS 65 million had been filed.
In view of the situation, receiver Adv. Sagi Tirosh proposed holding a pricing proceeding among everyone who contacted him about the matter and expressed interest in the lot, and the court accepted his proposal. ILA took the unusual step of buying the land; its bid was only NIS 500,000 higher than another bid of NIS 70 million for the entire lot. Since ILA's already owns 18% of the land, the price it paid for full ownership was NIS 57.4 million. The deal is subject to court approval. A source who accompanied the deal says that a combination of several factors led ILA to buy the land from the private owners: "We saw potential here, because the land is next to other land owned by ILA, and territorial continuity could be created for marketing hundreds of apartments on all of this land. Furthermore, the land is very close to the light railway route, which increases the demand for the area. In addition, the strong demand in Jerusalem for housing units must be satisfied, and there are not many available land reserves in the city."
Answers to questions addressed to ILA by "Globes" show that planning for the land is slated to take two-three years, after which the two adjacent lots will be marketed. If the Buyer Fixed Price Plan is still in effect at the time, marketing will be on that format.
Published by Globes, Israel business news - en.globes.co.il - on November 13, 2018
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