Green light for 600 homes, 600 hotel rooms, offices, shops

Soho, Jerusalem: Huge plan puts old train station on track to be new city center

Developers of massive project around First Station include Erel Margalit and Rami Levy, each with acres of land to develop apartments, offices, hotels and retail space

Jessica Steinberg covers the Sabra scene from south to north and back to the center.

The southeastern view of the planned railway station development project in Jerusalem (Courtesy Jerusalem municipality)
The southeastern view of the planned railway station development project in Jerusalem (Courtesy Jerusalem municipality)

Jerusalem’s German Colony and Baka neighborhoods were once considered the sleepier side of the city, home to historic buildings, single-family homes and low-slung apartment buildings set along narrow streets and quiet shopping districts.

The area has grown in recent years, bolstered by the popularity of Emek Refaim Street, the growth of the nearby Talpiot industrial zone and the arrival of The First Station, a refurbished 19th century train station that brought restaurants, cultural events and tourism to the area, though it still retains a boutique aura away from the bustle of the city center.

Now a massive residential, office and hotel project is planned for this southern side of the city, bringing a series of mixed residential and commercial complexes intended to make this area a new center of Jerusalem.

“I see it as the Soho of Jerusalem,” said Avi Morduch, a developer behind one of the projects and the entrepreneur behind The First Station, as well as Tel Aviv’s refurbished Tachana complex.

One of the other developers, Erel Margalit, founder and chairman of Jerusalem Venture Partners, has a similar vision.

“Jerusalem needs a strong center,” said Margalit. “It’s going to be good for this area.”

The southwestern end of the planned railway station development project in Jerusalem (Courtesy Margalit Startup City)

The plan is made up of five projects comprising office buildings, hundreds of apartments, boutique hotels and retail space.

Spread out over 75 dunams (18.5 acres), it will encompass The First Station’s restaurants, shops and open areas, as well as spaces in the adjacent neighborhoods of Abu Tor, Baka and Talbieh, bordered by the western end of Bethlehem Road, Hebron Road and Miriam HaHashmonait Street.

The Jerusalem municipality recently gave the green light to the project, with a total of 600 apartment units, 600 hotel rooms and 250 assisted living units planned for the area.

Rakevet Hamoshava, the project being planned by developer and supermarket mogul Rami Levy with Morduch, will be spread over 13 dunams (around 3.2 acres), including the space used by the former HeChatzer restaurant and the historic building that houses the Schusterman Foundation’s Jerusalem offices, leading all the way to Bethlehem Road and the Mitz Petel fresh juice stand, beloved by locals.

“Mitz Petel isn’t going anywhere,” said Morduch. “We love it, too.”

Mitz Petel, the neighborhood juice stand on Bethlehem Road in Jerusalem, that will remain standing despite a major construction project in the area of the First Station (Jessica Steinberg/Times of Israel)

Rakevet Hamoshava will include a boutique hotel with 70 rooms, 3,000 square meters of commercial office space and 270 apartments, including what Morduch calls a Community building, a concept he also created in Tel Aviv, which offers smaller, less expensive apartments geared for young families and singles.

Margalit Startup City is Margalit’s substantial piece of the project, with 200 apartments, 10,000 square meters set aside for tech firms and startup offices and 4,000 square meters for retail space, extending from his own JVP complex, housed in the British Mandate-era Mint Building that he rented from the government for a period of 20 years, back in 2002.

Margalit sees the complex as an opportunity to create office space and employment opportunities in Jerusalem, particularly for cyber technology and food technology companies, as well as work spaces for companies that employ ultra-Orthodox programmers and for startup incubators.

There will also be space for JVP’s non-profit efforts, with a stand-alone public building dedicated to BaKehilla, JVP’s community organization that works with children and teens around Jerusalem, with programs run by shinshinim, 18-year-old volunteers who dedicate a year of national service before serving in the military.

Margalit wanted startups situated along a busy street, much like in Tel Aviv’s Rothschild Boulevard, where companies, city dwellers and tourists regularly mix on the boulevard and in its cafes.

Erel Margalit, founder of Jerusalem Venture Partners (Courtesy Shahar Azran)

The Jerusalem location falls in line with Margalit’s network of innovation centers, including one in New York City’s SoHo, opened in February 2020, as well as his Foodtech Center in the Galilee, the Cyber Center in Beersheva, and plans to expand to a major European city as well as Dubai or Abu Dhabi.

“There’s a difference between a technology park, like Har Hotzvim and Malcha, and a street campus that has a variety of leases,” said Margalit, referring to two business parks in Jerusalem. “It’s going to do good for the area around the compound, because otherwise this place is kind of isolated.”

