French-Jewish businessperson Laurent Levy recent bought several lots totaling 100 dunam (25 acres) on the Migdal shore of Lake Kinneret (Sea of Galilee). There is already an approved plan for construction of 800-1,000 hotel rooms on the land, with each hotel expected to contain 250 rooms. The lots acquired by Levy account for one third of the 3,000 hotel rooms planned on the Migdal shore.
Levy, who plans to invest hundreds of millions of shekels in building the hotels, declined to be interviewed, but the Ministry of Tourism confirmed that it was already in contact with him concerning the construction of a 600-room vacation village. One of the hot rumors in the hotel market is that Levy is already negotiating with the Club Med international hotel chain to construct a vacation village on the shore. In any case, whether these negotiations will produce a binding agreement is unknown.
The town of Migdal, located northwest of Tiberias, has 600 households and 2,000 residents earning their living from agriculture, with an emphasis on olives and mango. Tourism is growing. Migdal Local Council head Israel Amrosi says, "Migdal has 150 guest rooms and another 150 planned." The council's jurisdiction includes a 2.5-kilometers strip on the Kinneret beach, most of which is privately owned land zoned partly for agriculture and partly for hotels. "There is an approved urban building plan for building 3,000 hotel rooms and a shopping center," Amrosi explains. "The urban building plan was declared valid in 1998, but the intifada broke out immediately after it was approved, and tourism continually diminished. Today, the situation is different, and tourism is reawakening."
In 2000, before a law was passed restricting beach construction to a distance of 300 meters from the waterline, the Ministry of Tourism published an architectural tender for planning the shore, won by architect Matityahu Avshalomov. The tender stipulated that construction would take place at a considerable distance from the shoreline in order to keep the beaches accessible to the public.
Two hotels currently under construction on the Migdal shore are scheduled to open in 2018. The 150-room Magadala Hotel, now being built by Ark New Gate, a company owned by the Mexican Church, is in the advanced construction stages. A visitors center has already been built next to the hotel, after archeological remains of a Second Temple period synagogue were found during the excavations and construction work on the hotel. The synagogue contains a mosaic floor with an engraved seven-branch candelabra. Ironically, the synagogue was discovered by Christian pilgrims.
Another hotel, the 200-room Sea of Galilee, is being built by developer Avihu Tal, owner of the Restel Hotel in Tiberias. The Ministry of Tourism has approved a NIS 15 million grant for the two hotels, amounting to 20% of the investment.
The remaining area along the shore is held by private landowners, whom Levy is contacting one by one. As of now, he already owns a large proportion of the shore hotel rights, and is also negotiating with the Ministry of Tourism to obtain reimbursement for his investment.
Amrosi says, "In the section of the shore zoned for hotels, Levy bought in a rather short time several plots with a total of nearly 100 dunam. Within the span of a few years, the Migdal shore is becoming the leading tourist area in the Galilee, located between Nazareth and Tiberias, next to Kfar Nahum and the Mount of Beatitudes. We are now paving a NIS 20 million road that will connect all the planned hotels. We believe that in addition to Levy, addition owners of lots along the shore will utilize the building rights."
Levy immigrated to Israel in 2005, and settled in Jerusalem with his family. His name was previously linked to the purchase of dozens of apartments for investment in the most expensive areas of Jerusalem. Levy, who is religiously observant, was accused of religious coercion in 2013 when he ordered the Jerusalem Resto-Bar, located in a building he bought, to become a kosher restaurant, and to close down on the Sabbath.
Levy became wealthy not in the real estate sector, but in optics. A trained optometrist, Levy owns the Optical Center chain, which has over 300 branches in France, Belgium, Switzerland, Spain, and Luxembourg (the chain's first two branches in Jerusalem were opened in 2015). Levy himself is quite spiritual man, whose official website displays a diverse vision ranging from eating chocolate ("I eat chocolate every day without any limits") to love of soccer to unity of the world's peoples.
Levy is a great believer in the power of music and its influence on people ("nothing is more exalted than music, because it is beyond our understanding"). Last year, he opened the Jewish Music Museum in the Nahalat Shiva area in central Jerusalem. Nearby it, at 25 Hillel Street, he says he will open the 70-room Music Hotel in 2020, "which will be designed in a disposable art deco style. The interior decoration of each room will be based on different musical themes and styles."
