Eilat: Resort Mecca or a City Imploding?

It may look pretty but inside, there's rot. Its mayor dreams of doubling its size, but this remote desert town's residents may not be there to see it.

It is 4:30 in the morning in Tel Aviv's small domestic airport Sde Dov and already there's a line of Israelis waiting for the airport to open its gates. Dozens of people mill, mostly families with small children, mostly lower-middle class. They are waiting to board a small Arkia plane that will take them to Eilat, Israel's preeminent resort town, and to a coveted and frankly much-needed vacation in the sea and sun.

Eilat, with about 47,000 residents, is Israel's southernmost city, a small civilized enclave surrounded by the absolute biblical nothingness of the Negev Desert. In the early 1980s the government made Eilat a VAT-free zone, which in turn made the city the capital of Israeli vacationing.

At the northern tip of the Red Sea, Eilat has beautiful beaches and primal landscapes, lovely coral reefs, a scorching but reliable sun that always-always shines above and a vibrant nightlife. Over the years, because of remoteness, it also established itself as the ultimate escapist town, the town where people come to live to escape their problems, to reinvent themselves, not unlike Las Vegas (sans casinos). A sort of sanctuary in the desert.

But, like many resort towns, it also has tragedy running through it.

An aspiring rival to European Rivieras, its restaurants are given foreign-sounding names like "Chicago" or "Boston," its streets are named "Rue D'Antibes" and the like, its parks are given misleading titles such as "Royal Park" or "Park Avenue."

But most of its population makes just over minimum wage. Half its high-school students don't graduate. Thousands of African refugees fill the streets and the city features in the crime pages of newspapers almost as much as it is featured in their travel sections.

While its city planners seem to have wealthy international tourists In mind, the city's present clientele is largely blue-collar. The tourists are mostly average Israeli families with little to spend beyond what they already paid for the hotel, or rowdy packs of angst-free and alcohol-fueled teenagers heading down to Eilat to party their brains out, far away from their parents' watchful eyes.

"We're gonna P-A-R-T-E-Y! Get so drunk we're gonna bang our heads against the floor," a pimpled, bikini-clad teenager with a bag of booze under her arms boasts to her four friends as she leaves a supermarket near her hotel.

But walking around Eilat these days, the last days of summer, it's hard to find where the party's at. A shadow seems to hover over the city, despite the glossy veneer of tourist attractions. Walking along its boardwalks and hotel region is like walking through a scorching-hot cross of a tomb and a shopping mall.

Mall, we said? In fact, in an area no bigger than a square kilometer, there more than five shopping malls, a few shopping "boulevards" with faux-European street lights and cobblestone "streets" designed to give the whole thing a luxurious feel. Dozens if not hundreds of stores and restaurants cluster together. Most of them are empty, with not a shopper in sight.

More shops than tourists

At times, it seems Eilat has more shops than tourists, yet its hotels are currently running near-full capacity.

So where are all the tourists? At the beach, most likely, or in their hotels. Many of Eilat's sprawling, enormous, autarkic resorts have turned all-inclusive in the last few years, offering visitors three meals a day, entertainment and very few reasons to leave the poolside. Simultaneously, the city of Eilat has undergone a tremendous development boom that filled it with malls, shopping centers and stores, most of them branches of large national and international chains.

The city had a massive 125 square kilometers of commercial space and 11.3 square kilometers more under construction, including two vast shopping malls near the city's old and dilapidated (though still operational) airport. Plus – another 41 square kilometers have been approved for development and 71 square kilometers more are in planning stages.

All in all, Eilat will have 248 square kilometers of commercial space in four years - several times the national average.

It was always a shopping city, but now it seems it is a SHOPPING city, a theme park whose Theme with a capital T is consumer brands.

But the onslaught of brands and ritzy shopping malls has had a heavy economic toll. Many of Eilat's small business owners and restaurateurs are livid at the city's commercial boom, which they are not a part of. There is just too much competition for too small a pie, they say. No one, including the big chain-stores that have effectively killed its local economy, can make a profit.

Many speak of hardship. Most speak of imminent collapse.

Used to own the cafe, now work there for minimum wage

"Eilat is heading for a downfall," says Dani Lahav, head of the city's chamber of commerce. "A huge amount of business owners in the city are struggling to survive. And I'm talking about real, shame-inducing ruination. Many are on the verge of closing even before winter comes."

According to the city's chamber of commerce, sales at Eilat's malls have dropped 30%-40% in the past summer, despite 85% occupancy rates in the city's hotels. With the economy in trouble, 8% of its residents moved out in 2011, according to the Jerusalem Institute's Internal Immigration Index published this month.

Many of the city's business owners blame Eilat mayor Meir Yitzhak Halevi, a heavily-built Jerusalem native who has been leading the city for ten years.

Halevi is largely responsible for the city's development boom, and shows no intention of stopping. Instead of encouraging local businesses, they say, Halevi allowed big chain-stores to take over the city's commercial properties, built shopping malls complete with glitzy tourist attractions that diverted attentions from small businesses towards big multinational brands, and made it impossible for local Eilat business owners to compete. The residents of Eilat, they say, have only one choice nowadays: work at a chain cafe for minimum wage. Once, they grouse, they used to own the cafes.

