PM Office encourages Ikea to open in Lod

The home furniture chain was promised NIS 3-4 million in aid.

At a meeting held on October 16, 2005 (parallel to IKEA Israel's negotiations with the Rishon LeZion municipality), with the then mayor of Lod Benny Regev, Avishai Cohen, then head of the PMO Division for Coordination, Follow-Up and Control, said the state would give the project a "green track," and that "it would not be a problem for the division to attend to the necessary business with the Ministries of Interior an Industry, Trade and Labor regarding the Investment Promotion Center and discounts for superstores."

Cohen also declared at the meeting that, "beyond that, we will, as a rule, be on your side." He went on to say that the PMO could not be of help with regard to discounts to employers since these are usually given only in frontline regions, but suggested a way round this. "We’ll find a special way in which to help a project of this scale. Instead of giving grants, the municipality will receive a one-time budget for infrastructures of NIS 3-4 million."

A spokesperson for the PMO said in response, "During the term of Prime Minister Ariel Sharon the Prime Minister's office gave top priority to assisting in the development of Lod because of its unique status as a city with a mixed population in central Israel, and this policy remains in effect today. We are unable to make any direct comment beyond this on the "Globes" report, since we were not given any prior notice of your request."

A spokesperson for Ikea Israel said, "We have received and continue to receive requests from many government representatives and mayors asking that we open an Ikea store in their cities, because they realize that an Ikea store creates countless employment opportunities, helps neighboring businesses thrive, and upgrades the image of every city it operates in."

Ikea Israel's plans to open a superstore in Rishon LeZion were dealt a crucial blow just over two months ago, when the Tel Aviv Court for Administrative Affairs voided the permits for extraordinary use that the Rishon LeZion municipality granted to both IKEA and Gazit Israel for the Maayan Soreq lots. The company suffered a further legal setback earlier this week when Tel Aviv District Court Judge Nurit Ahituv ruled the Rishon LeZion Municipality discriminated in IKEA's favor by granting preferred obligations and financial conditions when gave it planning permission on the lot.

Published by Globes [online], Israel business news - www.globes.co.il - on December 27, 2007

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