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

A decade ago, real estate company Lee Marshall initiated plans to build the first hotel in Yokneam, Israel, but the project was abandoned in 2020 due to safety restrictions related to the proximity of the site to an Elbit Systems factory. The planned development included a 40-50 room hotel alongside commercial and office spaces on a 3.8-dunam plot in Yokneam's industrial zone. The project had received local planning approval in 2019 and was estimated to cost around 120 million shekels, funded through a dedicated investment partnership.

However, regulatory demands required the hotel to be moved six meters away from the Elbit plant for safety reasons, which stalled the project. Lee Marshall then revised the plan to replace the hotel with an office building, but this too failed to progress due to financing difficulties. The company now faces debts close to 50 million shekels and is exploring options to bring in a partner or sell the land.

The financial strain has been exacerbated by delays, with the non-bank lender Manif holding first and second liens totaling approximately 48 million shekels against Lee Marshall. Manif confirmed the developer's loans are in arrears and stated it is prepared to enforce liens if necessary, while also negotiating with potential buyers interested in the land. The recent expansion of chipmaker Nvidia in northern Israel, including a new campus in nearby Kiryat Tivon, could affect the land's value, as Nvidia already operates a major center in Yokneam following its acquisition of Mellanox.

Manif, managed by Maor Doak and valued at about 1.5 billion shekels, specializes in real estate financing and currently holds a credit portfolio of around 4 billion shekels. Despite a slowdown in the real estate market, it has not yet significantly impacted Manif's results, though about 1.3 billion shekels of its loans have had their original repayment dates extended.