Kiryat Bialik Sues Israel Land Authority for $34 Million Over Housing Deal
The Kiryat Bialik Municipality has filed a lawsuit against the Israel Land Authority (ILA), demanding 34 million shekels (approximately $9.3 million USD) for alleged breaches of contract related to a "housing agreement" (Heskem Gag) for developing new neighborhoods in the city. The lawsuit, submitted to the Haifa District Court, claims the ILA failed to uphold its commitments, leaving Kiryat Bialik with inferior terms compared to other municipalities that signed similar agreements.
Kiryat Bialik was among the first local authorities to sign a housing agreement, aiming to absorb tens of thousands of new residents. The municipality asserts that the ILA provided a written guarantee that if other local authorities received more favorable terms in their agreements, Kiryat Bialik's contract would be adjusted accordingly. This assurance was a crucial condition for the city's agreement, according to the lawsuit.
However, the municipality alleges that the ILA has reneged on this promise. It claims that newer agreements granted other municipalities significantly better conditions, resulting in a substantial financial burden and deficit for Kiryat Bialik. Specific areas of disparity include funding for public and educational buildings, infrastructure development, management of the housing agreement, advances for future marketing, and city branding initiatives to attract new residents.
The lawsuit details that while other municipalities received between 12 to 30 million shekels for their housing agreement management bodies, Kiryat Bialik received only 4 million shekels. Furthermore, the city claims it receives a 6.5% management fee from apartment prices, compared to 7.5% for other municipalities, and a 0.5% fee for external contractor work, versus 1.5% elsewhere. The municipality argues these discrepancies directly hinder its ability to fulfill the housing agreement.
The ILA has previously stated that Kiryat Bialik received funding beyond the norm. A meeting in January 2020 between the former ILA Director-General and the Kiryat Bialik mayor reportedly saw the ILA claim the city was over-budgeted, an assertion the municipality vehemently denies in its lawsuit, calling it "utterly incorrect" and accusing the ILA of significant discrimination.
An addendum to the agreement in September 2020 promised an additional 49 million shekels, primarily for a city center project. By April 2021, the city estimated needing 90 million shekels for all housing agreement programs, a sum it did not possess. The municipality contends that despite requests and ILA promises over the years, little of what was pledged has materialized, while the ILA continued to ignore its commitment to equalize terms.
