The Amal Cinema in Kfar Sava. Over 400 locals are fighting its development. Yuval Tabul

Turning an Army Outpost Into a Boutique Hotel: Tackling Israel's White Elephant Epidemic

Israel’s three biggest cities have some 1.5 million square meters of space in derelict buildings such as former movie theaters and telephone exchanges. Converting them brings many challenges, including from local residents and business owners



Over 400 Kfar Sava residents have been campaigning since 2012 to save the Amal Cinema, an old movie theater that closed in the early 2000s. The building was then sold to a developer, who wanted to change the building’s designation from public to private space. But the residents got together to prevent the building’s demolition and guarantee its preservation and old designation. They started running community activities in the cinema foyer, tried to increase awareness and even turned to the relevant municipal bodies.

“It’s a public building with a rich history,” explained activist Sharona Liman. “For decades it was traditionally the center of communal life. It’s a focal point for culture and entertainment, and that’s how we want it to remain. We’re witnessing, on the one hand, the need of neighborhood residents for the alternative activities we offer at the old movie theater. And, on the other, the stubborn refusal of the municipality to try to preserve the building as a place that serves the community, after it was sold into private hands.”

Activists claim the local municipality and developer are encouraging the building’s neglect so that its original purpose will eventually be forgotten and it will be channeled instead into private and profitable uses for the developer and municipality.

The phenomenon of white elephant properties is so common that it exists in almost every city with old buildings. According to estimates, the cities of Tel Aviv, Jerusalem and Haifa feature some 1.5 million square meters (16 million square feet) of buildings that are not used for housing or commerce and don’t generate property tax revenues. That’s a waste of land, especially in the city centers and at a time when developers are looking for spaces where residential and public buildings can be built.

The November 2016 State Comptroller’s Report, which discussed local governments’ handling of derelict buildings, determined that buildings which stand unused for a long period constitute a serious environmental, health, safety and social blight.

Yuval Tubal

The case of the Amal Cinema is similar to that of the Eden Cinema in Tel Aviv’s historic Neveh Tzedek neighborhood, as well as dozens of other derelict movie theaters and public buildings. The tension between preserving old buildings for their traditional use and demolishing or redesignating them for a new use can cause the buildings to remain empty for years.

However, abandoned buildings that are privately owned can be an engine for urban renewal if local governments adopt a policy to promote such renewal and adapt the buildings for communal needs, in cooperation with the developers.

Between nostalgia and unrealized potential

Lawyer Anat Biran, who specializes in planning, construction and land law, represented developer Reuven Ella in a residential project that is scheduled to be built on the site of the old Pe’er Cinema in north Tel Aviv. She explains that “movie theaters – just like the Bezeq telephone exchanges, for example – are buildings that were constructed for specific purposes, but whose use has become irrelevant” nowadays.

She says the developer wanted to create a residential project for 30 new apartments, and that the land is even designated for housing. However, neighbors and other businesses in the area raised numerous objections, preventing any progress over the past decade.

“There’s a supermarket and fitness club on the ground floor today,” says Biran. “The business owners don’t want to relinquish use of the asset in favor of housing or to take into consideration the residents who could live upstairs – and they don’t want to leave, either. The compromise reached between the developer and business owners enables him to use the building without making major changes, but [the plan to turn] the old movie theater into housing and taking advantage of the land’s potential are still stuck.”

Biran adds that private developers purchasing derelict buildings must go through a long process in which they apply for a change in the building’s designation and that, especially in urban areas, they often encounter objections from neighbors and local businesses. She says the locals have become accustomed to the fact the building doesn’t function and are afraid of any potential revival.

In some cases, the tenants try to extend the interim situation so it becomes the norm and, therefore, there will be no additional burden on infrastructure in the area.

Biran cites the Shavit Cinema in Givatayim as another example. The residents there organized, and even asked for legal advice, when a developer wanted to build a supermarket on the site of the old movie theater. They tried to make things difficult for the developer so that their quality of life wouldn’t suffer, she says.

Old movie theaters are seen as a major problem when it comes to derelict buildings. Experience shows there is almost no possibility of using them for other purposes, and that economic feasibility dictates their demolition and the construction of other buildings in their place. However, most were built in the first decades of the state, or even earlier, so they are of architectural value and also stir feelings of nostalgia for many of the city’s residents. The result is abandoned buildings whose fates can’t be agreed upon by local governments and the owners.

Occasionally, old Bezeq telephone exchanges and Histadrut labor federation buildings cause considerable problems, since the designation of such buildings in the state master plans is as public spaces, and an essential condition for changing their designation involves changing the master plans. Although developers occasionally bought old telephone exchanges and used them for other purposes, the master plans do not allow for a change in the designation of public areas to private ones.

