American Owners of Luxury Jerusalem Property Benefit From Ties to Netanyahu Bureau

Property developers in adjacent lot say city won't act against property scofflaws.

Nimrod Bousso
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Nimrod Bousso

When brothers Eyal and Oded Baruch, property developers from central Israel, complained more than two years ago about building violations on a lot adjacent to one they owned in Jerusalem, they never imagined what would come next. Which is nothing. The city did nothing to address the issue, beyond agreeing that the Baruchs’ neighbor had encroached on their private property as well as on public land.

The city’s legal department, which is headed by attorney Amnon Merhav, recently decided to close the case. Its answers to the Baruchs’ questions on the matter have been vague and occasionally even contradictory.

The structure in question is a luxury apartment building at 10 Brenner St., in the capital’s tony Talbieh neighborhood. Its transformation from a two-story tenement owned by the Amidar Public Housing Authority was completed in 2011, by developers Arthur and Michael Fried, also brothers.

Both are wealthy American Jews who mainly live abroad. Arthur Fried, a former chairman of the Jewish philanthropy the AVI CHAI Foundation, is deeply involved in cultural life in the city. His son-in-law, Eyal Haimovsky, was VP Business Development of the Jerusalem Development Authority from 2007 to 2009, when the alleged building violations occurred. Haimovsky now heads the Prime Minister’s Bureau. The project’s architect was Amazia Aaronson, who often works on projects for the municipality.

In the early 1970s the Baruchs’ father, together with a friend, purchased an adjacent plot, on the corner of Sokolov Street. It is about 100 meters from the prime minister’s official residence, on Balfour Street.

Eyal Baruch says that even back then, the simple chain-link fence between the two lots was actually on his family’s side of the property line, but his father took no action.

In the early 2000s Talbeia Properties, a company established by attorney Ran Fleischer, purchased the property at 10 Brenner St., consisting of the Amidar building and the 828-square-meter lot it sat on.

In 2005, Michael and Arthur Fried bought 90% of Talbeia Properties as part of a deal to combine plots of land. Aaronson began designing a two-story addition to the old apartment building as well as parking space and a perimeter wall with facilities for garbage bins and a storage tank for heating oil.

The end result was a five-unit luxury apartment building. But although the renovated building was occupied in 2011, most of the apartments are vacation homes for foreigners and stand empty for most of the year.

Soon after the building’s completion in 2011, the Baruchs bought out their father’s partner. The lot, about one dunam (1/4 acre), was valued at NIS 20 million. The brothers say that when they came to see the property, which they intended to build on, they discovered that the neighboring building encroached on their plot.

They claim that around 60 square meters of their land, as well as a few dozen square meters designated by the city as a public walkway, were wrongly included in the new perimeter wall of 10 Brenner St.

Talbeia Properties rejects the claim, saying the wall is on the company’s property and has been there for 80 years. “The structure built on our client’s plot is a building marked for preservation built in the early 1930s,” says attorney Noa Solomon, who represents Talbeia Properties. She adds that the wall separating the properties was built at the same time. The Baruch family, Solomon says, bought their lot in 1970, decades after the wall was built, and never filed a complaint on the matter until recently.

Aronson, the architect, did not reply to requests for comment.

The Baruchs’ lodged a formal complaint with the municipality in August 2011, after their request for the removal of the structures they claimed were encroaching on their property went unheeded. They also hired lawyers, and in December 2011 they sued the owners of Brenner 10.

Around one month after the Baruchs filed their complaint, an employee of the city’s supervisory division wrote, in an internal memo to municipal counsel Merhav about the status of 10 Brenner St., that “the permits might authorize the building on Lot 39, but not the stone wall that surrounds it. These walls indeed encroach on the adjacent lot.”

In January 2012, municipal attorney Anat Zimmerman told the Baruchs their case had been forwarded to the city’s properties department. The city said it had demanded the removal of the walls. According to the city’s information management system, on January 2, 2012 a supervisor visited the site, confirmed the existence of a suspected violation and opened a file that was given to the legal department.

But despite the official recognition of a property violation and repeated inquiries from the Baruchs, the city has taken no action to demolish the walls on their side of the property line. In March the Braruchs received a letter from municipal counsel stating that the city did not intend to intervene in the matter at this stage.

The letter said the city would reconsider its steps after a verdict has been rendered in the Baruchs’ civil suit against the building’s owners. It added that after consulting with the city’s building supervision department it was determined there was insufficient evidence to prove unauthorized use of the land in question, and that in any event the violations had exceeded the statute of limitations.

The Baruchs say this contradicts previous communications from the municipality. They also cite an affidavit from Michael Fried, submitted in connection to the civil suit, stating that the wall was built between 2007 and 2009, shortly before the Baruchs complained to the city.

The city’s freedom of information coordinator, Shmuel Engel, recently said a search for a specific permit for the garbage enclosure at 10 Brenner St. came up empty. He said the city’s lawyers will look into that issue.

Engel’s remarks make it clear that the city changed its stance on construction at the site and is even ignoring its own previous decisions on the matter. “It is clear that the construction work was done without a permit, and a permit could never have been given by the municipality,” Eyal Baruch says. “The municipality’s claim that it asked the developers to build a structure for dumpsters in a place zoned as a public path is completely baseless.”

10 Brenner St., Jerusalem. Is the city turning a blind eye to encroachment on an adjacent property? Credit: Olivier Fitoussi

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