Halevi, for his part, has no intention of slowing down the city's development. "I am a man of big dreams," he says, while mingling with constituents, friends and various sycophants at the opening night of the Red Sea Jazz festival, a yearly jazz festival held in Eilat this year for the 27th time.

He sums up his vision for the city simply: "We don't want to be a frontier town anymore," he says.

Death threats against the mayor

Halevi is a large man, son to Yemenite immigrants. In 2006, after he launched a program to end violence in Eilat, a grenade was thrown at his house and he had to have armed security men follow him around for two years. He is being followed by a security detail right now as well, following threats to his life by some of the old boardwalk's solicitors that he's been trying to kick out for nearly 10 years.

To say of Halevi's vision for the city that it is ambitious would be an understatement. It is so big it is grandiose, so absolutely fantastic it is hard not to deem it megalomaniacal. By 2030, he says, this isolated desert down of 47 thousand poor inhabitants, its economy nowadays completely composed of tourism and nothing more, will be a regional and international trade center, a sprawling metropolitan high-tech and high-cultured city, with more than 120,000 permanent residents, new convention centers and international exhibitions, and a booming tourism sector that will serve 7 million visitors per year.

To this end, a new international airport is being currently being build near the city, a rail will – for the first time in 64 years – will connect the city to the rest of Israel, and a new deepwater port – to be located at the edge of a canal to be dug near the Jordan border - will make it a regional trading hub. Halevi calls the plan "The Southern Gate." Its cost: 3-3.5 billion dollars. Not all parts of the program are up and running – the port still hasn't received final approval, the rail line is still being debated – but Halevi is more confident than ever. "Eilat" he says, "will be the fifth metropolis of Israel."

Maybe, but it's not sure the city's inhabitants can survive long enough to see Halevi's dream come true. Right now, many of them are barely holding on.

Eilat's ruined. Past tense

It is a midweek noon at the height of Israel's tourist season, yet the Icemall – one of the crown jewel's of Eilat's recent development: an enormous, elliptical shopping mall with a large ice skating rink in its middle – is nearly empty.

Hundreds of children should be here now, forcefully pulling their parents towards the rink. Parents with stressed faces should be coming in and out of stores, their hands heavy with multiplying shopping bags.

Instead, in one of the many cafes in the place, sitting all alone, is Ilan Pipson, a local Eilat celebrity, reading the paper in peace.

Pipson, a 52 year old well groomed marketing professional who starred in a documentary series about Eilat last year, is the son of a local Eilat legend. He was born in the city, grew up in Tel Aviv, and came back after his army service. He has intimate knowledge of the state many businessmen in Eilat find themselves these days, and his conclusion is simple and painful: "Eilat already collapsed, you just don't see it," he says, "but let me be clear: The story of Eilat is pretty much finished."

Pipson is prone to parables and metaphors. Asked to describe the state of businesses in Eilat, he recites a verse from an old song by Israeli song writer Yoram Taharlev :"In our narrow street a strange carpenter lives, sits in his shed and does nothing."

"Eilat used to be a small lake, with little food," he says, "but then, about 12-13 years ago, a shark came by these waters, saw there was some food and told the entire ocean. Then everybody followed."

The city has limitations that people just don't get, Pipson avers. "The nearest place is over 200 kilometers away. We're a small, isolated island. We are not Tel Aviv. We are a development town with a beach."

When he speaks of Eilat's current state, Pipson keeps using past tense. Collapsed. Finished. Ruined. The fact that you can't see the damage, can't see the collapse, hardly bothers him.

"You won't see it. You won't feel it. You never see the injured person being treated in the hospital after a car wreck. They clean up the glass and the metal and everything looks fine, but it's not fine. Likewise, you don't see the person sitting with his bank manager or in bankruptcy court thinking 'how am I going to reduce my debt?'. And I am telling you there are very few businesses here that aren't in awful state."

The city should have been owned by its people, says Pipson. "The chains, their money doesn't stay in Eilat. It goes to Tel Aviv or abroad or whatever. The Eilatis don't share the wealth. If it was up to me," he says and leans close, "I would have filled the entire city with stands and give them to the Eilat residents. One will sell shoes, another will sell cosmetics. That's my war against all the Tel Avivian pigs and the big chains."

Yet Halevi, whose up for reelection in October, remains confident in his goal to double the city's population.

"When I came here, 35 years ago, it had 15,000 residents. Now it has 47,000. Ordinary politicians want short term achievements, but I have my plans are long term. Eilat can be a sustainable city, a city with exciting economic life, that speaks another language of tourism, that creates employment that isn't tourism –based."

Not all believe Eilat to be imploding. For some, it remains the city of perpetual leisure. David, a scruffy-looking French Jew who works at one of the restaurants in Eilat's beaches, made aliyah with his wife and two children a year and a half ago, and he is happy with the choice he made. He loves Eilat's punishing, dry heat, he lives the coldness of its sea water, he loves the people he met. In fact, it's hard for him to think of something he doesn't love about the city. "Paris? I would never go back to live in Paris," he says, "France is bad for the Jews."

Eliyahu Hershkovitz