The great imbroglio of the "Patriarchate lands" - more than 500 dunams in Jerusalem the leases on which have been in dispute for over twenty years - refuses to be resolved, and may even have become even more complicated. Sources involved in the story argue that an appeal by some of the apartment and property owners to the High Court of Justice a month ago only makes a solution more distant, and warn: "If the High Court of Justice issues an injunction it will cause endless trouble."
The patriarchate lands affair originates in the signing of three leases by the Jewish National Fund (JNF-KKL) with the Greek Orthodox Patriarchate over seventy years ago, at the beginning of the 1950s. The JNF leased the land for 99 years, and what at the time seemed like forever is now rapidly approaching its end, and has become a short time in real estate terms (25 years). All along, however, the JNF has avoided making a decision whether to extend the leases (which it has a right to do under the original leases), and the uncertainty has led to a 40% decline in the prices of apartments on the lands in question, which are located in central Jerusalem, in the Talbiyeh and Nayot neighborhoods for example. Now, various sources claim that, although a solution of the matter is still a long way off, there has been progress towards one, and in their view the legal proceeding now embarked upon could prevent it from maturing.
Decades of indecision
The petition to the High Court of Justice was filed by 204 out of about 1,000 owners of properties on the lands. Their demand is clear: they want the JNK to decide on extending the leases so that they will have certainty about the future. Since the JNF, the state, and all concerned have not reached a decision on the matter, there is no option but to ask the highest judicial instance to do so.
Let us take a step back and explain the tangle over these lands. First of all, the leases are old, and do not state every detail about the terms under which they will be extended, should the JNF want that, and the consideration to be paid. Secondly, in the 2000s, the JNF tried to reach agreement with the Patriarchate on an extension of the leases for hundreds of years that seemed to have been concluded, until it emerged that the signature of the representative of the Patriarchate was forged, and the deal was cancelled.
In the background, a decade ago, private parties bought ownership of the lands from the Patriarchate, and almost two years ago US-based developer Gary Barnett bought them for NIS 750 million through a unit of his company Extell Development Company, Jerusalem Lands. All along, since that cancelled deal 25 years ago, neither the JNF nor the state has managed to reach a decision on the matter.
Talks have taken place between the company that purchased the lands and the JNF on the future of these areas. The owner wants to progress with their development as speedily as possible, but until a solution is found for the sub-lessees, the residents, nothing can happen. On the other side is the JNF, which wants at least to preserve the public areas on these lands, on which stand part of the Israel Museum, the Khan Theater, the Great Synagogue, and the Valley of the Cross, and which would of course welcome payment of some consideration if it is required to forego rights.
According to sources familiar with the matter, the talks between the JNF and Jerusalem Lands, which did not start well, have recently taken a more positive direction, and agreements were slowly taking shape. As previously reported, the possibility was mooted of allowing the residents to extend their own leases to 99 years in exchange for 5.5% of the price of the land.
Many other issues, such as the way in which vacate-and-build projects will be carried out on these lands, how commercial properties will be treated (among other things there are three hotels on the land), are a long way from resolution.
The same sources say that the filing of the petition has now frozen the talks, and could halt them completely, because of the petitioners’ request for an injunction ordering the parties "to refrain from carrying out any disposition in the leasing rights, including the option rights of the JNF under the lease agreements.." And that, as mentioned, will mean endless trouble.
In their responses to the petition, both the JNF and Jerusalem Lands point out that it represents only some of the property owners on the patriarchate lands. "The reason for the filing of the petition at this point in time is actually the JNF’s attempt to reach a speedy solution that will give genuine and immediate relief to the plight of the lessees of the apartments and will resolve the matter," the JNF states. The JNF also argues that the dispute is a civil, contractual one that does not come within the jurisdiction of the High Court of Justice.
Jerusalem Lands states that there is "agreement in principle" between it and the JNF that the signing of a final agreement will be made public knowledge - a claim that strengthens the view that the negotiations have made progress. The company says that the petitioners’ demand is "that the court should, in effect, award them rights that exceed those they possess."
The Forum for Rescuing the Apartment Lessees stated in response: "The JNF’s determined stance in the High Court of Justice in fact sides with all the claims of the lessees, among them the JNF’s ability to extend the leases indefinitely, at a low price (not set by an appraiser). One can only wonder at the efforts of interested parties at the JNF who are prepared to forego lands worth billions that belong to all residents of the State of Israel in favor of foreign companies and wealthy individuals."
Published by Globes, Israel business news - en.globes.co.il - on August 25, 2025.
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