"In five months I lost NIS 30,000," says Haim Roich, comparing his revenues this year with the same period of 2008. "Up and down the street there are hundreds of businesses, and these renovations are costing them a fortune." Roich, owner of the "bread boutique" La Paneria on Ibn Gvirol Street in Tel Aviv, is thoroughly fed up.
For three years the Tel Aviv municipality has been fixing up the street. The work is a nuisance for pedestrians and drivers, but for businesses, it's a disaster. As if the economic troubles weren't bad enough, businesses have to deal with traffic jams, noise, holes in the ground right outside their door, and dirt, all of which deter buyers.
"We were told that the renovations would be over by the holidays. That didn't happen. I asked the city to at least give us a break on arnona [city taxes]," says Roich.
"But they said they couldn't give us relief on taxes because that's a matter for the Interior Ministry. During the last five months they made a huge mess, but they were only working in practice for about 20 days. If I weren't a wealthy man, the business would have collapsed. We defer checks and use our credit line to the maximum. I'm a person who used to pay everything up front in cash but today I'm out of choices."
Once the work is over, the residents and businesses along Ibn Gvirol should have a gorgeous boulevard with wide sidewalks, state-of-the art lighting, bicycle paths, trees and various other upgrades to the standard of living. But in the meantime, businesses complain that their revenues have been decimated.
"The turnover of the food businesses such as the restaurants and cafes has fallen by 50%. The fashion and other stores have lost 25% to 35% of their business," says Haim Kaufman, 40 years a property broker and a former chairman of Maldan, a realtor organization. "There isn't a single business that hasn't been hurt, and traffic on the street has fallen drastically because of the unbearable traffic jams."
Kaufman argues that "everywhere else in the world," when streets are reconstructed in long-term projects, the businesses get a break on municipal taxes. The city fathers understand that the businesses are hurting.
"The businesses did contact city hall, but were turned down. Not a single thing has been done so far. It's a scandal," he says. "And if it wasn't bad enough that their turnover has dropped by 50%, they have to spend tens of thousands of shekels on replacing their signs to meet the new standards that the city demands."
Having instituted city inspections 24 hours a day, the new standards for signs are just the city's latest way to extort money, Kaufman claims. "A few months ago we organized a group of businessmen and met with the deputy mayor to talk about the signs. But nothing came of it," he says.
Three years ago he installed a new awning at a cost of NIS 100,000 that was supposed to do the job for 10 years, complains Tomer Goldberg, owner of Horkanos Cafe. Now he has to put up a new one following the work right by his eatery, and the city isn't cutting him any slack. In his view, it's pure inconsiderateness, and he hates the uniformity the city is trying to institute: "It ruins the unique character of each business."
Since the makeover reached his part of the street, sales have suffered particularly on the days the work is being carried out, says Goldberg. Beyond the noise of the heavy machinery, the dirt and the traffic congestion, there's no parking. The city offers no solutions, he says.
Moreover, the contractor fixing up the street has scattered his attention to a number of spots along Ibn Gvirol, rather than picking a spot, redoing it quickly and moving on. The result is that the pace of work is sluggish. "I don't know much about construction, but I do know that if I had to fix up my store, I'd do it a lot faster," Goldberg says.
It isn't that he objects to the street's makeover; not at all. "I think the street will look better after the renovation," Goldberg says. It's the interim period that's hard, just like when people redo their home. "I'm trying to be more creative. We're expanding our takeaway service and offering a new menu, hoping that the investment returns itself in the future."
The designer Efrata, who has a small store in the part of Ibn Gvirol that's already been repaired, says she had been prepared for a sharp drop in sales. "We knew the renovation was coming. So I gave more discounts and held special sales," she says.
"As it was, there was no parking along the street. I'm a realist and I took that into account. We do the most we can for people to be satisfied, whether it's through special sales or discounts, keeping an eye on their car, sending SMS messages about sales, and so on."
Tel Aviv, for its part, explains that the renovations are taking so long because it's hard to fix up the street as a single unit. The work has to be done in segments. It is striving to minimize the damage to businesses, it says.
The business owners are not appeased.
Realtor Kaufman, for instance, notes that some of the segments have been done more than once. "Nothing the city told us proved accurate," he says. "For instance, they said the renovations of each segment would take three months. Then they said the first segments they did took longer because the contractor wasn't experienced, and since then he's learned the job. All stuff and nonsense - there's nobody to talk with at city hall."
Ilan Bombach, a lawyer and formerly the head of the Tel Aviv chapter of the bar association, agrees with the business people that the city has not done its duty. He says the law recognizes that the city must "treat the businesses reasonably, not negligently, and to compensate them when it causes them damage by its negligence. The Supreme Court said on several occasions that you can't impose all the city's development costs on businesses, which is why there is a principle of everyone sharing the damage."
The city is an arm of government and is supposed to treat residents with fairness and good faith, Bombach says. "Therefore, it has a special responsibility." The city should have been more accurate about the time the work would take, to let businesses prepare. In any case, he adds, the city should investigate the delays. Did the contractor have enough manpower? Did the city do everything to minimize the damage?
Should the businesses along Ibn Gvirol sue the city?
"Several times the court has recognized the duty to compensate for damage caused by the authorities," Bombach answers.
Trying to be considerate
The renovation could have been done in six months instead of four years, says Tel Aviv spokesman Hillel Partok. But the municipality chose the harder path of renovations in segments, 10 segments - and the renovation of each takes two to three months. He notes that at any given time the city was working on one lane of the road, leaving two open, which made the job a lot harder.
The result has been an extra cost of NIS 150 million to the city and a longer process, but the very thing the city was trying to achieve was to minimize the pain.
Regarding the claims of harm to businesses, Partok says he isn't aware of the complaints and adds that the city is very proud of the street's new look.
Ezra Naveh, director of complex projects at the city's construction and infrastructure department, also responds to the businesses' plaints. Regarding the length of the work, he points out that before starting a new segment, the city talks with the business owners along it. They inquire which hours are the most convenient for the work and try to be considerate, Naveh says. Digging in front of a store won't last more than three days, and the city makes sure access to the store is never impeded. The street, in short, continues to function throughout.
"Ibn Gvirol has 300 stores, and for each segment we set a time frame. To the best of my recollection, we have not deviated from these time frames," Naveh says.
As for the complaints about signs and awnings, he says the city isn't only fixing up the street, but its look.
And why didn't the businesses at least get a discount on city taxes during the renovation? Kaufman says the average tax rate for Ibn Gvirol's stores is NIS 26 per square meter a month. The average business pays a few hundred shekels each month, and in any case the city isn't empowered to give discounts. The city's attitude is that it didn't give discounts during the work and won't raise the tax rate afterward, when the stores can be expected to do much better.
Recovery will take time, though: Businesses along segments where the work is done complain they don't feel the improvement. Meanwhile, certain parliamentarians including Stas Misezhnikov and Alex Miller are promoting a bill to force cities to cut tax rates for businesses during road work of this sort. Even if their idea is enacted into law, though, it will come too late for the business people of Ibn Gvirol.