One of the most expensive tracts of land in Israel, on the Mediterranean coastline north of Tel Aviv, has become the subject of a legal dispute pitting two wealthy American-Jewish families against the Israeli property company Ashtrom Holdings.
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Ashtrom said it filed for arbitration last Thursday against the heirs of Joseph and Leonard Wilf and Sam and Arie Halpern, seeking more than 550 million shekels ($144 million) in damages in a dispute over rights to develop their 480 dunams (118 acres) of a larger site known as Turquoise Beach (Hof Hatchelet).
The first generation of Wilfs and Halperns were known as “Refugee Builders” – a group of Holocaust survivors who went on to develop property empires after arriving in America following World War II. They have also been major donors to the Yad Vashem Holocaust remembrance center and to Jerusalem’s Shaare Zedek Medical Center.
They also have business interests in Israel that include the Ramada Renaissance Hotel in Jerusalem and the Ramada in Tel Aviv, as well as two 17-story towers being erected in the capital’s King George Street at a cost of $150 million.
Turquoise Beach lies on a stretch of undeveloped shoreline between North Tel Aviv and Herzliya, boasting valuable seafront property and easy access to Tel Aviv by road and rail. The entire area of 2,100 dunams is close to receiving final planning approval, clearing the way for the development of some 12,500 apartments, as well as hotels and shopping centers on the site.
According to Ashtrom, the two families reached an agreement in 1993 to one day develop the land they owned, in something known as a “combination” deal: Both sides would invest jointly to develop the site, with Ashtrom serving as general contractor, and the sides splitting profits equally.
TheMarker wasn’t able to obtain a response from the two U.S. families, but Ashtrom said that when it approached the two families last March about putting the agreement into action, they responded by saying the talks that took place nearly 25 years ago never concluded with a binding agreement.
Ashtrom responded last week by opting to activate the arbitration clause in the agreement, demanding compensation for damages caused by the families not fulfilling the terms of the agreement, the company said in a statement to the Tel Aviv Stock Exchange last Thursday.
“[The company] is asking to activate the arbitration mechanism between it and the Wilf and Halpern families, in order to regulate the relationship in connection with development and infrastructure work, and construction on the site known as Turquoise Beach,” Ashtrom said.
Planning approval is slowly moving ahead for the beach site. After four decades of delays, the Herzliya Planning and Building Committee gave its go-ahead in 2013, and the applications are now with the district planning committee.
Other landowners on the site include the government’s Israel Land Authority, which holds about 500 dunams; Yitzhak Tshuva’s Elad Group, whose holdings are estimated at about 400 dunams; and a purchasing group led by Rabbi Mordechai Karlitz, which holds a smaller plot.