58 Million Shekel Lawsuit Filed Against Haifa Municipality Over Carmel Housing Project Delays

The Gold Real Estate Group is suing the Haifa Municipality for 58.5 million shekels in damages due to a decades-long delay in advancing a plan known as 'Mordot Lincoln' and 'Tel Aharon' for the construction of approximately 2,850 apartments. The municipality's financial exposure is potentially much greater, as a successful lawsuit could set a precedent for further claims amounting to hundreds of millions of shekels.

The Gold Group owns about 7 dunams of land, which, upon approval of the new plan, would grant it the right to build dozens of apartments. However, these plots are only a small segment within a 700-dunam complex held by approximately 1,600 rights holders, most notably Shikun & Binui and the Gabay Group. Given the scale of the delays, other rights holders are likely to file similar lawsuits.

The 'Mordot Lincoln' plan is located on the western slopes of the Carmel near the Congress Center, west of HaRofe Street, between Freud Road and Nahal Azuv. The Gold Group purchased its plots in 2011 for approximately 79 million shekels. In the lawsuit filed in the Haifa District Court through attorney Lior Lahav, the company argues that the municipality and the local planning committee delayed the project despite the area being designated for residential use since the British Mandate period, and despite the District Court twice ordering the municipality to expedite the process.

The company claims damages totaling 31.9 million shekels through April 2026, representing the difference between the land's value if construction-ready and its current value. Additionally, it seeks 26.5 million shekels for lost alternative annual yield at a rate of 5%. Attorney Lahav told Calcalist: "A situation where a municipality ignores District Court rulings and is willing to bear the costs of compensation to developers is unacceptable. We expect the municipality to act with maximum speed to advance the plan and pay the compensation."

The lawsuit details decades of foot-dragging that persist despite court orders. In 2010, before purchasing the land, the company met with Mayor Yona Yahav and the then-city engineer, Ariel Waterman, and was assured the plan would be approved within two years. After the plan was deposited and faced hundreds of objections, the municipality changed its position in 2014, requesting reduced construction volumes. A 2015 agreement between landowners and the municipality to advance the plan was also not honored.

In September 2023, Haifa District Court President Judge Ron Shapira rejected a petition from landowners because the municipality had resumed work, but ordered the city to pay 60,000 shekels in costs and submit binding work schedules. The plan was submitted to the District Committee by the April 18, 2024, deadline, but more than two years later, no final decision on its deposit has been made.

The company alleges negligence, breach of statutory duty, and failure to meet the heightened standards of fairness and good faith required of a public authority. The Haifa Municipality stated: "The local planning and construction committee submitted a detailed master plan for the area in question more than a year ago. Since then, several discussions have been held in the District Planning and Construction Committee, but at this stage, no decision has been made regarding the deposit of the plan. It should be clarified that the Haifa Municipality or the local committee is not aware of any tort lawsuit pending against the committee in connection with this area."