He says that Optical Center has started a department that distributes thousands of eyeglasses and hearing aids to the needy.
Not all is rosy on the Kinneret shore, however. The difficulty in carrying out a plan approved 20 years ago lies not only in the security situation in Israel mentioned by Amrosi, but also in the problem of infrastructure. Like the housing sector, which suffers from lagging infrastructure construction to support neighborhoods, the hotel sector in Migdal is also not immune to the problem.
"Our big challenge is to build tourist infrastructure in Migdal," says Ministry of Tourism director general Amir Halevy. "The two hotels being built in Migdal are almost ready. The Sea of Galilee Hotel can open before next Passover; it already has a sample room ready. What is delaying it is an access road to the hotel. I hope that the local council keeps its word and finishes paving the road. Avihu Tal is a classic developer who made the most difficult decisions in Operation Protective Edge, and went ahead with construction, which he paid for all by himself."
Tal himself sounds worried. "Infrastructure work on the shore has begun, but very late. I barely sleep at night out of worry that I won't be able to open the hotel on time, because infrastructure work is an essential condition for occupancy in the hotel. You have to realize that a hotel can't begin looking for guests on opening day; it needs reservations. In the Migdal area, most tourism is groups of pilgrims, and this is a group that works with reservations made 6-12 months in advance. There's not even an Internet connection, because the infrastructure doesn't exist.
"In addition, even though there has been a valid urban building plan for thousands of hotel rooms for 20 years already, every section is being hampered by a jungle of high thick tamarisk trees blocking access to the lake. The trees have grown on a strip that dried out to a depth of 150 meters. Israel has decided that this section will consist of hotels, but no preparations have been made for this. It's real idiocy."
Halevy mentioned the inherent difficult of implementing plans in the jurisdiction of small local authorities that are not prosperous. "It's obvious that construction of 3,000 hotel rooms can't rely on the existing infrastructure. Developers are liable to find themselves at the conclusion of construction, but stuck without a road. Migdal is doing all it can and more to help, but it is a small local council with little money. The Ministry of Tourism is supporting hotels with grants, and we'll soon establish a Kinneret council and association of towns to help the developers."
Another difficult faced by the hoteliers is the low level of Lake Kinneret, which makes the waterline more distant from the hotels.
Halevy says, "Where the water level is falling, high reeds sprout up immediately on the exposed land and conceal the view of the water. Absurdly, a developer who bought land to build a hotel with the winning card of a view of the Kinneret finds himself with land from which you can't see the water because of the vegetation."
At the same time, the Ministry of Tourism is in the advanced stages of planning a Migdal promenade of modest dimensions in order to avoid damaging the natural environment on the site.
"Day tourism does not cause growth"
The need for more hotel rooms for pilgrim tourism in area of Migdal and Lake Kinneret has existed for a long time. According to District Planning and Building Commission chairperson Uri Ilan, Lake Kinneret's tourism and economic potential is far from being realized. "Although it is taking time to carry out the plans, they are correct in essence. They looked for places around the Kinneret close to existing communities, such as Tiberias and Migdal, in order to develop tourism facilities that would realize the Kinneret's tourism and economic potential, which as of now has not been fully realized," he says.
Ilan emphasizes that one of the reasons why the development of the Migdal shore is beginning now is the help that the Ministry of Tourism is providing to the local council for promoting development, while the permits for the roads being paved in the area were issued only recently.
Ilan adds, "Tourism is an enormous growth engine for the north in general, and for the cities of Akko, Nazareth, Tiberias, and Lake Kinneret in particular. One of our goals is to create overnights close to these tourist areas, because from an economic perspective, every tourist overnight greatly increases the area's turnover. Day tourism does not cause economic growth."
The return of the Club Med chain to Israel, after its branches in Eilat and Achziv were closed down years ago, is likely to be really good news for the tourism industry. Halevy commented on this, saying, "The Club Med chain has been looking for suitable lots to return to Israel for a long time, and we're glad about that. We have set up a special unit to locate international hotel companies in order to expand their activity and also help solve the shortage of hotel rooms in Israel."
Published by Globes [online], Israel Business News - www.globes-online.com - on December 26, 2017
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