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Parking lot purchase could spike Kikar Atarim towers plan

  • July 21, 2021

It’s hard to exaggerate the real estate drama generated by the news this week that Sefi Tzvieli had won the auction of the underground parking lot at Kikar Atarim in Tel Aviv. Tzvieli will pay NIS 257 million to the Tel Aviv Municipality, in addition to NIS 84 million that he will pay the JLTV fund for its 27% share of the parking lot. Besides the business significance of the deal, the drama mainly lies in the fact that a businessperson decides to pay a very high price for a real estate asset with the aim of thwarting another plan: Tzvieli is known as one of the most prominent objectors to the plan to construct towers on Kikar Atarim. There is no precedent for a situation in which a plan that has been promoted for years at a cost of millions of shekels, involving a multi-directional creative effort, with the cooperation of the municipality and the planning administration, should melt away overnight and disappear.

Kikar Atarim extends over 27 dunams (6.75 acres), with buildings erected in the 1970s on several levels, including an underground parking lot, a fuel station, roofed shopping levels, and a public pedestrian plaza. Pedestrian access to the plaza is via a ramp from Ben Gurion Boulevard that blocks the view of the sea from the direction of the boulevard. For many years, the site has been in a rundown physical condition, with areas abandoned and shuttered. The owners of the rights in the site were the Tel Aviv Municipality, Atarim Ltd., and several private owners.

The saga of the renewal of Kikar Atarim began ten years ago when a company called Idit Properties Management Ltd. (JTLV) bought all the assets on the site apart from the parking lot which was owned in partnership with JTLV. The partners promoted the deal with the aim of realizing a project consisting of prestige residences, and commercial and hotel space. JTLV reached an understanding for the sale of the Tel Aviv Municipality’s share in the parking lot for NIS 150 million, and in 2017 the city council approved the deal.

The original plan, by noted British architect Norman Foster, proposed the demolition of the exiting square and its buildings, and the construction of four towers, two of them of 26 floors, one of 31 floors, and one of 36 floors. The plan included 80,000 square meters of hotel and residential space, 4,000 square meters of public space, commercial space and ten dunams (2.5 acres) of open areas.

In 2018, following a protest by the “No Towers on Kikar Atarim” association, the District Court decided to return the plan for discussion in the Committee for the Protection of the Coastal Environment. In June 2018, the committee approved a plan for two 25-floor towers.

In late 2019, the Tel Aviv Municipality held a public participation conference in which all sides were allowed to express their views on the plan. JTLV’s representatives expressed their desire to advance the plan as agreed with the city engineering administration. The plan’s opponents argued that it meant a critical blow to the public, to the skyline, and to access to the sea.

Tzieli petitioned the Tel Aviv District Court in 2018, claiming that the deal for the sale of the Tel Aviv Municipality’s share in the parking lot was improper and that the municipality had a duty to hold a public auction. The court decided in his favor, a decision later upheld by the Supreme Court. In May this year, a tender was published with a minimum price of NIS 184.5 million on the basis of an appraiser’s opinion, which raises the question why an experienced businessperson like Tzvieli paid NIS 73 million more.

Tzvieli’s decision to buy the underground parking lot largely frustrates the construction project planned for the site.

JTLV said in the past that planning of the Kikar Atarim project was at an advanced stage and that the sale of the parking lot, which belonged to all the investors, would not affect it. It even said that if it did not win the auction, it would have an additional partner. That being the case, the win by Tzieli, the most forceful objector to the towers project, wrecks the plans. Not only that, but the owner of the parking lot has 12% of the general building rights, which will make it even harder to proceed with the project. JTLV will probably not cooperate with Tzvieli.

The Tel Aviv Municipality insists that the purchase of the parking lot by Tzvieli has no real significance, and that the construction plan will go ahead. Sources at the JTLV fund told “Globes” that the high price paid by Tzvieli for the parking lot made the fund’s management realize that the towers project was not economically viable in its current format.

Tzvieli now has several possibilities open to him. He could suffice with the currently applicable urban building plan, which allows 27,000 square meters of built space. In practice, this would mean adding a few floors to the Marina Hotel on the site. Another possibility is to support the towers plan, but to demand a more moderate design, with two 25-floor towers, but with land cover of 1,200 or 1,000 square meters instead of 1,400 square meters.

Published by Globes, Israel business news – en.globes.co.il – on July 21, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021


Article source: https://en.globes.co.il/en/article-1001379051#utm_source=RSS

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