Ocif and Elite consider joining forces to build 70-story tower
Ocif Investments and Development, which is controlled by Doron Aviv, is negotiating with Elite for the joint construction of a housing and commercial project on the site of Elite's Ramat Gan compound. The proposed 70-story tower will cost an estimated $150 million.
Building plans for the land adjacent to Elite's factory at the corner of Jabotinsky and Arlosoroff streets in Ramat Gan include a 5-story underground parking lot for 1,000 cars and a tower for either residential or office use. The plans, prepared by Amav Planning -A. Niv-A. Schwartz Architects, are currently awaiting review and approval by the regional planning and building committee.
The developers hope to advance the project, most of which will be residential. A few floors will be used for offices and the ground floor will include commercial space. The plans also include the construction of a 4-story public building covering 3,000 square meters (32,400 square feet), which will be built at the developer's expense and a 2-dunam (half-acre) public garden on the south side of Arlosoroff Street, on land currently being used as a parking lot. Elite's old factory will become a museum.
The two companies will share ownership of the project equally and Ocif is expected to pay Elite some $15 million for the rights to 50 percent of the project. Aviv, the private construction company owned by the Aviv family (the controlling shareholders in Ocif), will probably handle the construction of the project. Aviv builds all of Ocif's projects under the cost plus system, meaning that the publicly-traded Ocif pays Aviv for the cost of the construction plus an accepted profit margin.
Ocif built the Moshe Aviv Tower in the Diamond Exchange complex in Ramat Gan on the other side of Jabotinsky Street. That building is also 70 stories high. As of the end of September, Ocif's share of contracts signed with purchasers of space in the tower (which includes residential apartments, offices, stores and commercial and storage space) totaled some 34,000 square meters (367,000 square feet), for about NIS 411 million.
In the first nine months of 2002 Ocif lost NIS 25 million, similar to its losses for the parallel period in 2001. These losses are caused partially by the fact that Ocif has some huge projects that to a certain extent distort the financial reports. Most of the revenues from the tower have not yet been recorded in the reports even though the whole tower has been sold, while the expenses for the tower, including heavy outlays on financing, have been recorded.
Ocif is trading on the Tel Aviv Stock Exchange according to a market value of NIS 98 million, although its equity is NIS 293 million. In July 2002 Ocif sold two buildings in a project at Ichilov Hospital in Tel Aviv for NIS 166 million. That project is expected to be completed within two years.