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It was tough to find a Jerusalem resident yesterday who was surprised by the investigation of alleged irregularities involved in the Holyland upscale apartment development. The project, known as "the Monster on the Hill," is considered one of the most hated in the city, and rumors have circulated for years that such a crazy building project could not have come to fruition without corruption.

An aide to former mayor Teddy Kollek, Rafi Dabra, who was one of the leaders in the fight against the project, said "there were suspicions all the time."

The project is built on a hill that used to be the site of the Holyland Hotel near the Ramat Sharett neighborhood. The developers of the apartment project received unusual building permits that allowed them to build high-rise apartment towers over an especially large area at a time when there were almost no high-rise buildings in the city. Jerusalem residents have paid the price in the large scar that disfigures the city's landscape.

The local Planning and Building Committee came to the aid of the owner of the land, Hillel Charney, who has been arrested in the case. In 2006, two months after it approved a change in zoning on the land from hotel to residential construction, thereby increasing its value, the businessman sold the property to developers represented by Uri Messer for at least $30.5 million.

The original plans for the property, which had been approved in 1999, called for the site to be divided into two parcels. The Holyland Tower apartment building, owned by the Holyland Park firm, a subsidiary of Polar Investments and Kardan, was developed first, on the southern part of the plot. The northern parcel was to have featured two hotel towers and the model of ancient Jerusalem that was ultimately moved to the Israel Museum.

In 2003, after several terror attacks in the capital, tourism plummeted and construction of a hotel was considered unprofitable. The Holyland Tourism firm that Charney controlled then submitted a revised plan calling for four residential towers, two with 67 units each and the other two with 43 apartments in each building.

City residents filed more than 300 objections to the proposal, contending that it would create traffic and parking problems and mar the landscape. The developers, however, ultimately won over the two leading activists against the plan through generous offers of compensation.