The Israel Land Authority (ILA) exemptions committee today approved the Dolphinarium deal on a format that will obligate the developers, the Sha'ar LeYisrael company, to pay NIS 50 million more than originally planned. Total payment for the permit will be NIS 320 million. The company will also have to pay betterment levy to the Tel Aviv municipality.
The saga, which goes back over 15 years, began with the signing of an agreement in 2003 between ILA, the Tel Aviv municipality, and Sha'ar LeYisrael, owner of the dolphinarium. The company undertook to vacate the Dolphinarium and give the site to the Tel Aviv municipality for expanding Charles Clore Park in exchange for an alternative site on the opposite side of the seafront road.
Since the agreement was signed, things have moved forward slowly, accompanied by severe public criticism, leaving the local authorities in no hurry to carry it out. Sha'ar LeYisrael owner Josef Buchmann sold the company in 2015 to a group of investors led by former Goldman Sachs Israel CEO Orit Freedman Weissman. The investors are Apax Partners founder Sir Ronald Cohen, Colmobil chairman and controlling shareholder Dr. Shmuel Harlap, and the Claridge fund, controlled by the Bronfman family. Progress in the plan has picked up somewhat since then.
An appraisal by the government appraiser in 2016 showed that the value of the alternative lot had reached NIS 931 million, while the value of the dolphinarium lot was NIS 62 million. This brought the parties to the conclusion that the permit fees paid by the company to ILA would amount to NIS 270 million. At the same time, the Movement for Quality Government petitioned the High Court of Justice, claiming that the company was being given an unreasonable economic benefit by the state.
The High Court of Justice dismissed the petition in October 2018, but told the exemptions committee to decide on the closure of the deal by mid-February 2019. The committee failed to meet the court's timetable, and has not issued a ruling on the matter to date, mainly because of disputes about the tax assessment for 2016. A meeting in May was attended by state appraiser Ohad Eini, who explained the assessment. The committee postponed its decision pending further clarifications concerning problems that were discovered with the appraisal.
ILA management asked the Attorney General to negotiate with representatives of Sha'ar LeYisrael, taking into account the possibility that the assessment would be substantially increased. The negotiations culminated in an agreement between the parties in which Sha'ar LeYisrael waived its right of contestation for the 2016 assessment, and agreed to pay the state NIS 41 million more - a total of NIS 320 million.
The compromise reflected a new valuation for the Dolphinarium that is NIS 130 million higher than the earlier assessment.
Published by Globes, Israel business news - en.globes.co.il - on September 23, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019