The Jerusalem District Planning and Building Commission has decided to restore the building rights in the Holyland site that it reduced in August 2014. The Holyland Park company, owned by Polar (60%), Kardan NV (TASE: KRNV;AEX:KARD) (20%), and Bank Leumi (TASE: LUMI) (10%), which was the main loser from the decision to reduce the construction rights, is expected to benefit from the decision.
The Holyland affair, which began in 2010, included suspected bribery. Following the ensuing criminal investigation, the District Planning and Building Commission decided in April 2011 to reconsider the plan, only part of which had been carried out by that time.
Holyland Park acquired the rights to the site in late 1999, just five months after the National Planning and Building Commission approved the plan. The company relied on the rights approved when it made the deal. Before the affair became public, the company constructed eight buildings in 2000-2010 (seven buildings and a tower), and retained ownership of plots in the western part of the site for four additional buildings with a total of 254 housing units.
Last March, "Globes" reported in a major story that although the Supreme Court had acquitted Holyland Park and its officeholders on all charges in the Holyland affair, the District Planning and Building Commission had announced its intention of canceling the remaining 254 housing units slated for construction owned by the company, although it had purchased the land in good faith after the plan had been approved, and had so far built only some of the housing units slated for construction according to the rights purchased. The District Planning and Building Commission explained its decision to reduce the construction rights by saying that from a planning standpoint, the site had been planned as a closed, densely constructed neighborhood cut off from its surroundings, with a lack of public space. The plan selected by the District Planning and Building Commission replaced the 254 housing units with public space.
The company filed an objection to the cancelation of its rights by the District Planning and Building Commission, which itself had approved those rights in the 1990s, praising the plan, and none of the Commission members had been suspected of accepting a bribe. Holyland added that if the new plan were accepted it expected to receive an estimated NIS 500 million in compensation from the Jerusalem District Planning and Building Commission.
After hearing the objections, the District Planning and Building Commission decided against reducing the number of housing units approved for construction on the site. It explained its decision by saying that it had to balance the need to consider the public significance of the Holyland affair against the economic significance of canceling the approved rights. The Commission noted in this context that it rejected the claim that the purpose of the new plan was to punish the owners of rights in the site, and insisted that its considerations were purely planning issues. The District Planning and Building Commission explained that it had found that public needs could be met without eliminating the approved construction rights that had not yet been used.
Published by Globes [online], Israel business news - www.globes-online.com - on August 21, 2016
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