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Residents lost a suit to stop the leasing of Beit Rothschild to a yeshiva.

Last month, after seven years of protests and legal proceedings, residents of the Jewish Quarter were finally able to breathe a sigh of relief. State Attorney-General Menahem Mazuz voided a controversial agreement between the Company for the Reconstruction and Development of the Jewish Quarter and Aish Hatorah for transfer of the neighborhood's archeological garden and 800-year-old German hospice complex to Aish Hatorah Yeshiva for use as a beit midrash (study hall). The ruling was in response to a suit was brought by the Jerusalem Foundation, represented by lawyer Boaz Arad, to the High Court of Justice. In 1999, the company signed a long-term leasing agreement, in effect a sale, with Aish Hatorah, which won the tender for the property. At the time, Eric Coopersmith of Aish Hatorah told In Jerusalem that Aish paid $150,000 for the property. In the mid-1970s, at the request of the company, the Jerusalem Foundation raised $250,000 from a German donor to establish the archeological garden. In a letter dated March 12, 1976, then-acting director of the company, D. Zifroni, wrote to the foundation: "With respect to the donation which you have given us for the purpose of establishing an archeological garden, I hereby confirm the purpose of this area - as a public park. We will not initiate any changes in the designation of this area. The park will be held by us and we will fully maintain it." The agreement was one of several controversial leasings or rentings of public buildings or spaces in recent years by the company. These deals raised the ire of Jewish Quarter residents who felt the fine balance between residential and institutional areas in the neighborhood was being upset. Residents went to court to stop the long-term leasing of Beit Rothschild, one of the neighborhood's largest and most beautiful buildings, to Talmud Torah Ner L'Rahel U'Baneiha (Zilberman) but lost this suit. In his decision, Mazuz did not relate to the letter between the foundation and the company. He severely criticized the company's management, saying that it "lacked the authority" and that the agreement was "unreasonable and was in opposition to public administrative procedures." Mazuz noted that fault in the agreement stems from the special nature of the site on one hand and the yeshiva on the other. "The combination of the two makes the leasing agreement null and void." He cited the fact that the area, containing St. Maria's Church, the last remains of German crusaders in the city, is one with historic and Christian importance. "The decision to allocate this site to a yeshiva should be nullified and its results canceled. The yeshiva is a non-profit with Jewish religious goals and these goals are incompatible with the nature of the site." The company released a statement saying that the board of directors and the director have changed since the tender was issued and the agreement signed. The new board was asked to cancel the agreement, but after serious discussions decided it wasn't possible to cancel decisions made by the previous board. However, it will accept court decisions regarding the matter.