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A luxury housing project in southeast Jerusalem with panoramic views of the Temple Mount is attracting dozens of wealthy American Jews looking to have a foothold in Jerusalem. But some real estate experts in the capital say that the developers are intentionally unloading the project on eager, but ignorant, overseas buyers who do not necessarily understand the city's geography, the political implications of such a move, or the fact that landowners in the area have appealed to the Supreme Court in a last-ditch effort to stop the project.

Apartments in Nof Zion, in the Jabel Mukaber area of East Jerusalem, are fetching hundreds of thousands of dollars from buyers overseas with promises of exclusivity and a view reminiscent of the days when King David walked the city. With its first stage slated for completion by October 2007, Nof Zion is advertised as a gated community with 400 spacious apartments facing the Old City. A five-star hotel, a shopping center, a country club, synagogues, a mikveh and other amenities suited to their clientele of predominantly wealthy religious American Jews are being planned as well.

The project's Web site describes the location as being near the "Israeli Arab village of Jabel Mukaber" and "just a 10-minute drive to the city center, Great Synagogue, King David Hotel and other major sites." So far, the project - which is also described as "a real bargain considering its extraordinary location" - has been marketed only to Jews from abroad.

"In all of Jerusalem, you can't have a view like this and that's a fact," says Yehuda Levi, director general and one of the owners of Digal Investments and Holdings Ltd, the publicly traded company behind Nof Zion. "Our buyers are not political and we're not political - these are people who want beautiful, modern, spacious housing with incredible views of the Old City and the Judean desert. They've been here before, they've seen what they are buying, and politics has nothing to do with this."

But the project, formerly known as Nof Zahav, is located just past the Goldman Promenade in an area that Jerusalem lawyer Daniel Seidemann, who is affiliated with the Israeli NGO Ir Amim, describes as "downtown Jabel Mukaber." And residents of the village, which is within Jerusalem's municipal borders, are not "Israeli Arabs." They hold Jerusalem identity cards, not Israeli citizenship, and as such, will be voting in the Palestinian Authority elections next week.

Building for Nof Zion has already begun and the project is situated on a slope, two sides of which will border on homes in Jabel Mukaber. The building site lies below the Goldman Promenade; to the south is East Talpiot, or Armon Hanatziv, the growing Israeli neighborhood that Nof Zion promoters point to as part of an expanding Jewish presence in this part of Jerusalem.

It's not a second Rehavia

Mohammad Gbara, a lawyer representing some of the villagers in homes adjacent to the building site, insists that the foreign buyers do not realize that their dream apartment will be "in the heart" of an Arab village.

"Nof Zion is described as a Garden of Eden, or as a second Rehavia, but what's not advertised is that it's part of East Jerusalem," Gbara noted. "No one tells them [the foreign buyers] that they will be in the middle of Jabel Mukaber and very close to Arabs." (Upscale Rehavia is one of Jerusalem's oldest Jewish neighborhoods.)

So far, one-third of the 91 apartments in the first building stage have been sold, all of them to Jews from abroad, with prices ranging from $350,000 to $560,000. Buyers are mostly religious professionals - doctors, lawyers, and accountants - who live throughout the year in urban Jewish centers, like New York, Miami and Los Angeles.

"Most of our buyers are familiar with this area," insists Levi. "People don't buy apartments over the Internet."

But some real estate developers say that the foreign buyers are unaware of the politics in this divided city, and as a result, are buying into a project they don't really understand. "Israelis won't buy property there and so they're dumping it on the American market," said one prominent real estate developer, who asked to remain unnamed. "Americans buying [in Nof Zion] don't understand where they're putting their money and they are intentionally being 100 percent misled. This is a project that's all about people wanting to make money off the American fad of buying apartments in Israel. The Nof Zion buyers are investors who don't understand the politics of what they are buying. They come, they see fabulous views, they're told that the Arabs are happy, and so they buy. It's not a political statement, because for them, it's the same thing as Talbieh, but cheaper. The problem is that the project is being marketed as mainstream."

Apartments in Nof Zion, the source added, are "being sold by a woman in Miami who has never even lived in Israel."

One potential American buyer, who also asked to go unnamed and is still considering purchasing a Nof Zion apartment, said that several friends in his modern Orthodox community had already bought apartments in the luxury development. "It's a chance to get an apartment in Jerusalem at a price I can afford and it seems like a good investment," said the potential buyer, who was not told about the legal proceedings regarding the project.

