Selling official residence, US leaves next envoy without a home away from home

Expansive Herzliya abode was sold to Adelsons in apparent bid to keep embassy in Jerusalem, but new digs, in former Jerusalem consulate, are not fit for an ambassador, sources say

The US ambassador's residence ahead of a Fourth of July party in 2013. (US Embassy)
The US ambassador's residence ahead of a Fourth of July party in 2013. (US Embassy)

For years, US ambassadors to Israel have made themselves at home in one of the country’s nicest spreads, a deluxe 1.2 acre (five dunam) property in a tony neighborhood on a small cliff overlooking the sparkling blue Mediterranean.

The next US ambassador to Israel may not only be shut out of that residence, in the coastal town of Herzliya just north of Tel Aviv — but may find they don’t have an adequate place in Israel to call home at all.

That’s because the Donald Trump administration, in one of its final acts, has sold the Herzliya property to one of the president’s biggest donors, casino magnate Sheldon Adelson. According to sources familiar with the matter, part of the reason for the sale was to “seal” the May 2018 transfer of the embassy to Jerusalem and keep a future US administration from moving it back to Tel Aviv.

The sale will officially take effect in March 2021, by which time US President-Elect Joe Biden will likely have named his nominee for the ambassador post. Depending on how long confirmation hearings take, the new ambassador could arrive in Israel by May or June 2021.

But the ostensible new official home, on Agron Street in Jerusalem, is widely seen as unfit for a permanent ambassadorial residence unless serious work is done, and the new ambassador may end up renting a property in the Tel Aviv area anyway.

“It is a shame that the sale of the Herzliya residence was done hastily without thinking about the consequences of the process,” said one person with close knowledge of the deal.

A US flag flies at the official residence of the US Ambassador to Israel in the central Israeli city of Herzliya, September 9, 2020. (AP/Sebastian Scheiner)

In a statement, the US State Department said that the property was put on the market in January 2020 following “a review of both existing and available diplomatic property in Israel to determine the best alignment to support the US Mission” after the embassy transfer.

Adelson, a Republican mega-donor who also owns the free Israel Hayom daily, was reportedly one of the main people behind the push to transfer the embassy from Tel Aviv to the Israeli capital Jerusalem, heavily lobbying Trump to go forward with the move. His purchase of the property, which has not been acknowledged by the US State Department, was first reported by the Globes financial daily in August.

An Independence Day Party at the US Ambassador’s Residence in Herzliya in 2017. (US Embassy)

Israeli Tax Authority documents show that the buyer paid NIS 230 million ($67 million according to the conversion rate at the time) for the thousand-square-meter (10,760-square-foot) residence, the largest residential real estate deal in the country’s history.

The sale also gives Adelson the property’s large grassy lawn, which for decades has been the scene of ritzy Fourth of July blowouts and other social events hosted by the US envoy, backdropped spectacularly by the Middle Eastern sun dipping slowly into the azure sea.

‘Not ideal’

Ambassador David Friedman said in 2017 that he planned to live and work in Jerusalem, though he has used the Herzliya home at least part-time, including after the embassy transfer and the sale agreement.

But for nearly half of his term, the official residence has been a 150-year-old building on Agron Street in Jerusalem that had previously housed the Palestinian Affairs section of the US consulate.

In March 2019, the State Department merged the consulate with the embassy in the capital’s Talpiot neighborhood, sending Palestinians there instead, and declared the Agron Street building the official ambassadorial residence.

This March 4, 2019, photo shows the United States consulate building in Jerusalem. (AP/Ariel Schalit)

Friedman never moved into the Agron building, using it only for a few formal events and a few overnight stays, and since the coronavirus pandemic hit in March 2020, there have not been any events anyway.

The building’s top-floor living quarters had been used to house the official residence of the Consul General to Jerusalem, whose main job was working with the Palestinians. Nonetheless, it is widely seen as unfit for an ambassadorial residence.

Built in 1868 by the German missionary Ferdinand Vester, the Agron House was one of the first buildings constructed outside of the Old City’s Walls. The location — near the Prime Minister’s Residence, downtown Jerusalem, Independence Park and the Old City — is considered prime real estate, but bringing the small living quarters up to ambassadorial standards would require massive renovation work, sources familiar with the matter told The Times of Israel.

The property is “modest, not ideal for a family, and is very old,” one source said.

There’s also the fact that Biden has said publicly that he plans on reinstalling a consul general in Jerusalem as an envoy to the Palestinians, bringing the US back in line with the many Western countries — including Spain, Italy, France, Great Britain, the Netherlands and Greece — that maintain a formal representative separate from the ambassador.

U.S. Middle East envoy George Mitchell, right, meets with Palestinian Authority Prime Minister Salam Fayyad, left, at the US Consulate in Jerusalem, January 29, 2009. (AP/Leon Neal)

“Rolling back the decision to close the Agron Consulate and re-nominate a new American consul to the Palestinians may be more complicated than what people think,” said a person familiar with the matter, speaking on condition of anonymity. “It is something that the US and Israel need to negotiate, as a new consul will need a security detail and credentials. Even with Biden’s campaign promise, it will be more challenging than thought.”

Of course, this envoy to the Palestinians will need a place to live and the natural location would be the abode of all of their predecessors.

Long commutes and hotel stays

Schooling for the children of the next ambassador to Israel may also be an issue, according to people familiar with the matter.

