BSR to build Yad Eliahu urban renewal project

Yad Eliahu development Photo: Division 3

72 old apartments will be demolished and replaced by 275 new apartments on La Guardia Street.

BSR Europe (TASE: BSR), controlled by CEO Nachshon Kivity, will soon begin work on the first urban renewal project on La Guardia Street in Tel Aviv. The group recently received a building permit for the project. The project involves the demolition of three connected apartment buildings at 64, 66, and 68 La Guardia Street with a total of 72 apartments and the construction of four new eight-storey buildings with a total of 275 apartments - an economic coefficient of 3.8 new apartments for each old apartment. The project also includes a commercial ground floor with 500 square meters of commercial space, an underground parking lot, and storage rooms.

The group finished moving the owners of the old apartments to temporary rental accommodations this week. BSR is paying their rent until the new buildings are ready.

Other than the new apartments to be occupied by the tenants of the old buildings, the group has completed marketing of the other 203 new apartments in the buildings to be constructed. An agreement has been signed with Electra Ltd. (TASE: ELTR), which will perform the construction for NIS 200 million. Total investment in the project is estimated at NIS 450 million. The owners of the 72 apartments to be demolished, which have 70 square meters, will receive an additional 20 square meters each. New apartments were marketed to the buyers group at NIS 21,000 per square meter, the average price for an apartment on a middle floor.

The Urban Renewal Corporation, owned by chairman Levi Kushnir, co-CEO Ami Kachlon, director Dan Shapira, and co-CEO Tal Goldstein, which was responsible for obtaining the signatures of 100% of the tenants on consent forms for the project, initiated the project. Urban Renewal Corporation later contracted with BSR, and both companies are equal 50% partners in the project.

As part of its organizing of buyers groups, BSR has constructed new residential and office projects, and the group is now engaging in urban renewal for the first time. BSR also organized a buyers group in this project. The group has reached an agreement to buy a proportionate share of the land and share it, and the group members will jointly fund the construction.

According to the agreements, BSR, which organized the buyers group, not the members of the group itself, is responsible for delivering the new apartments to the tenants removed from the old apartments. Kivity says, "This is an urban renewal startup in the framework of a buyers group. Bank Leumi (TASE: LUMI), the bank providing financial coverage for the project, believes in it and in BSR's experience. The lot is already available and fenced off, and we are organized for beginning work in another month.

"In the same model, BSR and the Urban Renewal Corporation are expected to soon implement another project on Hatayasim Road in Tel Aviv, and are negotiating the signing of additional agreements on La Guardia Street, in Bat Yam, Ramat Gan, and Azor."

Advocate Mira Bornstein from the Hartavi-Bornstein-Basson & Co. law firm represented the tenants, and Advocates Roy Makov, Moshe Huberman, and Ronen Asher from the Hermann, Makov & Co. law firm represented the buyers group.

There are six urban renewal projects on La Guardia Street in Tel Aviv at various planning stages, some by the Tel Aviv municipality and its Ezra & Bizaron Housing subsidiary, others by private developers. The Tel Aviv municipality supports plans aimed at making La Guardia Street a lively thoroughfare, including commercial ground-floor establishments , similar to Ibn Gvirol Street.

Published by Globes [online], Israel Business News - www.globes-online.com - on July 31, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Yad Eliahu development Photo: Division 3
Yad Eliahu development Photo: Division 3
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