Earthly Jerusalem, Heavenly Jerusalem, and Jerusalem of Gold

A new prestige housing project in the city center is proving a hit with overseas buyers.

By DANIEL KENNEMER
December 30, 2005 03:53
jerusalem 88

jerusalem 88. (photo credit: )

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later

Only a couple months into its sales phase, Jerusalem of Gold appears to be a project that will reshape the city's overseas resident social scene, even as it contributes to fundamental changes already underway in the city center. "Business is going very strong - particularly from the US. We're straining under the pressure," joked Yoram Shechter, one of the project's developers. "Seriously. Sales are growing constantly. Friends bring friends." The tower will have a view of the Old City and the Jerusalem city center, and the project as a whole will be walking distance from both the Great Synagogue and the Yeshurun Synagogue on King George St., as well as the Rehavia and Talbiyeh neighborhoods and several major hotels - including the Sheraton and David Citadel. The Old City itself is also just a quick stroll away. Indeed, the project's very centrality is prompting some criticism from those concerned by its aesthetic impact and by the prospect of its apartments standing empty for much of the year - concerns that its developers insist are unfounded. Shechter believes the project's major selling point is the management service offered, allowing apartment-owners to live like hotel guests if they so wish - but with even more pampering. Like a hotel, the project will also include a swimming pool, spa, sauna, and massage room, as well as conference rooms and reception halls. The project's main entry is designed as a grand lobby, with security. Jerusalem of Gold is one of several mega-projects in the immediate vicinity including Frank Gehry's Museum of Tolerance and a monumental courthouse - both just a few steps further down Hillel St., which itself will be partially pedestrianized. The city is also planning a whole redevelopment of the adjacent Independence Park. "So the area will become very prestigious in the near future," Shechter commented. Luxury living But inside are apartments, not hotel rooms. Overseas residents coming in for the holidays can request to have their kitchens kashered and ready before their arrival for Pessah, or that the management have a succa ready for them in the autumn, Shechter noted. Furthermore, areas will be available for larger succas and table arrangements if apartment-owners want to host events. Jerusalem of Gold's managers will also provide meals, do laundry, and organize events upon request. In the communal areas, a projection room can serve as a "private cinema" for residents, who would also have access to a game room. The first building, scheduled for occupancy in three years, will slope from 12 to eight floors following the site's topography. It initially was designed to hold 120 luxury apartments, but because the units are fully customizable, buyers are expanding the size of the units they're purchasing so Shechter predicts it will top off at only around 80 apartments. "Everyone's buying [units the size of] one-and-a-half or two apartments. No one is paying attention to what I had originally planned." The tower, which originally was planned to hold 180 apartments, now appears more likely to fit a maximum of 140 units. Construction of the 24-floor tower, which is closer to King George Street, will begin within the next six months and the building is expected to be standing within five years. But it won't only be residents benefiting from the luxury project. The ground floors of both buildings will be used as commercial space for boutique shops and services benefiting inhabitants of adjacent neighborhoods and passersby as well. Underneath the project, parking space will be available for both the general public and residents. Two historic stone buildings on the site will be preserved and integrated into the project's public space to be accessed through a pedestrian pathway. A cafe is planned to give the space life, Shechter said, but they still have to decide whether the historic buildings will be used for cultural institutions, galleries, housing or offices and commerce. The price of luxury Prices for Jerusalem of Gold apartments range from $6,000 to $9,000 per gross square meter - roughly $600 to $900 per square foot. Of the apartments sold so far, most are less than 130 square meters, and the biggest sold is 200 square meters. The building also includes several penthouse units in the 300 square meter to 455 square meter range, and even a few measuring 609 square meters. At least one prospective buyer has expressed interest in extending the biggest size by another hundred square meters. The smallest units sold - guest apartments bought alongside primary units - measure less than 70 square meters. Twenty-five of the buyers are from North American communities, while the other five are British, or South African, Shechter said. Some French Jews and Israelis have expressed interest, but have been slower to buy, he said. Shechter estimated that roughly one-half of the 30 buyers who have finalized their purchases thus far took