By Gil Zohar
Tribune Correspondent
TEL AVIV – Israel’s boom-bust economy may be entering a new growth phase symbolized by an agreement signed at the end of January to complete the 42-storey third skyscraper of the architecturally bold, US$350-million Azrieli Centre here – notwithstanding the 1.2 per cent shekel depreciation against the US dollar following Hamas’ Jan. 25 election for the Palestinian legislative assembly.
In 1998 Montreal builder David Azrieli inaugurated the 187-metre, 50-storey Circular Tower and a two-floor shopping concourse and parking garage – the first phase of his mega-project in central Tel Aviv opposite the Qirya (Defence Ministry) and adjoining an expressway and commuter train station in the very heart of the Big Orange. Phase two opened a year later with the 169-metre, 46-storey Triangular Tower. But as a result of a dispute between Azrieli and the municipality about adding extra floors and changing the zoning to permit a hotel, construction was halted in 1999 on the skeleton of the landmark complex’s third tower, the 154-metre Square Tower, when it reached the height of six floors.
Now Tel Aviv-based Elhar Engineering Construction Ltd. has won the tender to complete the abandoned eyesore. Elhar is a privately owned company held in equal share by Israeli businessman Benni Elhar and Denkner Investments Ltd. Construction is slated to start shortly, and the building is expected to be occupied by 2007.
Elhar is currently building the 31-storey Bank Discount Tower in Tel Aviv.
Holiday Inn may become an anchor tenant at the Azrieli Centre’s third building. Africa Israel Investments Ltd. is currently negotiating a 25-year lease for 14 floors in the square tower in which it plans to open a hotel at a cost of US$75-million, according to the Tel Aviv financial daily Globes.
The awarding of the tender follows the resolution in October 2004 of Azrieli’s three-year dispute with the Tel Aviv municipality. Former Israel Supreme Court Justice Meir Shamgar ruled in the arbitration case between the Canadian shopping centre magnate and the Tel Aviv municipal government, which claimed that Azrieli’s privately owned Kanit Investments Ltd. must pay a betterment levy of US$52 million.
Shamgar’s ruling – a US$6 million levy – was the lowest amount Azrieli could have expected. The dispute was sent to arbitration in 2001, when the parties agreed to arbitrate a betterment charge of between US$6 and US$14 million.
The payment was due to the municipality for changes in the original Urban Building Plan for the Azrieli Centre, which has been compared to Toronto’s TD Centre or Montreal’s Place Ville Marie.
Under an earlier agreement with the municipality, Azrieli could continue construction of the square tower in exchange for vacating 50,000 square metres of residential space in historic Bauhaus apartment buildings currently occupied by offices. Azrieli claimed that he tried but failed to fulfill that agreement. The municipality, therefore, demanded a US$52-million betterment levy for the building rights.
Azrieli, 83, revolutionized retailing in Israel when he opened the country’s first North American-style mall in the Tel Aviv suburb of Ramat Gan in 1984. The concept was so radical the Polish-born Holocaust survivor had to coin a Hebrew word, canion, from ‘buy’ and ‘parking lot.’ The mall, called Canion Ayalon, alludes to the valley where Saul and Jonathan smote the Philistines (I Samuel 14:31).
Azrieli followed that initial success with malls in Beersheba, Jerusalem and Haifa, where he had studied architecture at the Technion before moving to Canada in 1954. In 1997 he fulfilled a life-long ambition by completing his professional accreditation, earning a Masters in Architecture from Carleton University in Ottawa.
In 2001 the Azrieli Centre’s Circle Tower was eclipsed as the tallest building in Israel by City Gate in Ramat Gan’s Diamond District – also known as Moshe Aviv Tower after the project’s developer. The skyscraper stands at a height of 244 metres, with 68 floors above ground and five levels underground. Most of the tower is used for offices, but the top 11 storeys are residential.
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