'In times of global uncertainty, Jerusalem is a secure investment'

"Jerusalem represents an attractive place for investment, in particular in real estate," outgoing Jerusalem Mayor Uri Lupolianski says.

Uri Lupoliananski 88 248 (photo credit: Ariel Jerozolimski)
Uri Lupoliananski 88 248
(photo credit: Ariel Jerozolimski)
Even with the global financial crisis and expectations of an economic slowdown, outgoing Jerusalem Mayor Uri Lupolianski is confident people will continue to invest in the capital. "At a time of a financial crisis and much uncertainty around the world, Jerusalem represents an attractive place for investment, in particular in real estate, because of its uniqueness," Lupolianski told The Jerusalem Post in a recent interview. "There is no other place like Jerusalem, which makes it a secure investment." As City Hall prepares to welcoming incoming mayor Nir Barkat, Lupolianski looks back at five years of efforts to make the Holy City attractive to business and investors. In 2003, Lupolianski, of United Torah Judaism's Degel Hatorah faction, became the capital's first haredi mayor. "When I started, the municipality was in a dire crisis, so to make a difference for the city I had to clean up within the house first by implementing a recovery plan," Lupolianski said. "As part of an internal reorganization plan, we had to lay off more than 1,000 employees, representing a third of the total work force, and cut the salaries of senior staff by 15 percent. We managed to implement these measures in full without any strike action. When there is a crisis, everyone understands that they are all in the same boat." The Jerusalem Municipality's 2008 budget is NIS 3.17 billion, according to the Dun & Bradstreet business information agency. "Due to the municipality's activities, the deficit was reduced from NIS 112 million in 2003 to a surplus of NIS 7m. in 2007. In addition, the total or aggregate deficit was reduced from NIS 534m. to NIS 330m. during the same period," according to the Dun's 100 report. Lupolianski, 57, said he had quietly extinguished many potential fires behind the scenes to strengthen the economy and revive tourism in the city. "I personally approached businesses, providing them with a range of tax benefits, incentives and grants to come to Jerusalem," he said. "We brought hi-tech companies to Jerusalem that had call centers in India. I didn't invent anything, I just connected the relevant parties and linked them to the business potential of the capital. The municipality has also instituted an incentive program for hi-tech workers to move their homes to the city. Over the past 10 years, 385 new factories were established in Jerusalem." Jerusalem has turned into a center for biotechnology, Lupolianski said. "About 35% of all biotechnology companies in Israel and 43% of all research and development centers for biotechnology are based in the capital, and a large chunk of medical research is done here," he said. Still, the number of jobs in Jerusalem did not increase substantially over the past few years. The number of people working in factories, hi-tech and biotech companies rose by 18%, from 20,150 in 2003 to 23,750 in 2007; they work in more than 1,100 companies located in and around Jerusalem. Among the most prominent companies with business activities in the capital are Teva Pharmaceuticals Industries Ltd., Intel, NDS and Red Communications. "When I started, tourism in the capital was very low in terms of hotel stays," Lupolianski said. "We launched a tourism package advertising the special sites in Jerusalem, which helped to double the number of guests at the capital's hotels over the past five years from 556,200 in 2002 to 1.2 million in 2007. But this was only possible as tensions and strikes were kept under control in the city. On a regular basis I sat with Christian community representatives and heads of all the different communities to calm any tensions." Many Jerusalem residents have been leaving the capital in recent years, many of them well-educated adults under age 35, both secular and national religious, who belong to the middle-to-upper classes. The main reasons for their departure are limited job options and ballooning property prices as more and more foreigners buy apartments in the capital. "As a result of cutting red tape, construction starts have risen by 25%, from 1,749 in 2003 to 2,200 in 2007," Lupolianski said. "Yes, housing prices have increased, but I am against limiting the number of foreigners buying homes in Jerusalem. Foreigners and new immigrants are a good thing. They are good for the economy; for example, [Africa Israel Investments chairman] Lev Leviev, who after losing millions will continue to build apartment units." One project Lupolianski looks back on with some resentment is the long-delayed light-rail system. "The progress has not been enough," he said. "At the end of the day, though, the enormous economic impact of the railway will make us forget the delays." Lupolianski, who founded the Yad Sarah national volunteer organization, said he was eager to continue working in the public sector.