Friedman and most of his predecessors sent their children to the Walworth Barbour American International School in Even Yehuda, a short way from Herzliya, but a long commute from Jerusalem at 86 kilometers (53 miles) away.

The school is considered among the only viable options for those seeking a high-standard American K-12 education. A Jerusalem branch of the school exists, but it only goes to eighth grade and is much smaller.

In this February 21, 2012 photo, students sit at the American International school in Even Yehuda, Israel. (AP/Oded Balilty)

“If the next ambassador has school-aged kids and wants them to study at the American School in Even Yehuda, then it is a huge problem,” a source familiar with the matter said.

The school is one reason that Friedman has continued to split his time between Jerusalem and Herzliya. His wife Tammy continued to live there with their youngest daughter so long as she was in high school at Walworth Barbour.

When not in Herzliya, Friedman has spent much of his time in an executive suite at the King David Hotel in Jerusalem, or occasionally at other hotels. He also spent a night here and there at the Agron Street residence, according to sources with knowledge of the matter.

The King David hotel in downtown Jerusalem (Abir Sultan/Flash 90)

As part of an arrangement in place for over 20 years, the King David maintains a specific suite for US ambassadors based on a monthly rate. In some years, during the High Holidays and high tourist season, the hotel may revoke the rental agreement and market the suite to others.

Due to security concerns, the ambassador’s specific whereabouts are usually kept under wraps. The concerns also likely kept him and his family from his private residence, owned since before he was ambassador, in the capital’s Talbieh neighborhood, not far from Agron Street.

Money pit

In September, it was reported by the Daily Beast that the House Foreign Affairs Committee was probing how Adelson, one of Trump’s biggest donors, came to be the winning bidder in Israel’s most expensive residential real-estate transaction ever.

Concerns revolved around whether the deal followed federal guidelines for the sale of US government property and if it was rushed through for political reasons.

Adelson is not Israeli, but his wife Miriam was born in Israel; both are frequent visitors to the country and are seen as close to Prime Minister Benjamin Netanyahu. As massive donors to the Republican Party, the Adelsons have been frequent guests at the glitzy American Independence Day parties at the residence.

An Independence Day Party at the US Ambassador’s Residence in Herzliya in 2017. (US Embassy)

With a net worth of $36 billion, according to Forbes, they are also among the handful of people with an interest in Israel’s pricey real estate scene that can afford the property.

The State Department has never acknowledged who bought the property and did not even disclose the sale until the August report in Globes, which came out after the deal was apparently finalized.

Israel’s land registry has published a legal property transfer note, according to which a Delaware LLC named Bayit by the Sea has a lien on the property in Herzliya, meaning it is pending taking ownership. Bayit by the Sea, which will be the legal owner of the residence, is an entity founded on April 27, 2020, apparently controlled by Adelson.

Chairman and chief executive officer of the Las Vegas Sands Corporation Sheldon Adelson, center, and his wife Miriam arrive ahead of the inauguration of the US embassy in Jerusalem on May 14, 2018. (AFP/Menahem KAHANA)

According to reports in the Hebrew press, the purchase tax alone on the home may add an estimated NIS 20 million to state coffers.

It likely also earned a pretty penny for realtor Amy Link Givati, of Cushman-Wakefield, a global commercial real estate services firm based in Chicago with a local agency in Israel, according to the sources familiar with the sale.

From left, Tammy Friedman, Ambassador David Friedman, Prime Minister Benjamin Netanyahu and Sara Netanyahu toasting at an Independence Day Party at the ambassador’s residence in Herzliya in 2017. (US Embassy)

Realtors generally earn 2 percent commission on real estate deals (excluding the value-added tax), though it is usually lowered to 0.5%-1% on large transactions. With the lower rate, the firm likely earned NIS 1.15 million to NIS 2.3 million ($337,000 – $674,000) on the deal,

Link-Givati refused to comment to The Times of Israel and referred questions to the US embassy.

The embassy said in response that “Israeli realtors under contract with the US Government marketed the property in concert with Israeli lawyers also under contract to the US Government and both worked closely with US Embassy officials to finalize the sale in accordance with both the Department’s property disposal procedures and local Israeli law. The sales process was open and transparent and included professional appraisals and advice to maximize value. The buyer was selected solely on the basis that they submitted the highest offer.”

A symbolic end

A home is just a home, but for many, the elegant, stately Herzliya residence, on one of the choicest plots of land in the country, was both a symbol of American might and a token of the strong, close relationship between the US and Israel. To some, the loss of the residence means the relegation of the next ambassador to a state of figurative homelessness.

The Adelson deal is irreversible, meaning the next ambassador to Israel will not even be able to rent the property from the new owners unless the State Department asks to lease the property on a temporary basis while it searches for an appropriate alternative. US officials familiar with the matter say that is an unlikely scenario.

Tammy Friedman, left, Ambassador David Friedman, second left, and former ambassador Dan Shapiro, right, at the ambassador’s residence in Herzliya in 2017. (US Embassy)

Instead, the State Department will likely search for a new residence near Tel Aviv or rent an additional hotel executive suite, on top of the Jerusalem one.

A person with close knowledge of the matter told The Times of Israel that the State Department will have to explore rental properties in Herzliya or other areas nearby such as north Tel Aviv to accommodate its top diplomat.

“It will have to be a house detached enough from its surroundings, plausible for security standards,” the person said. “Though the State Department may waive some of the security requirements — or the ambassador will have no home.”

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