Jerusalem's Waldorf-Astoria project at risk of cancellation

Expiration of Investment Center permit granting 20% of $150 million budget for construction of prestigious hotel in Israel puts whole project at risk. Tourism Ministry calls for renewal of permit

The construction of the prestigious Waldorf-Astoria hotel in Jerusalem set to open in 2010 is at risk.

 

The project, headed by IPC Jerusalem Ltd, may be frozen, since its approved enterprise permit at the Israel Investment Center has expired. The IIC's grant program ensured the entrepreneurs $30 million - 20% of the total cost of the $150 million project.

 

IPC Jerusalem, which is owned by the Reichmann family, is still in the beginning stages of the project, and therefore has not been eligible to take advantage of the grant.

 

According to the Encouragement of Capital Investment Law, the approved enterprise permit is valid for a seven-year period. During this time, the grant is given according to the project's progress.

 

The construction of the hotel is still in initial stages, and at this point, the only work done is the demolition of the inside of the building, with the façade of the historical Palace Hotel construction site remaining intact for restoration.

 

Therefore, IPC has not yet been eligible to collect the grants. Furthermore, the law does not allow the automatic renewal of the approved enterprise permit, meaning the company will not benefit from the State's grants.

 

Yedioth Ahronoth newspaper recently learned that the Industry, Trade and Labor Ministry made an exceptional request to the Finance Ministry asking that the permit be renewed.

 

The Tourism Ministry's appeal to the Industry, Trade and Labor Ministry for the renewal of the permit argued that the delay in the project was caused by external circumstances.

 

The appeal said since the Industry, Trade and Labor Ministry that was housed in the building for many years, evacuated three years later than planned, those three years should not be included in the seven-year period.