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Greek Orthodox church sells Jerusalem land to Jewish investors

NIS 80 million deal solves capital's leasing problems through 2051.

By Ranit Nahum-Halevy

The Greek Orthodox Patriarchate sold most of its leasing rights to large swaths of Jerusalem to a group of Jewish investors last week. The NIS 80 million agreement puts an end to the long draw-out land affair - at least for the next 140 years.

In the deal, signed March 10, the Patriarchate sold most of its rights to...

 lease the land it has held in Jerusalem to a group of Jewish investors from Israel and abroad. The group includes the Ben David family, one of the wealthiest in Jerusalem, who are large property investors and partners in Givot Olam Oil Exploration.

The sale includes 85 parcels on hundreds of dunams of the capital's most expensive properties, including in the very pricey neighborhoods of Rehavia, Talbieh, Baka and Katamon.

Hundreds of projects have been built on the land, including residential, commercial and almost everything else. The properties include the Wolfson Towers that overlook the Knesset building, the Neve Granot neighborhood below the Israel Museum, Liberty Bell Park, the Great Synagogue, the old Ottoman train stations, hotels, offices and residences.

The Israel Lands Administration manages the Patriarchate's properties, in the name of the Jewish National Fund. The ILA and the Patriarchate are signed on leasing agreements through 2051, but the ILA will sign the renewed leases in the future with the group of Jewish investors.

Theofilos III, the Greek Orthodox Patriarch, signed the agreement himself, along with his deputy for financial matters.

The deal will give the buyers the ownership rights on the new land as of 2051, and they have already started talks with the ILA over the conditions of the renewal of the leases in 2051.

The agreement has long-term political significance though it may not make economic sense for the buyers, said property assessor Koby Bir.

"There are those who may say the amount [paid] is too low ... But, the investors bought the rights starting only another 40 years," he said. "Only then will they become the owners of the land and can sign the agreements to renew the leases," he said.

Bir said the deal was high risk. "No one promises that tomorrow morning, or in a few years, the JNF will start making deals to renew the leases," he said. "But now the land is being managed by a group of Jewish investors and the Palestinian threat has been removed. We have already heard that the investors are chasing after the ILA, and [the ILA] will not just let them make any amount they demand. The ILA is in no hurry."

Politics and parcels

The story goes all the way back to just after the founding of the State of Israel. The Patriarchate, the historic owner of the land in question, signed a leasing deal with the JNF. The new country needed land to develop the new capital, but the Patriarchate adamantly refused to sell any land, and instead only agreed to lease it out.

In 1952 the Greek Orthodox Patriarchate signed the deal which left it with formal ownership of the properties, but all the rights to use and develop the land were transfered through a long-term lease of 99 years to the JNF, until 2051.

The original terms allowed the JNF to sublease the land to various developers, which built on the properties - including thousands of homes. But the original lease stated that the Patriarchate would once again receive the full and sole rights to the properties when the lease runs out in 2051.

To prevent a situation where the residents and others using the properties would have to negotiate individually with the Patriarchate in the future, the state carried on secret negotiations for decades in an attempt to convince former Patriarch Diodoros I to agree to extend the lease.

But political pressure, mostly from Palestinian groups, kept Diodoros from signing. Israel was also worried that after the establishment of the Palestinian Authority, the new body would reach an agreement with the church over the land.

In early 2000, a deal was formulated by Jacob Weinroth, the attorney representing the JNF. The new lease was to have been extended to 2150 in return for $20 million. The sides even signed a letter of intent, but the deal was canceled shortly after with the Patriarchate claiming the buyers had defrauded the church. Various repercussions from this failed deal and the myriad accusations are still being heard in court.

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