No New Investor Sought

Motti Zisser had difficulty concealing his excitement on Tuesday at the opening of the Arena Mall in Herzliya marina. As president of the Europe Israel group, which owns the mall, he enthused about its many features and attractions, its decor and design, the activities it has for children and adults and its huge entertainment aspect compared to other malls. Despite all these selling points, the mall's main drawback is the access to it.

The mall cost $153 million to build and Zisser believes it will attract visitors from all over the country, especially since it will be open on Shabbat. Zisser expects the mall's revenues to reach $20 million a year and to attract an average 25,000 visitors a day.

Senior experts in the real estate business are however skeptical of these forecasts, and also mention the mall's problematic accessibility - location being the most important factor for the success of a mall.

The Arena Mall is quite a distance from the main road and the access road to it is extremely busy, especially on weekends - the most important days for a mall. A wider access road is not due to be completed for at least six months.

To address the accessibility problem, the mall will operate a shuttle service from Arlosoroff, Rokach and Herzliya train stations. There will also be a shuttle service from Herzliya Pituah in the early afternoon hours to bring people working in that area to dine at the mall. Michal Besor, the mall's marketing manager, says the service will cost an estimated $250,000 a year.

But it's not clear how much the shuttle service will contribute to solving the accessibility problem. "Shuttles don't work in Israel," says a senior real estate person. "Israeli consumers do not like them - they like to drive from their homes and park near the mall." Also, a considerable share of Israeli buying power is controlled by car owners.

The real estate experts also say that a forecast of 25,000 visitors a day is astonishing. The Azrieli Mall, which is centrally located at a major intersection in Tel Aviv, draws an average 30,000 visitors a day; the Negev Mall near the central bus station in Be'er Sheva attracts 25,000 visitors a day; the Ayalon Mall in Ramat Gan, one of the most successful in Israel, barely gets 20,000 visitors a day. In Herzliya about 14,000 people visit the Seven Stars Mall each day, and it too suffers from restricted accessibility.

Despite the skeptics, Zisser feels the mall's uniqueness will attract visitors, because the Arena Mall concept is different from all the other malls. They rely on stores to attract visitors, but Zisser believes the mall itself will attract clients for its activities and facilities. Entertainment services at Arena occupy about 45 percent of the space - 10 percent more than in other malls, Zisser says.

Zisser outlined the facilities he hopes will attract visitors to the mall. There is Tornado, an array of sports activities including Omega cable slides, boats, pits and a host fairy tale theme, which is due to open about a month after the mall's official opening on June 17. There is a Cinemax movie theater with moving seats and special effects; a rain forest that is due to open in three months and which will feature plants and animals. There will be an entrance fee for these facilities, and Zisser thinks they will generate revenues of NIS 40 million a year. The mall will also host free events for children, teens and adults.

A concept similar to that of Arena Mall was attempted at Haifa's Grand Canyon Mall, where a 5,000-square meter amusement park was built about two years ago. Yisrael Savyon, the mall's general manager, says in the past year management of the mall has been transferred to a company that specializes in amusement parks, but he said terror attacks in Haifa had lowered attendance at the mall and the park.

Zisser dismissed reports that he would sell the mall - either because of Shabbat problems or for other reasons (see box). "We manage 18 malls worldwide and are about to open 7 more," he said. "We understand the mall business much better than any other small fry who chooses to express an opinion."

The opening of the Arena Mall was twice postponed. The original opening date was March 3, but in February the management postponed it to May 7. The May date also slipped to June. Besor said the delay was because the mall had not obtained all the necessary permits.

Europe Israel's spokesperson said on Tuesday that at this point there are no plans for another investor to join the Arena Mall at Herzliya marina. In recent weeks there has been much talk in the real estate industry about Zisser's imminent sale of his holdings in the mall. Among reasons being cited are the halakhic (Jewish legal) ruling that he could open the mall on the Sabbath if he were not the only controlling shareholder.

Another reason suggested for a sale of some holdings was the condition of Zisser's business dealings. Zisser had been negotiating with Nitzba Assets, but those negotiations collapsed and real estate sources still believe Zisser is seeking an additional investor or a buyer for all of his holdings.

A few days before the opening, the mall had not received an occupation permit. Herzliya Municipality said that it was doing its best to promote the opening of the mall, but added that it was the developers' responsibility to fulfill all the requirements necessary for the permit. The mall's public relations office told Haaretz the final preparations needed for the permit are currently nearing completion.

Recently construction began on a road connecting Herzliya marina with the coast road. The road will be parallel to Hagalim Blvd. and will take about six months to complete. It will provide direct access from Hasira intersection to the marina, and will make it easier to reach both the marina and the mall.

Rental prices at the mall are among the costliest in Israel - $70-$80 per square meter. The average cost per square meter of commercial space at the Seven Stars Mall is $65. (Miri Reily)