out a mortgage for 70% of the sum, while the other half made the purchase without a loan. Jerusalem of Gold is one of two major luxury projects being built in central Jerusalem. The rival King David's Crown project - currently being built on the YMCA sports stadium - has been selling units for significantly less per square meter, on average, an industry source indicated. The King David's Crown project is said to have similar amenities, but not quite the range of pampering planned by Jerusalem of Gold. The prices of both projects seem to be moving up, with King David's Crown units rising from a lower base, however, because selling started nine months ahead of Jerusalem of Gold, the source indicated. I.B.I. Group data, released this past summer, confirm that in Jerusalem prices rose 10.8% between the first half of 2002 and the second half of 2004. In contrast, prices fell 12.8% in northern Israel, 9.8% in the South, and 9.1% in the center of the country. Only in the coastal Sharon region, did prices rise - by a mere 2.7%. Nonetheless, the industry source argued that comparing the two is "like apples and oranges" in terms of their location and style. Both projects are selling for a notch above the nearly $5,000 per square meter paid by overseas residents for high-end apartments in neighborhoods like Rehavia, Talbiyeh, or the German Colony. Although the two projects are alone in central Jerusalem for now, that might change. "The big building companies still haven't discovered the potential for luxury residential projects in Jerusalem," the source indicated. A tower in the city center? Planners and politicians in Jerusalem continue to debate the merits of projects like Jerusalem of Gold, which has generated controversy because of its target market and the fact that the 24-floor tower dwarfs its surroundings. City Planning Commission head and Vice-Mayor of Jerusalem Yehoshua Pollack, however, sees nothing wrong with the project's dimensions. "We have no problem [with high-rise construction]. Densifying Jerusalem is a positive thing, since in Jerusalem we have infrastructures for residential [construction], and it will help revitalize the city." Meretz councilman Pepe Allalu, on the other hand, favors limiting construction in the city center to six or eight floors, "maximum." "Jerusalem is a historical city, with a legacy. You can't just put a 24-floor building there," he said. Yet there was no opposition from the project's neighbors themselves, who would feel the tower's impacts most directly, Shechter said. "To the contrary, they know that the project will only increase the value of all properties in the area," the developer said. Still, concerns remain about the tower's "significant effect" on the Old City basin. "The city is losing its topography, its form," argued Jerusalem planning consultant Uri Barshishat - who, when the project was in committee, presented the only petition against it, on behalf of the Society for the Protection of Nature in Israel. Amiram Gonen, professor emeritus of urban geography at Hebrew University and Floersheimer Institute researcher, stressed the Old City basin's "symbolic sensitivity" since there are not many cities with their central business district so close to a historically and spiritually charged core. Gonen also argued that Jerusalem's many tourists and pilgrims - a mainstay of the economy - could be disappointed and angered by unaesthetically imposing developments in the holy city - particularly within the Old City basin. Agreed Councilman Allalu: "We lose out the moment a building is made that reduces the added value that Jerusalem has and other cities don't." Gonen argued that instead of towers, developers should concentrate on filling the gaps in the city center's urban fabric since building densely results in the same number of residential units as building upward. Towers have also damaged the urban environment, Barshishat argued, noting that other tall buildings in the Jerusalem center have created wind tunnels and dead areas on the streets below. Barshishat conceded, nonetheless, that in terms of its relation with the street below, Jerusalem of Gold's tower is planned "in the most correct way possible" in relation to its surroundings. In their design, indeed, the architects seem to have attempted to buffer the tower's impact on the street below by creating a six-floor "step" of construction around the bottom of the tower. If successful, passersby will primarily feel the presence of the first six floors, barely aware that the building they're passing continues climbing for another 18. Meir Tourjeman, Jerusalem councilman and member of the city's planning commission, pointed out that towers, as such, are no exception to the Jerusalem skyline. "No place is better than the city center for high-rise construction," he said. Quiet downtown? While all applaud the concept of revitalizing downtown Jerusalem the prospect of more buildings standing empty in the city center is a nagging concern. "We want to bring young couples, students, to revive the center. Projects like this one are opposed to that conception," councilman Allalu charged. "It is a fact that such buildings stand half-empty and their residents