The company won the tender
- On March 16,2016, the company won the tender, as stated in the winning notice sent by the economic company [Nat/3].
Subsequently, on March 22,2016, the Company signed a binding development agreement with the Municipality (hereinafter: the "Agreement" or the "Development Agreement") [P/5], for the construction of an assisted living home with at least 200 housing units (hereinafter: the "Project"), and then to lease the land to the Company for the purpose of developing and building an assisted living home that will include at least 200 housing units, and then leasing them to the Company for a period of 49 years, with an option for an additional 49 years (Clauses 2-3 of the Agreement).
According to the company, this was a substantial flagship project, which was expected to yield the company a profit of about ILS 6 million per year, for years and years, as detailed in the economic plan approved by the municipality [P/6] (paragraph 8 of the Wachter affidavit; paragraph 4 of the affidavit of the Davids).
Fulfillment of the conditions
- Regarding the change in the zoning plan, it was stated in the agreement (see clauses 7.4-7.7 of the agreement) that according to the existing zoning plan, the zoning of the land is the construction of an educational campus, public buildings and sports facilities, but the municipality undertook to act to change the zoning plan in a way that will enable the construction of protected housing on the land and complete the process of changing the zoning of the land within a period of 12 months from the date of signing the agreement.
It was also determined that the parties would cooperate when the municipality carried out all the necessary actions and the company would bear the costs of financing these activities.
As for obtaining the required approvals (the approval of the Municipal Council and the approval of the Ministry of the Interior), it was naturally the responsibility of the Municipality.
The agreement stipulates an 18-month period for the fulfillment of the suspension conditions, with the possibility of extending the deadline with the consent of the parties.
- It should be noted that even though the development agreement did not enter into force as long as the suspension conditions were not met, it was determined that already upon its signing, the company would pay the municipality a significant sum of usage fees in the amount of ILS 5 million, and would also provide the municipality with a performance guarantee (which was replaced by a personal guarantee) in the amount of ILS 1 million (paragraphs 16 and 19.1 of the agreement).
It was further determined (clause 7.3 of the agreement) that the company would begin carrying out the planning task immediately upon the signing of the agreement and before the suspension conditions were met.