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ENTERTAINMENT COMPLEX SAILING INTO ISRAELI RESORT

The Sails, a retail-entertainment complex opening in the affluent Herzlya resort north of Tel Aviv, will have a gross leasable area of 25,000 square meters.

By Edmund Mander

Developers in Israel are pushing forward with a retail entertainment center they say will help turn a Mediterranean resort into the Riviera of the Middle East.

A consortium led by Israeli developer Motti Zisser has built one of the region’s largest marinas in Herzlya, an affluent resort a few miles north of Tel Aviv, big enough to accommodate 800 boats. Now the group is proceeding with a retail entertainment complex with 25,000 square meters (269,100 square feet) of gross leasable area that they say will draw people from all over Israel. The project — which has been named “The Sails” in Hebrew — will offer restaurants, stores, games and a theater.

“It’s the only thing that is near to being an entertainment center in Israel,” said Ben Hoffenberg, architect and spokesman for the developer, who has been involved with the marina project since its inception. Aiming for families and young customers, developers hope to open the $100 million center next year, offering a children’s play zone on the first floor and games for adults on the second. Entertainment will include simulators, discos, billiards, children’s rides and a theater, with stores interspersed throughout the center. Underneath the developers have built a three-level parking garage, while overhead there are two 10-story condominium towers, with another two towers on the drawing board.

If the location is Middle Eastern and the inspiration comes from the French Riviera, the style will be Italian, at least on the inside of the enclosed center. A “European street market” called Corso Mediterraneo will lead off from a central space inspired by Rome’s Spanish Steps, called “Piazza Herzlya,” Hoffenberg said.

The developers have hired Toronto-based Forrec Ltd., a planning and design firm specializing in themed attractions, to design the project, which is the first entertainment center in Israel, according to Bob Pavlich, project director with Forrec.

“This is why we’re quite excited about it,” he said, arguing that it will be a destination attraction.

The retail entertainment center is only one of several projects spawned by the approximately 350,000-square-meter marina. A handful of restaurants have opened, and developers are building 20,000 condominium units there. The newspaper Yediot Aharonot reported that Zisser spent $50 million on reclaiming coastal land for the marina, for which he received land worth $500 million. Large tracts were then sold to other developers who built apartments selling for up to $1.5 million.

The Ofer Bros., shipping magnates who have branched into residential, office and retail development, have built 120 luxury apartments, as well as a gym, swimming pool and other amenities.

This was not the first waterside project for Zisser, who has headed companies under various names, including Elscint Ltd., Merkazei Shlita and Marina Herzlya. He developed another marina further south in Ashkelon. The Sails is being developed by SLS Trust of Tel Aviv, which forms a part of Elscint.

But the going has been anything but smooth at Marina Herzlya; it has been dogged by delays, problems and a measure of scandal over the years and the conflicts are continuing.

It had a promising start. In 1988, then Herzlya Mayor Eli Landau, a colorful figure nicknamed “the bulldozer” and an enthusiastic marina proponent, waded into the Mediterranean and uncorked a bottle of champagne to inaugurate the project; Zisser and his colleagues had recently submitted the winning bid to the Israel Lands Administration and the local authorities to develop the project.

But within a few years Landau, Zisser and some of his partners were in criminal court, charged with fraud and breach of trust. Prosecutors said Zisser’s construction firm, Merkazei Shlita, had access to inside information on the bid process, and therefore should not have been allowed to bid; they also accused them of cutting corners by substituting a cheaper construction material for real stone in the marina without informing the Israel Lands Administration.

Following an 18-month trial, they were all acquitted in October 1995, with the judge ruling that prosecutors had not proved their case beyond a reasonable doubt. However, the judge criticized Landau for fiscal irregularities, and said the case left questions that “arouse wonder.” It was not Landau’s first brush with the law: During the 1980s he received a fine and suspended prison sentence for assaulting a policewoman, as reported in The Jerusalem Post.

Environmentalists also have weighed in against the project, claiming marinas are damaging the shoreline by disrupting the shift of sands and eroding beaches. Critics also find them socially undesirable, arguing that private marinas are denying access to Israel’s coastline to all but a very rich few. Last year more than 25,000 people signed a petition calling for beaches to be free and open to the public.

National authorities now are scrutinizing proposals much more closely, and have cancelled or reduced several proposed marinas along Israel’s coastline, overruling local authorities eager for the revenues these projects generate.

“There is a very, very strong movement against marinas and the reclaiming of land from the sea,” Hoffenberg said.

Hoffenberg contends that marinas have a minimal impact on coastline erosion, compared with other projects. Beach erosion began with Egypt’s construction of the Aswan High Dam, which was completed in 1970, and will be aggravated by the construction of a port in Palestinian-controlled Gaza, dwarfing any impact from the marinas, he said.

Elscint also has faced internal conflict in the form of a class action lawsuit filed by shareholders unhappy with the Zisser’s reinvention of the company as a hotel and resort developer and operator. Elscint, a subsidiary of Elbit Medical Imaging, had until 1999 focused on the manufacture of medical equipment. The shareholders’ action was dismissed.

The delays have forced some fundamental changes on the project. Original plans called for a regional mall on the site, but other malls sprung up nearby in the interim.

“It’s kept the thing in limbo for a long time,” Hoffenberg said. “Because of the proliferation of other shopping centers, it would be foolhardy just to build another.”

So, even though much of the building’s exterior was built, the developers decided to shift direction, and make it an entertainment destination. This has presented its own challenges, admitted Pavlich. Nevertheless, he said the center holds great promise for being the only one of its kind in the country.

But The Sails is not out of the woods yet. With Landau out of office, the project has not only lost a key supporter, it has gained a major critic in the form of new Mayor Yael German, who filed a lawsuit against the developers claiming they failed to fulfill their obligations in the marina’s construction.

In January, Zisser’s companies filed their own, 15,000-shekel, or $3.6 million, lawsuit against German, charging her with delaying the project and instructing local officials to cease public development around the marina, in violation of an agreement with the developer.

But developers say they are confident that the retail-entertainment project is on course for a 2002 opening.

Only a very few leases have been signed yet, and at press time the company wasn’t naming prospective tenants. Hoffenberg said the developer is shying away from large international chains because they already are represented in centers nearby. Instead, he said that he is going after smaller stores that would appeal to young people.

Hoffenberg said he also is hoping to have about 25 restaurants.

 

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