Failed Hotel Project in Yokneam Leaves Developer with 50 Million Shekel Debt

A decade-old attempt to build the first hotel in Yokneam has ended in financial failure, with the real estate company Lee Marshall left with debts nearing 50 million shekels. The project, initiated around 2013 and approved for a land-use change in 2019, aimed to construct a mixed-use complex including a 40-50 room hotel, commercial spaces, offices, a conference hall, spa, and gym on a 3.8-dunam plot in Yokneam's industrial zone. The estimated investment was about 120 million shekels, funded through a dedicated partnership fund.

However, the project was halted in 2020 due to safety restrictions related to the site's proximity to an Elbit Systems factory. Regulatory demands required the hotel to be moved six meters further from the factory, complicating construction plans. Lee Marshall then revised the plan to replace the hotel with an office building, but this alternative also stalled amid financing difficulties.

Currently, Lee Marshall is exploring two options: bringing in a partner to inject capital or selling the land. The recent expansion of Nvidia in northern Israel, including a new campus in nearby Kiryat Tivon, may affect the land's value positively. Nvidia already operates a large center in Yokneam following its acquisition of Mellanox.

Financially, the delay has worsened Lee Marshall's position. Non-bank lender Menif holds two liens on the property securing debts of approximately 48 million shekels. Menif confirmed the developer's loan is in arrears and that it is prepared to enforce liens if necessary, while also negotiating with potential buyers. Menif, managed by Maor Doak, specializes in real estate financing and is currently under investor scrutiny due to a slowdown in the sector, with a loan portfolio of about 4 billion shekels and 1.3 billion shekels in loans with extended maturities.