The Ministry of Finance and the Rothschild Caesarea Foundation have reached agreement on the financial disputes between them. Under the agreement, the validity of the agreement between the state and the Foundation will be extended for 10 years in return for a NIS 700-800 million transfer from the Foundation to institutions of higher education, mainly in outlying areas - probably to the medical faculty in Tzfat. It was also agreed that the dispute between the parties about the amount of debt for leasing and revenue from marketing of the Foundation's land, believed to be somewhere between tens of millions and hundreds of millions of shekels would be settled by arbitration and hundreds of apartments on the Foundation's land would be marketed in as part of the buyer fixed price project.
The agreement is a very significant achievement for the Foundation. Under the agreement, the Foundation's franchise, which was due to expire in 2022, will be extended until 2032 and the legal proceedings against the Foundation by the Israel Tax Authority will be suspended. At the same time, despite the agreements with the state, the Foundation is not conceding a single one of its claims, especially its alleged entitlement to a full tax exemption anchored in law. The main achievements for the Ministry of Finance and Minister of Finance Moshe Kahlon are the release of large sums of money by the Foundation for the benefit of higher education and the freeing up of land for construction under the buyer fixed price plan.
The Rothschild Caesarea Foundation was founded by the state of Israel and the Rothschild family in a 1962 agreement. The agreement states that the Foundation's profits will be used for the development of higher education in Israel. The Foundation was given leasing and ownership rights to 30,000 dunam (7,500 acres) in the Caesarea area and ownership of the Caesarea Development Corporation for this purpose. Another subsidiary named the Caesarea Assets Corporation was later founded. Then-Minister of Finance Levi Eshkol granted the Foundation a complete tax exemption, which was canceled early in the first decade of the 21st century. In 1989, the agreement between the state and the Rothschild family was extended until 2022, this time by then-Minister of Finance Shimon Peres. The Foundation asserts that Peres promised at that time that the state would enact legislation establishing the Foundation's tax exemption.
Public criticism of the Foundation grew after it was learned that it was contributing negligible amounts in comparison with its income from marketing land for construction of private homes for wealthy people in the Caesarea area. One of these homes was purchased by Prime Minister Benjamin Netanyahu and his wife. Despite the fact that the Foundation is half government-owned (50%), it refuses to disclose financial data about its activities. The most up-to-date reports about the Foundation appearing on the Government Companies Authority date to 2010.
Slightly more up-to-date figures were revealed in the State Comptroller's reports on the Foundation. Caesarea includes residential neighborhoods, sports and leisure sites, an industrial zone, and agricultural areas. In mid-2011, 4,700 people lives in Caesarea. According to the Foundation's figures, it had 12,800 dunam (3,200 acres) of available land in early 2011, including 286 dunam (71.5 acres) of residences, and 11,180 dunam (2,795 acres) of agricultural land. In 2010, the Foundation had NIS 476 million in cash, while contributing only NIS 21 million that year.
The State Comptroller's three reports cited faults in the state's conduct with respect to the Foundation. In his report for 2011, the State Comptroller wrote that non-use of the Foundation's cash surpluses and its accumulation of financial assets was not contributing to achievement of the public goals for the sake of which the Foundation was created - promotion of higher education. As the representative of the state in the Foundation's ownership, it was the minister of finance's duty to be aware of that fact, but he had not seen fit to state the need to designate the surplus funds for achieving the Foundation's goals.
Published by Globes [online], Israel business news - www.globes-online.com - on June 20, 2018
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