One of the smaller compounds is being planned by the Israel Lands Authority, with several buildings of 5 to 10 floors, 200 apartments, 250 assisted living units and 6,000 square meters for offices and commercial space, as well as 2,500 meters for educational buildings, including kindergartens and synagogues.

Morduch said he planned on this kind of expansion 15 years ago when he first conceived of The First Station, and wanted to connect residents in nearby Baka and the German Colony.

“It’s a very good location, but we knew that it would take time,” said Morduch.

Change in this area came in waves, starting with the 2013 opening of The First Station complex in the Ottoman-era railway station and Isrotel’s Orient Hotel built at the edge of Jerusalem’s German Colony, followed by plans for the light rail to be constructed through the Emek Refaim shopping district, two changes that were alternately welcomed and battled by local residents.

The First Station quickly became an enclave for tourists and locals, and particularly for secular residents, as Jerusalem has become more religious, said Morduch. Several restaurants are not kosher and open on the Sabbath, alongside those that are kosher and closed on the Sabbath, creating a space that’s welcoming to different types of Jerusalemites, as well as tourists.

Avi Morduch, the entrepreneur who developed Tel Aviv’s Tachana and Jerusalem’s First Station, and is currently working with supermarket mogul Rami Levy on an expansion of the former railway complex (Jessica Steinberg/Times of Israel)

Residents have always fought to ensure that any new developments fit the character of the historic neighborhoods, and developers maintain that they are making sure to work within those guidelines.

There is one area of the project being called into question: Two orchards next to the historic Israel Electric plant on Bethlehem Road, visible from the Mesila path next to the First Station, but not accessible to the public.

A group of residents claims the orchards will be destroyed by the construction plans. According to a spokesperson from Margalit Startup City, the municipality team handling the project reviewed the orchards, determined which trees must be saved and will open the area to the public once construction is completed.

So far, however, no other protests have been made against the project.

The area was always seen as the right spot for a mix of residential and commercial use, situated as it is near the Jerusalem Cinematheque arthouse theater, the Khan Theater, Mishkenot Sha’ananim, Hansen House and other nearby cultural centers.

“I saw it as a locus for culture, with restaurants available for whoever’s going to those locations,” said Morduch.

While the coronavirus has “closed the faucets” on restaurants and culture, said Morduch, he is rethinking what should open in the commercial spaces, which will include what he calls “social spaces” where people can work and meet.

Right now, he’s turning the First Station’s large open area into one spacious cafe, where customers can sit wherever they want after buying food and drink from the surrounding purveyors.

Jerusalemites at The First Station, which mixed kosher and non-kosher, Shabbat and non-Shabbat activities in pre-COVID days (Yonatan Sindel/Flash 90)

“People don’t want to sit in crowded restaurants any longer,” said Morduch.

Jerusalem’s municipality has been trying to develop the area since 1974, said Sagi Kedem, general manager of Margalit Startup City.

Margalit first set up the offices for JVP in the historic mint building, renovating the space and adding a technology incubator and cultural center, Hamaabada, which was later rented by the Zappa chain of music clubs and has been adjoined by a series of different restaurants.

“There was nothing there, it was a disaster, but it was Erel’s vision that it’s a place that can change and become a center in Jerusalem,” said Kedem. “The goal was always to create more high-tech jobs and culture in Jerusalem.”

File: General view of the closed Isrotel Orient Hotel in Jerusalem on April 11, 2020, during a partial lockdown, in order to prevent the spread of coronavirus (Olivier Fitoussi/Flash90)

With plans to extend the light rail blue line to nearby Emek Refaim and situate a train station for the high-speed train between Jerusalem and Tel Aviv at the top end of The First Station, the entire area should open up, said Kedem. The parking lot for The First Station will expand from its current size of 250 spaces to 500 parking spots, accommodating the train station and the nearby cable car that’s also being planned.

“It will help people get to Tel Aviv so easily,” said Kedem of the planned train station.

The parking lot is also expected to accommodate visitors heading to the nearby cable car station being built between the Old City and West Jerusalem.

There won’t be any apartment or hotel towers, a battle already fought between Isrotel and local residents, who compromised on the relatively low height of the luxury hotel, located at the tip of the German Colony and adjacent to The First Station.

“The Orient did the hard work there and we’re building eight stories and six stories and maybe ten stories at some point,” said Margalit.

Margalit said he was less interested in building a hotel, but the municipality pushed for hotels in the area. His recent trip to Dubai, where he led a delegation of Israeli business leaders, is helping him hone in on what kind of hotel will be included in the campus, given that there are several developers — from Dubai and the US — who are eager to build in Jerusalem.

“It will be something young and hip and upper scale,” said Margalit. “That’s what we need in Jerusalem, where we have heritage but we need things that are lively and dynamic.”

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