The Marker, Adar Horesh, 24.02.2020

The Jerusalem Municipality has asked to join the housing trend for subsidized rent in the city center. But a string of failures in managing the tender revealed by City Council Attorney Yossi Habiliyo and reviewed by City Attorney Eli Malka raises serious questions about the town's economic and legal conduct in the case.

The plot, located on 1.6 dunams, is located between Alayash and Mesilat Yesharim Streets, near the Beit Maza Theater. In 2015, its value was estimated at NIS 50 million. A 72-apartment project with adjacent parking for each apartment can be built on the site, 1,260 square meters of space. Commerce and 2,810sqm of offices and paid public parking, with 267 parking spaces.

When the offer to sell the lot to private developers came up, it was decided to use the venture as a lever for long-term rental development: it was determined that the developer who won the municipal auction would target the apartments for rent for at least 20 years, and then be able to sell them in the free market. 40 of the apartments will be limited to an area of ​​45 square meters each, and will be leased at 20% lower than the market prices. The remaining apartments, 100-75 square meters, will be rented at market prices. 735 square meters will be allocated for municipal use.

The rental plan's restrictions required the municipality to recalculate the lot's value, and an opinion in 2018 determined that its market value was NIS 44 million. In accordance with the rental plan, the value of the lot drops to NIS 25.2 million. The first tender published by the municipality was not accepted, and in the second tender, one bid was accepted, by Moshe Abyssror and his sons.

Abyssror's bid for the project amounted to only NIS 21.4 million, about 15% below the value set in the municipality's assessment of the rental plan

The company's president, Moshe Abyssror, was previously chairman of the Negev Contractors' Association. His son Eli, who directly handled the project in Jerusalem, serves as the company's CEO, chairman of the Negev Contractors' Association, and Acting Chairman of the Israel Builders' Association.

Abyssror's bid for the project totaled only NIS 21.4 million, about 15% below the value set in the municipality's assessment of the rental plan. The deal means that the municipality will subsidize the 40 apartments in the project for more than half a million shekels per apartment, amounting to NIS 22.6 million.

Wrong decision and problematic behavior

Abyssror's proposal sparked controversy in the municipality , which some of its people had trouble accepting the huge expense of subsidizing a project that would not materially affect the state of housing in the city center. Jerusalem is one of the poorest cities in Israel, and is suffering from a lack of development budgets. It is the only metropolitan area that needs government grants and grants totaling NIS 900 million a year to balance its budget. The Tender Committee approved the Abyssror win after being rejected, and another meeting of the council's finance committee approved the deal by a majority of four for, two against and another abstained.

Following the criticism of the project, City Manager Itzik Larry instructed Malka City Attorney General to look into the issue. Malacha's report reveals that "no land assessment has been prepared, but an examination by an economist to examine the economic issues in the tender. Does not meet the requirements of law, ”stating that the committee made its decision based on misrepresentations.

The high subsidy costs of the venture and the conduct of the municipality sparked the opposition of Attorney Yossi Habiliu, a city councilor

Malka also contacted appraiser Ronnie Afik to ask for a real assessment of the property, stating that the value of the free market pitch amounts to NIS 78.6 million - 79% more than the estimate presented to the City Council when the project decision was made. The value of the land under the rental project amounts to NIS 27.8 million - about 10% more than the value according to the previous opinion. This means that, according to Abyssror's proposal, the subsidy cost of the project amounts to NIS 57.2 million - NIS 1.4 million for every subsidized apartment. This bid is about 23% lower than the real value of the land.

The high subsidy costs of the venture and the conduct of the municipality have provoked his opposition. He addressed Leon in a letter pointing to the project's failure to approve the project, stressing that the contract would allow the municipality to withdraw from the deal if it was not approved by the city council.One of the alternative proposals he made was to carry out the rental project under the BOT: The developer will receive the project and run it as a rental project, and at the end the land will be returned to the city.

Eli Abyssror objected to the change in the deal, and even met with Queen to present his arguments. You can learn about his behavior from the attorney general's report, which states that he was accompanied by Ilan Gordo, whose role in the meeting is not excellent, but is a well-known personality in the city. Gordo is the chairman of the large Likud branch in Jerusalem (Leon and Barkat's party), the treasurer of the contractors' organization Builders of the country and a member of the presidency alongside Abyssror. One of his predecessors led by the Likud branch and the head of the Likud faction in the municipality was Attorney Elisha Peleg, who served as Deputy Chairman of the Tender Committee, which discussed the deal.

Preparations are underway

Next month will mark a year in the decision to grant Avisror the pitch. Last week, Abyssror decided to encourage the municipality to approve the deal through an administrative petition to the Jerusalem District Court, through Attorney Yossi Ben Dror.

The company claims that the city council has no authority to cancel the deal, but only to the tender committee. The company added that although the deal has not yet been approved, they have been approved to start drilling on site.Abyssror has already begun planning the project, pledged guarantees and even started negotiations with a municipal company to operate the site as a parking lot until work begins. If the court dismisses the petition, the municipality will have to reconsider whether a 40-dwelling subsidized housing project deserves a NIS 57 million grant .

The Jerusalem Municipality said in response that the original deal "has flawed", which means that the committee's decision to determine Abyssror as the winner of the tender cannot remain valid, and the committee must be re-discussed. It was further stated that "however, it will be emphasized that the Tender Committee acted properly at the time of its decision based on the representations put before it in real time" and that as of this date, the transaction could not be legally submitted for discussion with the approval of the council.

Eli Abyssror said in response that he hopes the municipality will fulfill its commitments and approve the project.According to him, Grodeau attended a meeting with the attorney general as a friend, and has no connection to the project. Grodeau said he attended the meeting based on his acquaintance with Abyssror as an activist in the contractors' organization, and has no business relationship with the project at this time.