“The subject of planning and construction is one big and complicated bureaucracy in Israel, especially in light of the objections and demands that come up, and which can continue for years, along with the fixation on designations and restrictions from decades ago that are not always related to the changing reality,” says Biran. “That’s the source of totally empty buildings on which both the public and municipalities lose money.”

Biran claims the solution lies with the establishment of an interim track – one that will enable use of the buildings without demolishing them, until a designation change is decided on in the necessary law court. “We have to make things easier and to offer at least an interim solution, so there won’t be empty spaces that invite problems,” she adds. “We have to rethink the options of using these spaces, especially in the direction of rental accommodation or hotels.”

Daniel Tchetchik

About three years ago, for example, the Abraham Hostel network entered the Bezeq telephone exchange in Tel Aviv (parallel to the southern part of Rothschild Boulevard). The owners received a permit to establish a hostel and invested a small amount in order to convert the building. The building also features lives performances.

Such a solution encourages the use of otherwise derelict buildings and can satisfy growing demand from the tourism industry. But the developers investing in a building that receives a permit for exceptional use for a limited period (say, for five years) are liable to find themselves in a situation where it isn’t economically feasible for a temporary project.

Israeli law gives the owners of empty buildings a three-year exemption from property taxes, with an option to extend that for up to another five years. For eight years, then, the municipality doesn’t receive property tax on such a building, and even afterward the owners are only obligated to pay the tax according to the lowest tariff if the building remains empty. Meanwhile, the public loses out.

Army bases becoming hotels

Some empty buildings that have successfully changed their designation are former army bases and outposts the Israel Defense Forces has abandoned, like the Arandal outpost in the Negev that has become a boutique hotel. Architect Ram Marash, who took part in the planning of the district master plan in the Arandal region, says a change in the designation of the outposts was only possible after the IDF released its hold on the outpost, and with the encouragement and support of the Tourism Ministry and the Israel Land Authority.

“It’s an attempt to turn the restriction into an opportunity,” says Marash. “Most of the outposts were on the main road with lovely views, which in the past provided a view in the direction of the enemy. Even the underground elements of the outposts can be used and changed into wineries, a spa or a club, as we did at Arandal,” he adds.

Marash says that in areas like the Arava Desert, the Israel Nature and Parks Authority and Society for the Protection of Nature in Israel have always criticized and objected to construction, because these are open areas and protected natural spaces. “There’s a fear that the developers will try to expand and take over areas, and that the natural resources will be removed from public ownership and transferred to private hands,” he says.

Dani Cohen

“Therefore, we’re usually talking about a small number of rooms or boutique hotels. The INPA, for example, claimed the change of designation to the Arandal outpost harmed the public, since the hotel fenced itself in and prevented entry to the shared spaces. We had to explain that the fencing was necessary to prevent theft and allow for maintenance.”

Developers, contractors and architects who carry out projects in IDF structures say another challenge stems from the poor condition of the buildings and infrastructure. “I’m currently preserving a building at the Vered army base, in the Be’er Sheva area,” says Marash. “It will become a school for dance, and it turns out the process is more challenging than we thought. The British governor’s house in the area belonged to an army canteen, and I found the building in terrible shape. The last thing the IDF cares about is preserving its buildings, and therefore anyone who buys them has to invest a lot in renovation and preservation.”

Moreover, in some of the outposts located in open areas, there is a challenge relating to mined areas. “The IDF is supposed to clear away the mines, not the developer. But sometimes, in order for things to happen, the developer has to help things along,” explains Marash. The same is true of removing barbed-wire fences.”

Aside from the IDF outposts that are arousing renewed interest due to their interesting locations and existing infrastructure, old Histadrut labor federation sanatoriums are also being revived. Prominent among them are the Elma Arts Complex Luxury Hotel in Zichron Yaakov and the Carmel Forest Spa Resort, which have been converted from simple compounds into grandiose hotels. However, some of the compounds in rural areas are still deserted, including the Dolphin Village in Shavei Zion and Beit Yaari, north of Netanya.

The non-establishment alternative

A less conventional approach to the revival of buildings is practiced by the Empty House movement, an artists’ group that has been active in Jerusalem since 2011. Gili Levy, one of the group’s first members, recalls how “the idea was to enter a building illegally, to renovate it without a budget, with craftsmen from various fields, and create a cultural center that opened for a limited period of 12 hours to a week. Very soon, hundreds and thousands of people were attending these events.”

Levy says the movement’s renovation work corresponds with the building and its previous incarnations. “There’s a tendency to do renovations that restore the building to a very specific period in its past,” says Levy. “The question is how to produce a multilayered story and not only one point in time in the building’s history. The entire building turns into a complete work that changes frequently: ‘We’re not here forever and we’re not the only ones who were here’ – that’s part of our thinking.”

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