Leviev stuck on Jerusalem plans

Real estate company Africa Israel has faced a lot of troubles recently, and one of the biggest is in Jerusalem.

Lev Leviev's firm is now building six projects in the capital, in which it has invested over NIS 500 million, but has not managed to finish or sell them. The new mayor Nir Barkat and city administration have been creating problems for Africa Israel. City hall is not willing to rubber-stamp every building plan presented, and has been demanding that developers moderate their plans.

In recent years Africa Israel has bought land in Jerusalem, putting its faith in what was a rapidly expanding real estate market with prices climbing. It also put its faith in the previous, ultra-Orthodox mayor, Uri Lupolianski. The former mayor had appointed Leviev to head his economic team for developing the capital.

In addition, two senior city council members who also served as deputy mayors also happened to be Africa Israel board members: Shmuel Shkedy, the deputy head of the municipal planning commission and Eli Simchayof, chairman of the municipality's finance committee. The chairman of the municipal planning commission under Lupolianski, Yehoshua Pollak, also worked actively to help real estate developers.

Africa Israel bought land, some of which was not for designated for residential construction, and began to advance plans to build about 1,000 housing units and various commercial and shopping areas in the city, hoping to gain the support of the municipality in changing the zoning and planning restrictions. However, of the six large projects, Africa has yet to receive approval for even one.

Jerusalem developers claim the new mayor and city council have reversed the previous policy. The new municipal coalition includes the Green Front, whose leader, Naomi Tzur, has replaced Pollak at the head of the city's planning commission. She is considered a major figure behind the halt in new projects.

Tzur ran the Jerusalem branch of the Society for the Protection of Nature in Israel for the past 12 years, and led the green organizations' fight against the "Safdie plan" to expand Jerusalem westward. This new policy against expansion is what dictates Barkat's plans, and Africa Israel has discovered that its previous plans and projects are no longer profitable.

In addition, over the past few months the banks have been making life difficult for real estate developers in general, as the banks have been very cautious about approving credit for development projects that seem to be stuck.

A spokesperson for Africa Israel Residences, the company's Israeli residential arm, said: "We have received the city's decisions, we are studying them and will act appropriately."

Among Africa's projects in the capital which are stuck are: 100 units in a nine-story building on Hanevi'im Street, which includes a pool, spa and stores. So far Africa has invested NIS 130 million in this project. The company sold 12 apartments in the project, but canceled all the sales and returned the money. Now the the company is considering turning it into a boutique hotel.

The firm has put NIS 139 million into a 400-unit project in the Arnona neighborhood in south Jerusalem, which includes buildings of 10 to 22 storys, a park and a shopping center. The company has nevertheless submitted its request for building permits as it is still in a dispute with the city over development plans.

In Romema, near the western entrance to the city, Africa has invested NIS 93 million in five buildings with 150-180 units. The regional planning commission decided two weeks ago to freeze building on 40% of the land, and that is likely to render the entire project economically unfeasible.

Africa invested another NIS 64 million in four buildings with about 500 apartments in the city center on Harav Kook Street. There are still no building permits as the site was zoned for hotels, with only a limited number of residences and shops.

In addition, the company invested NIS 52 million in a project in the Rehavia neighborhood, and in December the local planning commission rejected the request to rezone it from hotels to residences. Africa's entire plan for the project was turned down.