live abroad and come for the holidays," he said, pointing to the seasonally "empty" David's Village project in Mamilla - between King David St. and Jaffa Gate. Fellow Meretz city councilman Sa'ar Netanel insisted, however, that he is not opposed to the construction of such projects as a rule, "but their location must be considered carefully, in order not to create a block that is purely [foreign residents]." Seasonal overseas ghettos "don't create the pedestrian traffic or commercial activity that you would want to happen when people come to settle [in a central district]," Prof. Gonen noted. "This is a special problem in Jerusalem." David's Village, for example, "did not create any [positive] movement or [pedestrian] traffic. In such a strategic location as Mamilla, it could have been different. We did not accomplish much in terms of Jerusalem's urban development," Gonen said. Though the city can levy high municipal taxes on such apartments which boost public coffers, once per year visitors are not enough to contribute to the economic basis of shops and businesses that depend on the presence of a local population, Gonen said. But an industry source familiar with the current wave of foreign resident purchases in Jerusalem rejected these concerns. As opposed to David's Village, "which is a real ghost town," towers already standing adjacent to the Jerusalem of Gold site do not stand empty, he said. "Jerusalem of Gold will be more of a mix, and those buying today come more often," the source added. He estimated that, on average, the structure will be around 50% full, depending on the time of year. "That's fair," he said. Shechter himself said that some Jerusalem of Gold buyers say they expect to live in the apartment for four months each year, while others say they already plan to move in permanently and are buying into the project in preparation for their eventual aliya. He expects permanent residents, eventually, will account for roughly half of buyers in the project. Jerusalem planning council head Pollack agreed. "Ultimately, no one buys an apartment and leaves it empty." "These are residents with means who will contribute to Jerusalem's economy. We welcome their arrival. And if they decide to rent their apartments out to students, that is also good for us," Pollack said. Prestige choices Israeli citizen-residents also are expressing interest in the project, though Shechter said none have finalized a purchase thus far. Which leads to the question: Where is the Israeli elite buying its luxury apartments? Prof. Gonen pointed to luxury projects in Tel Aviv and its suburbs - such as Caesaria's seaside villas. "Wealthy Jerusalemites buy there as well," he noted. Jerusalem does enjoy some prestige among well-to-do natives, with religious and haredi Israelis as attracted by the city's particular "added value" as traditional Jews abroad. Secular elites, on the other hand, demonstrate a clear preference for the Tel Aviv area. "Jerusalem today is built on the religious population. The city's religious significance keeps many people in Jerusalem," with central neighborhoods in Jerusalem becoming the domain of relatively wealthy religious Jews, Gonen said. Shechter said that the project has also been contacted by Jerusalem natives eager to come back to their city without compromising a luxurious life style - often from the nicer suburbs - in addition to more religiously traditional Israelis. They have just been slower to make the purchase than the overseas residents, who come to town motivated to buy a place quickly, he said. Attracting locals Barshishat and Allalu believe that building smaller residential units would make it possible for locals to move downtown, as well, with Barshishat suggesting regulators should require a minimum percentage of smaller apartments per project. Allalu added that the target audience for housing in the city center would naturally be students, empty nesters, and "possibly small families," though he doubts that middle-class Israeli families with children would find downtown attractive to live since there are few public services. Yet, both Gonen and Barshishat believe that gentrification by locals is possible in Jerusalem's city center, as has happened elsewhere. "Today there is a varied population that wants to come live in the city center, as we have also seen in Tel Aviv's city center," Gonen said. "The problem is not whether it's possible or not, but that it is not being done. Not enough is being done to locate the demand among local residents." Nevertheless, other professionals argue that the prices that can be obtained from foreign residents make it worthwhile to develop only luxury apartments in downtown Jerusalem. Shechter himself sees no contradiction between his project and the desire to rejuvenate the city center, noting that his company's Gan Ha'ir project on Tel Aviv's Kikar Rabin induced construction and the migration of young people into the immediate area. Jerusalem of Gold and the plans to develop the center and bring in students are part of the same overall trend, he said. "Ultimately, the city center will be vibrant and full of young people," he promised.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS