When you climb the stairs to the roof of the office building of the Pi Glilot Oil Pipe Terminals Company at the huge complex that straddles both sides of the border between Ramat Hasharon and northern Tel Aviv, it’s hard to ignore the pictures that line the corridors. Alongside the renderings of future projects for the complex, a picture from eight years ago is also displayed, showing one of the huge storage tanks at the site being used as an outdoor event venue.
For one night only in 2008, the storage tank was fitted out with a stage and colorful lighting, in honor of the second wedding of businessman Miki Dorsman (who was the first husband of Shari Arison, the controlling owner of Bank Hapoalim). The idea of holding a wedding inside a fuel storage tank was an original one when it comes to monetizing the space, and it seems quite a number of other celebrities would have been happy to follow suit – except that, after Dorsman’s wedding, no more weddings were allowed at Pi Glilot, and today the storage tank stands empty and unused.
Until 2007, the complex – known officially as Pi Glilot South – contained 11 fuel storage tanks. It was one of a number of such sites in Israel owned by the Pi Glilot company, which also maintained fuel terminals in Jerusalem, Ashdod and Be’er Sheva. Nine years ago, though, the Tel Aviv site was idled because it was decided that storing such large quantities of fuel near the center of Tel Aviv was a safety risk to a large number of people.
The steel from the fuel tanks was sold to Chinese companies, who used it for building the enormous infrastructure needed for the 2008 Olympic Games in Beijing, and the company’s three other fuel terminals were sold to Yitzhak Tshuva’s Delek Group. The Tel Aviv site – with its amazing real estate potential – remained in the hands of Pi Glilot, which is 50% owned by the government and 50% by another fuel company, Sonol, and a number of other firms and private investors.
The complex sits on 2,155 dunams (almost 540 acres) of open space between the Glilot and Kfar Hayarok interchanges, and alongside a number of Israel’s major highways. Of the total, 305 dunams are situated in Tel Aviv, while the rest are part of Ramat Hasharon.
Of the land, 1,500 dunams belong to the government, 355 dunams are owned privately – and the other 300 are a problem, as you will see later.
Here, in the middle of some of the most desirable land in Israel, you can find a huge undeveloped plot, some of which is still used by agricultural students from the nearby Hakfar Hayarok school to grow wheat. There are also some untouched nature spots with rare flowers and plants.
The Society for the Protection of Nature in Israel has been fighting to limit construction on the site, but to the west of the complex you can see the real estate potential: The new Blue luxury residential complex, where supermodel Bar Refaeli and her multimillionaire husband Adi Ezra live, is situated nearby. The Israel Land Authority is promoting a plan that will see the construction of between 9,000 to 12,000 new housing units in the area, which would double the population of Ramat Hasharon and add an entirely new neighborhood to Tel Aviv.
For now, Pi Glilot is home to a huge expanse of car lots. Car importers keep their inventories there before delivering them to customers, and other companies sell off secondhand cars. One employee says it will only take six months to empty the entire site once the bulldozers are ready to move in. But that day may still be a long way off – and even longer until we see it filled with luxury high-rises.
The new master plan for the site is expected to be submitted to the central regional planning and building committee in the next two weeks, with the committee only considering it in the first quarter of 2017. It will most likely take at least another year until the plan is approved, though detailed planning for parts of the site is simultaneously moving into high gear.
The enormous value of the land has led many to begin dreaming about becoming rich. Given the existing master plan, 1 dunam in this area is worth 5 million to 7 million shekels ($1.3 million to $1.8 million), says Itzik Tamir, CEO of the Trigo real estate firm, which owns land at the site. That is the price for now, because it is still zoned as agricultural land. In order for the complex to be really worth something, a number of legal complications have to be surmounted.
There is a hill on the southern section of the site, with a 300-dunam plot bordering on the prestigious Ramat Aviv neighborhood of Tel Aviv. The government gave this land to a hevra kadisha religious burial society more than 35 years ago. It was intended for a cemetery for local residents, but was never built. Today, this land is worth hundreds of millions of shekels.
At the time, the land was expropriated by the Finance Ministry, but for now enough burial spaces exist in the region based on existing plans, and the land authority says no cemetery needs to be built there.
Whether or not the cemetery is built, the burial society knows how much the land is worth and is trying to make sure it secures a large amount of this. Its management claims it bought the rights to the land – but never received it. In the past few weeks, a senior official at the Finance Ministry estimated that the ministry will have to pay some 200 million shekels to the burial society in compensation for the land. But the ministry spokesman has since said that the information regarding a compensation payment is not correct.
A source involved in the planning for the site says the law has changed, and the finance minister only has to sign in a new order and the land will return to the public.
But the burial society has filed a petition with the High Court of Justice on the matter. The court has hinted to the government that it might be a good idea to reach a compromise with the petitioner, the source said. The only question is how much, and he admits to concern that political pressure will intervene and the state will pay much more than it has to.
The Pi Glilot company has 187 dunams in the complex that it leases from the state, and has its own economic interests there. Last month, the company filed a lawsuit at Tel Aviv District Court seeking to stop the planning process.
Pi Glilot claims the land authority, which has divided the site into three parts, has violated its 2007 agreement with Pi Glilot, in which the company agreed to remove its storage facilities from the site. Pi Glilot says the present plan grants it fewer housing units on its land than the original agreement did. In addition, in the original plan these housing units were in the center of the project, while in the new plan they are in the northern section, with fewer building rights and a later date for development.
While all the parties deny that negotiations are being conducted, it’s clear that the only way to quickly resolve these and many other issues is to reach a compromise soon.
Even though the date on which anyone might move into an apartment at Pi Glilot is a long way off, you can already see ads online promoting investment in the land, as the various private companies that bought up some of the rights sell to individuals.
In January 2015, Paz Oil sold its share (21.5%) of the Pi Glilot South section, along with a privately owned plot of 34 dunams next to it, to a group of investors for about 250 million shekels. Five months ago, Trigo signed a deal with the Azrieli Group to buy its shares in the Pi Glilot company, along with other land, for 130 million shekels – and this land is already being sold off to private individuals.
Tamir says Trigo spells out to buyers that the land is not zoned or approved for construction, and is considered land for long-term investment (meaning at least five to seven years).
“All our buyers know exactly what is expected, and can only be pleasantly surprised,” he says. They will receive the land rights for an apartment when construction is approved. The price varies between 600,000 to 900,000 shekels, depending on where and what you buy, says Tamir.
Not everyone thinks such sales are a good idea. “It is the destruction of value,” says one person involved in the planning process for the site. The land is being divided up into so many small pieces, everybody is a boss and it is very hard to get any project going, he complains. “The suckers buying tiny plots of land could very well find themselves in a situation in which the project takes a huge amount of time, and, ultimately, this time will hurt the value of the investment,” he added.
As for the government, the concern is that, ultimately, yet another neighborhood of luxury high-rise towers will be built, which will in no way help ease the housing shortage for most Israelis and have no effect on lowering housing prices, either.
The land authority disagrees and says it is planning a complex with a huge 250 dunam park in the center and a wide variety of apartments at a range of prices.
Article source: http://www.haaretz.com/israel-news/business/1.752901