Haifa Court Rejects Kiryat Yam's 1.25 Billion Shekel Development Levy Demand from Rafael

The Haifa District Court has dismissed a demand by the city of Kiryat Yam for Rafael, the Israeli defense company, to pay 1.25 billion shekels as a development levy for Rafael's "Makhon David" complex near the Iron Dome production site. Senior Judge Ron Sokol ruled largely in favor of Rafael, highlighting significant calculation errors, distortions, and unreasonable decisions by the municipality. The court found that the city attempted to unjustly enrich its coffers at the expense of the defense industry.

The "Makhon David" site, spanning approximately 6,000 dunams, was incorporated into Kiryat Yam's jurisdiction only in 2018 after previously being classified as Galilee land. Rafael independently built and financed all internal infrastructure within this closed complex. The court noted the absurdity of the city's demand, which equated to about 460 years of municipal levy collections, while the city collects only about 2.7 million shekels annually from all residents and businesses combined.

Judge Sokol sharply criticized the municipality's calculations, led by Mayor David Even Tzur, for basing them on dense residential neighborhoods with extensive public infrastructure, ignoring the unique nature of Rafael's mostly open land that does not require such services. The court also invalidated the city engineer's artificial classification of the entire city area as a single drainage zone and the misclassification of Rafael's complex as a residential district to justify levies for neighborhood parks and minor maintenance works irrelevant to Rafael.

The judge emphasized that development levies are intended to cover actual infrastructure costs, not to serve as indirect taxation to enrich municipal budgets. Ultimately, the court ordered the full cancellation of the payment demand and required Kiryat Yam to pay Rafael 100,000 shekels in legal fees. Rafael was represented by attorney Malka Engelsman from the Piron law firm.