In recent months, there has been a noticeable trend of advancing urban renewal projects in cities in northern Israel. One of the pioneering companies in this direction is Av-Gad, which won seven tenant tenders in the last quarter, in projects in the Krayot and Nazareth Illit, with an estimated scope of about 4,000 housing units. Moreover, the company is currently exploring additional projects in Karmiel and other nearby cities.
Attorney Re’em Ratzon, CEO of Av-Gad, explains the trend: "The company sees northern Israel as a significant growth engine for the coming years. We are expanding our activities in the Krayot area, with new projects in Kiryat Ata, Kiryat Yam, Kiryat Motzkin, and Kiryat Bialik, understanding that significant government investments will be directed in the coming years to develop northern Israel, and we believe this will lead to increased demand for quality housing for young couples and homebuyers."
Av-Gad Holdings is an urban renewal and construction company founded in 2009 by Colonel (Res.) Michael Ratzon and his son, Attorney Re’em Ratzon. The company focuses on high-demand areas and brings substantial expertise in executing projects. Since its establishment, it has delivered approximately 657 housing units in about 20 projects. As of the third quarter of 2024, the company has accumulated about 11,000 housing units in execution and planning stages, 8,154 of which are in advanced stages.
Ratzon continues: "With the end of the war in the North, the rehabilitation of urban and community life in cities north of Haifa has become a significant part of our commitment as a business to act and contribute to the development of the northern region of Israel in the coming years. We believe that the combination of our extensive experience in urban renewal and the economic potential of the Haifa and Krayot areas will provide value both for local residents seeking modern housing solutions in the Haifa metropolitan area and for investors."
Re’em Ratzon is particularly referring to three new urban renewal projects that the company is leading in Kiryat Ata. Av-Gad announced its success in winning these projects last month. These join another project that the company won in recent weeks in Kiryat Yam, where it also received a notification from the tenants' representatives about its success in the tender. The four projects include about 2,400 new housing units in total. Additionally, last month, Av-Gad won tenant tenders for other projects in Acre, Kiryat Motzkin, and Kiryat Bialik, each with about 450 housing units, as well as another project in Nazareth Illit.
Data from the Urban Renewal Authority in the Housing Ministry for 2024 indicates that the authority is promoting projects in northern Israel and prefers to invest in them through agreements with local authorities, which provide financial compensation to developers of about 150,000 NIS for each new housing unit, improving the economic feasibility of the projects. In the past year, the authority has participated in projects in Afula, Migdal HaEmek, Tiberias, and Shlomi.
"In our meetings with local authorities in the North, there is a noticeable awakening on their part, indicating an understanding that urban renewal will benefit the residents,” Ratzon said. “Removing neighborhoods from the 1950s and building new neighborhoods with modern planning will contribute to improving quality of life and bringing in new populations. Local authorities, together with engineering departments and architects, understand the need for formulating local policies for urban renewal and are working on joint dialogue with residents and developers."
Magic on the Sea of Galilee
One of the unique projects the company is leading in northern Israel, and in the country overall, is the "Kinneret City" project, where the addition of 500 housing units has been approved by the regional committee, all overlooking the Sea of Galilee. The project includes a combination deal with a group of investors, including Zohar Oved, former mayor of Tiberias.
Kinneret City spans about 24 hectares and will include five hotels, a unique spa benefiting from natural spring waters, three residential buildings, a convention center, public areas, a commercial boulevard with stores and stands, and more.
Additionally, as part of the project, an open-air theater is expected to be built, which can accommodate about 3,500 people, with around 150 music performances a year. The company expects that the theater will become a central anchor for attracting audiences to northern Israel. Around the theater, about 60 hotel rooms overlooking the main stage will be built, in a unique configuration never seen before in Israel. Moreover, Av-Gad notes that it is currently in discussions with Yoni Feingold, one of the founders of Zappa, to lead the music activities.
Michael Ratzon, Chairman of Av-Gad, concludes: "Kinneret City is a national-scale project with private initiative that will change the city of Tiberias and dramatically advance the hotel industry in the Sea of Galilee region and northern Israel. This is a project that starts with a great vision, alongside an opportunity for employment and tourism momentum that will strengthen the entire northern region."
He also emphasizes that the project enjoys broad support from tourism authorities, planning authorities, and local authorities, including the Jordan Valley Regional Council and the Tiberias Municipality. This is alongside the recognition of the Tourism Ministry and Minister Chaim Katz of the growing need for hotel rooms in the Sea of Galilee region, while identifying the great potential of the Kinneret City project to promote both domestic and international tourism.
