Ikea Loses Battle Over New Store

Tel Aviv District Court canceled the extraordinary usage permits granted by the Rishon Letzion municipality to Ikea.

Yesterday marked a dramatic turnaround in the fight over the second Ikea branch now under construction in Rishon Letzion: the Tel Aviv District Court canceled the extraordinary usage permits granted by the Rishon Letzion municipality to Ikea. Judge Nurit Ahituv also voided the decision of the regional appeals panel of the planning authority that approved the city's actions.

This is a huge victory for the opponents of the Ikea project, which include a varied coalition of greens, local Rishon merchants and residents of nearby moshavim, the small, farming communities in the area. It also represents a serious setback to Matthew Bronfman and Shalom Fisher, the Ikea franchisees in Israel. Representatives of the Bronfman-Fisher group said that they are considering halting recruitment of new employees for the Ikea project.

The decision was based on a ruling of the Supreme Court of a few years ago, which determined that it was not allowed to issue permits for extraordinary use for large projects that have a significant impact on their surroundings; and in such cases there is a requirement for both the developers and the municipality to approve a proper urban plan.

The Ikea group was surprised by the ruling yesterday. The possibility that the court would rule against them was considered, but officials from the Bronfman-Fisher group always broadcast the message that they thought the court would approve the project.

Ron Hadassi, the chairman of Ikea, was restrained in his comments yesterday morning: "We are disappointed by the decision. We are now studying the ramifications of the decision and we will consider filing an appeal. We acted according to law and according to permits that we received, and we will continue to act in the same way. The new store was meant to have about 400 employees, out of which about a hundred have already been hired," Hadassi said.

The local planning board originally approved a permit for extraordinary use to Iris Hagilboa Construction and Development, the real estate arm of the Bronfman-Fisher group, which owns Ikea, and to Gazit Globe for commercial purposes.

Ikea Israel CEO Shlomo Gabay added: "You have to remember that Ikea is not the developer. Iris Hagilboa is. Ikea will not open a store without the legal permits."

Ikea has already been taking steps to open the store, which was planned to open in the middle of 2008. In any case, sources said that there was no problem as to inventories, as all the goods could be sold at Ikea's Netanya store if necessary.

The fight over the Ikea project has been ongoing since the beginning of 2006, when the Bronfman-Fisher group and the Gazit Globe real estate development company won an Israel Lands Administration tender for the land, and paid NIS 150 million for it.

The land was zoned for industry according to the master plan.

In June 2006 the local planning commission in Rishon Letzion approved a building permit for two industrial buildings on the land, along with an extraordinary usage permit for commerce.

This decision was appealed by local merchants and nearby residents, and in February 2007 their appeal was rejected by the regional planning commission's appeals committee.

As a result, the group petitioned the court.

Judge Ahituv criticized the planning commission saying that the extraordinary use requested would affect areas well beyond the immediate industrial area. Not only would it likely influence all of Rishon Letzion, it would also influence the entire Dan region, if not beyond that, she explained.

It is likely that the Rishon Letzion municipality and Ikea will appeal the case to the Supreme Court.