The Mivne Group claimed on its Facebook page that it ‘donated’ an alternative building for the Israel Police in Sderot, after the station there was destroyed in fighting with Hamas. Last week, the police were granted emergency funding of 8.4 million shekels ($2.1 million) to rent the building for three years – which appears to be higher than the average rent in the area. The Finance Ministry insists that it’s a reasonable price. A Shomrim exposé
The Mivne Group, the public Israeli company which announced that it has “donated” an alternate building to replace the police station in Sderot that was severely damaged in fighting between Israeli forces and Hamas, will charge the state 230,000 shekels ($57,000) a month to use it. A cursory comparison of real estate prices shows that this is significantly higher than the average price of office space in the area. Although, it is important to point out that the building in question includes a fully equipped kitchen, stores and other amenities, so a direct comparison is not easy. Earlier this week, the government’s accommodation authority earmarked emergency funding of 8.4 million shekels ($2.1 million) to rent the structure for three years and payments are due to begin next month.
Immediately after being contacted by Shomrim, Mivne removed the Facebook post in which it claimed that it had “donated” the building to the police.
It Costs Less in Be’er Sheva
The Sderot police station was destroyed on the first day of fighting, following an intense battle that claimed the lives of some of the officers serving there. Given the urgent need to find an alternative location for the city’s police force, several options were considered. Officers had already moved into the new building – a 3,000 square meter structure in the Sapirim Industrial Zone, which is owned by Mivne – by Thursday.
At the ceremony inaugurating the new station, police chief Kobi Shabtai said that “when I saw the results of the destruction of the Sderot station, I knew that we needed a new one as soon as possible. A police station is the symbol of order, a symbol of sovereignty. It is a symbol of power and revitalization.”
The majority shareholder in the Mivne Group is businessman David Fuhrer. The company published a post on its Facebook page about the new police station, saying that “the building has been donated to help the Israel Police” and that “the Mivne Group immediately donated a temporary facility that it owns in the city.”
According to Shomrim’s investigation, however, the building in question had been unoccupied for several months after its previous occupant – a well-established high-tech company – vacated it. The payment approved – 8.4 million shekels for three years – works out at 77 shekels per square meter a month, for a total of 233,000 shekels a month.
Realtors in Sderot say that this is a relatively high price for the area, but add that, because of the special characteristics of the building and the lack of similar buildings in Sderot, it is hard to make a direct comparison. At the same time, looking at the buildings on offer in Sderot reveals those offices with around 1,000 square meters in a new and modern building in Sderot – but without the fancy add-ons and furniture that Mivne’s building offers – are being rented out for 35 shekels per square meter. Offices with a similar level of high-quality materials but which are significantly smaller (between 100 and 500 square meters) go for around 35 shekels per square meter.
Real estate prices in Be’er Sheva, the largest city in the south where there is a relatively high supply of office space, range on average between 45 and 65 shekels per square meter, depending on the condition of the property.
Mivne’s response: It’s a top-class property
During the discussions over approval of the special budget for renting the building, it came to light that the three-year contract for the rental was “the minimum period that the company offering the building would accept after negotiations.” The contract also allows the state to extend the contract for an additional two years if there are delays in the construction of a permanent station in Sderot. It was also stated at the meeting that “the property on offer is also fully suited to the needs of the police” and that “according to the government’s accommodation authority, the price is reasonable considering the good condition of the building and its suitability for police needs and compared to the cost of other buildings in the same area.”
A spokesperson for the Mivne Group refused to divulge how much the company requested from the police for rental of the building. In a written response, the company told Shomrim that “given the state of war that Israel finds itself in and the problems facing the Israel Police in Sderot, the company immediately provided police with another property that it owns in Sderot, which allowed it to continue its operations during this challenging time.
“We provided this property immediately without a signed contract and without payment, until the sides could enter into a binding agreement and if the police decide that the building suits its needs in the longer term. From this stage and until a binding contract was signed, the building was provided without payment. Mivne employees rallied round and came from all corners of the country to get the building ready for police teams to enter; they displayed great courage in doing their jobs under the threat of rocket fire. This is a top-class property, it’s of the highest standard and it’s fully furnished and equipped. According to the police minutes and the Accountant General, as presented to the exemptions committee: ‘The price being offered is reasonable given the condition of the property and compared to prices in the area.’
“At this difficult time, we are all focused on everyone rallying round to bolster the economy and Israeli society. We can only wish that everyone would act in the same way. We all hope and pray for quieter days, and soon.”
The Finance Ministry, under the auspices of which the public accommodation authority falls, refused to explain how it reached the total of 8.4 million shekels for the rental. “The Finance Ministry does not answer questions about costs and prices of rental agreements. The agreed-upon price was examined and found to be reasonable for the high-quality property in question, which is fully suited to the needs of the police and it includes rental, management fees, as well as cleaning and maintenance costs for three years.”