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Retreats along Israel’s coast snaring high-end buyers

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Message: If you are having trouble reading this email, you may view this article online at: http://www.jweekly.com/18615/full/18615/retreats-along-israel-s-coast-snaring-high-end-buyers/ Retreats along Israel’s coast snaring high-end buyers Friday, October 11, 2002 | by JESSICA STEINBERG JERUSALEM—With a succession of marinas opening along the 112-mile Israeli coastline, developers' plans to sell homes by the sea are finally coming to fruition. The high-end market of vacation apartments is witnessing steady business despite the country-wide economic slowdown. From Ashkelon and Ashdod, to Herzliya, Haifa and Hadera, high-rises, villages and villas are being built and sold to those with some extra cash to burn. "It's super-accepted worldwide," said Nati Gilboa, vice president of the real-estate development company Mivnei Gazit. "You build marinas and people live there." In Herzliya, north of Tel Aviv, Gazit and the Ofer Brothers group developed Marina Village, the first of five projects for the exclusive marina, which will eventually have 1,200 apartments in a combination of residential developments. With 120 units, Marina Village features garden apartments and second-floor flats that face the marina, the sea or the inner courtyard. The apartments are small, but well suited for a single person or a couple without children. There is 24-hour security, laundry, cleaning and gardening services for an extra fee, an outdoor pool and gym facilities, as well as a Jacuzzi. Out on the marina are three restaurants, a spa and a water-sports store. "People from Herzliya Pituah bought here," said Gilboa, referring to the exclusive nearby neighborhood that is home to several embassies, as well as the U.S. ambassador's residence. "They want it for weekends and for holidays." The prices range from $240,000 for a garden apartment facing the inner courtyard to $320,000 for dwellings located along the marina boardwalk. Docking fees for boats and yachts range from $2,000 to $3,000 a year. Given the current real-estate slowdown, prices have dropped to about $220,000 for the last 20 apartments that are still available, according to Gilboa. But not all potential buyers wanted to be a "pioneer," particularly given some legal complications. The land for Marina Village was first purchased in 1995 from the government, but within a year the developers were entangled in a civil lawsuit with several environmental groups crusading to preserve the coastline. By the end of 1999, the Tel Aviv District Court ruled that even though apartments were already built and sold, any dwelling located close to the marina shoreline is public property and must be considered a hotel-style rental apartment. As a result, marina apartment owners who purchased their homes after the lawsuit cutoff date have to lease their flats for rental to the general public for part of the year. It's not a problem for most of the Marina Village owners, who bought before the lawsuit, but it is an issue at other projects in the Herzliya marina as well as at other marinas up and down the coast. In Haifa, at the soaring Carmel Beach Towers, the owners found another way to get around the vacation apartment problem. They made it into a solution. "We were in a major bind about what to do with the lawsuit," explained Uri Oren, who handles marketing for the project. "We couldn't sell apartments until we had a clear explanation of what is a vacation apartment." According to the current law, a holiday apartment has to be available at least six months a year. Working in partnership with Le Meridien hotel chain, the owners built twin 18-floor hotels and are now selling hotel rooms at prices ranging from $107,000 for a one-room suite to $400,000 for a two-bedroom suite with large balconies. Hotel-apartment owners are considered partners in the project, and can use their apartment for up to 60 days each year, or a room in any other Meridien project worldwide. Given the tough economic times and unease about security, project managers tried to offer a deal that would be financially palatable to the Israeli public. Investors need a down payment of at least $10,000, and can take a flexible mortgage for the remainder. For the first five years, investors receive a 4 percent return on their investment. After then, buyers receive a portion of the hotels' profits. "We changed the approach," Oren said. "We're expanding the concept of a holiday apartment." Once the project is completed, Carmel Beach Towers will include 1,200 units along a mile of Haifa's coast. About half of the 286 apartments now available in the twin towers have been sold. The suites are furnished and some have balconies overlooking the sea. All the rooms come with a kitchenette, and the larger suites have a living-room area and an expanded kitchen. "The value of this area is going to skyrocket," claimed one agent for the project. "No one else is allowed to build around here, right on the water." And if a potential buyer wants to check out the space before putting money down, it costs $114 to $135 for a double room for the weekend.

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