"I didn't realize that it was a problematic location. We were told that it would be `the place to live' and that within five to eight years it would be the center of things, a much better neighborhood than it is now. We were also told that the apartments will more than double in value within five years, and will be worth over a million dollars," he said.

Nof Zion is slated to cover some 115 dunams, part of which belonged to Jewish landowners, and part of which the Jerusalem municipality expropriated from several Arab landowners in the Jabel Mukaber area. Though some of the residents have already been financially compensated, two major landowners appealed the expropriation on grounds that it was illegal, since it was only Arab land, they claimed, that was taken for "green areas" and set aside for public use.

The case was brought before the Jerusalem District Court, which ruled in favor of the municipality's expropriation. Lawyers for the two landowners filed an appeal to the Supreme Court, meanwhile, in a last-ditch effort to stop the building. The parties currently are in the process of mediation.

"Claims of unlawful expropriation have been rejected by the court," said Jerusalem Municipality spokesman, Gidi Schmerling.

Once the issue is resolved in mediation, all that remains to be obtained are the final approvals for constructing the residential buildings, which Levi, of Digal, expects in the "coming days."

As part of the sales pitch, overseas investors are told that Nof Zion is a welcome addition to the predominantly Arab area. The access roads are being improved and widened, trees will be planted, green parks with benches and walkways will be added to the landscape, and the well-maintained Promenade will be extended into the Jabel Mukaber area.

According to the investors behind the project, the villagers welcome the new development, since Nof Zion will bring improved services for water, electricity, and sewage.

`No one is happy about it'

But a brief stroll around Jabel Mukaber revealed that residents bordering on the building site are hardly waiting with open arms.

"No one is happy about this project," says Hassan Zehayka, who runs a grocery store near Nof Zion and wears his kaffiyeh as a scarf. "They say that we'll get better services like water and plumbing, but I doubt that anything will change. If there's an improvement, it will be only for the Jews."

Further down the road, Mahmoud Bedat agrees. "It's like putting an Arab village right in the middle of Rishon Letzion," Bedat, a long-time Jabel Mukaber resident, says of the project. "They say that we'll get better roads, but who needs good roads if our children won't have anywhere to live?"

Projects like Nof Zion are part of a larger real estate boom in Jerusalem fueled, in large part, by overseas buyers looking to invest in the Israeli economy, while gaining a vacation home here in the process. Prices have increased in some cases by as much as 40 percent in central areas like Talbieh, Rehavia, Katamon, the German Colony and Baka, driving many Israelis out of the city in search of more affordable living. In Talbieh, for example, apartments are being sold for about $10,000 per square meter. Prices in Nof Zion, meanwhile, are a third of that, estimated to be about $3,000 per square meter.

"People have the impression that American buyers have limitless pockets, but that's not true," says Paysi Golomb, director of Kehillot Tehilla, a non-profit organization that helps North American buyers purchase homes in Israel and is also promoting Nof Zion. "In Jerusalem, the most sought-after spot is close to the Old City, without too many stairs, and with a sukkah balcony. There aren't too many of those kinds of apartments left at reasonable prices."

Nof Zion, he says, has "one of the most beautiful views in the world" but also costs "significantly less" than some of the other projects. It's an attractive combination for overseas buyers with limited funds, he says. "Potential buyers come and see the place, and for some the location bothers them and for others it doesn't," he added.

In their pitch to American buyers, Nof Zion promoters have pointed to Abu Tor, the mixed Jerusalem neighborhood with Jewish and Arab sections.

"Many of our buyers don't understand the layout of Jerusalem and so we explain to them that the city is like a checkerboard, in terms of Arab neighborhoods and Jewish neighborhoods," says Yaakov Simkovitz, an agent for Anglo-Saxon Real Estate who is selling apartments in Nof Zion. "We'll take them on a tour of Abu Tor and then show them Nof Zion, which isn't very different."

Next month, local advertising for Nof Zion will begin, with the hopes of creating a mixed Israeli-American community that won't stand empty after the tourists have returned home. The foreign investors, meanwhile, have been told that Israelis will buy the lower floors at lower prices, leaving the breathtaking views of the Old City available on the higher floors for the project's American clientele.

"We're trying to get a balance of half Israelis, half foreign buyers," Simkovitz, the Anglo-Saxon agent, said. "It's important to us that Nof Zion does not become a ghost town."

 
 
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