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Introduction: The Battle Beneath the Surface
Jerusalem, one of the most contested and symbolic cities in the world, is now witnessing a high-stakes real estate battle that could reshape its landscape forever. At the heart of this controversy is a 500-dunam stretch of prime land in central Jerusalem, encompassing cultural and national landmarks like the Israel Museum, the Great Synagogue, and the King David Hotel. The key players? The Jewish National Fund (JNF), American real estate mogul Gary Barnett, and hundreds of residents who fear they may lose not just their homes, but their legal standing as property holders.
The unfolding drama isnāt just a bureaucratic
From the Synagogue to the Museum: A Deal That Could Change Jerusalem
In a leaked draft agreement obtained by Calcalist, the JNF appears to be preparing to give up its long-held lease on 500 dunams of central Jerusalem land in exchange for a bundle of culturally significant properties currently owned by U.S. developer Gary Barnettās Extell Israel. This proposed trade includes historic sites such as the Israel Museum, the Great Synagogue, and Heichal Shlomo.
The JNF, which has held these lands on lease from the Greek Orthodox Church since 1951, is under pressure as the current agreement nears expiration. Although the lease was extended in 2000 to 2050 with an option for another 50 years, renewing it would cost tens of millions of shekelsāstill far below the current value of the land, now worth billions.
Gary Barnett, who bought the rights from the heirs of philanthropist Dan David for NIS 750 million in 2023, wants to capitalize on development potential. His plan includes fast-tracking construction on 12 vacant plots to build thousands of apartments and implementing a massive urban renewal scheme. He has offered residents the chance to buy their apartments at below-market prices and participate in redevelopment, but many have refused, arguing that they already own their homes.
Under the proposed deal, Barnett would transfer key symbolic sites to the JNF and extend the subleases of around 900 families to 2100. However, this would strip the JNF of its legal hold on the land and leave residents at the mercy of Extell, which would no longer need to consult the JNF on development plans.
Tenant representatives are outraged, seeing this move as a betrayal. They accuse the JNF of abandoning public responsibility and fear the deal is being rushed through to pre-empt new legislation that might protect their rights. A petition is being prepared to demand transparency from the JNF and prevent the agreement from being quietly finalized.
Meanwhile, Extell argues it is the only party capable of delivering a long-term solution that maintains residents in their homes while unlocking billions in value. The JNF has responded vaguely, stating that it is working toward the best outcome without disclosing specifics.
What Undercode Say: An Analytical Breakdown of the Real Estate Drama
A Crisis of Trust Between Citizens and Institutions
This situation exposes a deeper trust issue between Jerusalemās residents and the institutions meant to protect them. The JNF, once seen as a guardian of public land and national interest, now faces accusations of backroom dealing. If the organization relinquishes its lease, it may be signaling a shift away from its founding principles toward pragmatism driven by financial efficiency.
Urban Renewal or Urban Uprooting?
Gary Barnettās proposed urban renewal project sounds promising on paperāoffering residents new apartments and infrastructure. But residents see it differently: a forced sale wrapped in sugar-coated language. Asking homeowners to pay up to NIS 5,000 per square meter for homes they believe they already own introduces financial strain and legal ambiguity. The development may benefit future investors and luxury buyers more than current residents.
Symbolic Assets vs. Strategic Land
The land swap at the heart of this deal pits tangible, highly valuable land against culturally significant but non-revenue-generating assets. While acquiring sites like the Israel Museum has symbolic importance for the JNF, it raises questions: is the trade fair, or is the state undervaluing strategic land to gain prestigious but financially burdensome properties?
Legal Vacuum and Policy Failure
The legal ambiguity regarding sublease rights has been a festering issue for decades. The fact that this problem has escalated to such a major conflict is a testament to the failure of policymakers to create a consistent framework protecting tenants. This legal gray area is now being exploited in what appears to be a well-orchestrated business move.
Political Timing: A Tactic?
The suspicious timing of the draft agreementājust as legislators push for tenant-protection lawsāsuggests strategic maneuvering. Finalizing the deal now could pre-empt any protections, effectively bypassing democratic checks and public scrutiny.
A Market-Backed Developer
Barnettās credibility in financial markets bolsters his position. His past bond offerings have been well received, and current yields suggest market confidence. This means heās not just a speculatorāheās backed by serious capital and experience. That could make him a formidable opponent for under-resourced residents or slow-moving public institutions.
ā Fact Checker Results
JNF’s lease rights: Verified. JNF leases from the Greek Orthodox Church, not full ownership. ā
Barnettās land acquisition: Confirmed. Purchased rights from Dan David heirs for NIS 750 million. ā
Resident ownership claims: Legally ambiguous. They hold subleases, not direct ownership. ā ļø
š® Prediction
If this deal goes through as drafted, Jerusalem is likely to see a wave of high-end development in the Rehavia and Talbiya neighborhoods. While the JNF may secure cultural assets, residents will face growing pressure to join renewal schemes or risk losing favorable terms. Politically, this could catalyze legislative efforts to redefine tenant rights and regulate land leasing in Israel more robustly. Expect public backlash, court challenges, and a national conversation about who truly controls the land in Israelās most treasured city.
References:
Reported By: calcalistechcom_bb500eb9567efde8698c2b3d
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