The bidding at Ramat Gan’s Leonardo Hotel lasted a grueling five hours Monday as the property development companies competing to buy the site of Tel Aviv’s old Central Bus Station raised their offers in increments of 10 million shekels ($2.65 million).
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In the end, Housing & Construction Limited and its partner Levinstein Properties was declared the winner, with a bid of 560.5 million shekels. Or did it? Canada Israel Group is threatening to go to court, claiming it matched the offer and was ready to go higher, if it had been allowed.
“The receiver’s conduct was outrageous,” said Eldad Avraham, an outside director for Canada Israel, after the bidding was over. “We intend to use every legal tool we have, including petition a court. We made the highest bid and it’s not clear why the receiver rushed to close the auction when he could have won more money for the property holders.”
The old Central Bus Station site occupied 36 dunams in south Tel Aviv. Once a major travel and commercial center where buses from around the country converged, the area today is a neglected patch of one- and two-story buildings and a big open area that served as the bus station itself.
The site was put up for sale by court order because ownership is divided among so many different parties they were unable to reach an agreement on terms to sell jointly.
Canada Israel was ready to raise its offer, said Avraham, when it learned that the 50-50 partnership of Housing & Construction and Levinstein had already been declared the high bidder.
Four groups that applied for the auction before its May 31 deadline said they were interested in buying the entire site, while three others said they would offer to buy one or more lots among the five up for sale.
The bidding opened at 350 million shekels, the minimum an assessor had determined the site was worth – 400 million shekels minus the 60 million to 70 million the buyer would have to spend buying out current tenants.
Attorney Mordechai Gluska, the receiver appointed by Central District Magistrate’s Court President Daphna Blatman-Kedrai, defended his decision.
“My only considerations were to maximize the proceeds while keeping to the conditions of the pricing process as determined in advance, and used during all 10 rounds of bidding,” Gluska said. “The highest bid was the only one that met these two criteria. The results will be given to the court as soon as possible.”
In any case, development of the old Central Bus Station is unlikely to get underway for another seven to 10 years. Issues surrounding building rights, property taxes, costs of moving out exiting tenants remain unsettled.
The existing zoning rules for the area, which dates from the 1940s, entitle propertyowners to 300% building rights. A new plan for the area, awaiting approval by the district planning committee, would expand that to 800-900%.
A plan drawn up by by Tel Aviv’s former chief engineer enivisons 280,00 square meters of building, 100,000 slated for 980 apartments and the rest of business. But the plans cover an area surrounding the old central Bus Station area and it is unclear how much of those right siwll accrue to the site itself