The Haifa District Court has granted a petition filed by the Rafael company against the Kiryat Yam Municipality, canceling an extraordinary payment demand of NIS 1.245 billion for development levies regarding the 'David Institute' complex. The affair began in 2021, after a large area of approximately 6,000 dunams was annexed to the city's jurisdiction in 2018. The municipality demanded payments for paving roads, sidewalks, drainage, and public open spaces, but Rafael objected, arguing that the complex operates with internal infrastructure and is not similar to residential neighborhoods.
In his ruling, Judge Ron Sokol determined that the calculations used by the municipality to set the tariffs were flawed and led to an unreasonable result. The court noted that the municipality relied on data from residential neighborhoods to calculate levies for an industrial complex with different characteristics, where land areas are significantly larger relative to the built-up area. Judge Sokol described the demanded sum as 'imaginary,' considering the actual anticipated development costs for the property. Additionally, defects were found in the city's zoning for calculation purposes and in the nexus between the listed development works and the complex itself.
Despite the cancellation, the court clarified that this does not negate the authority of the Kiryat Yam Municipality to collect development levies from the company. Judge Sokol stated that the municipality is entitled to re-examine the issue and issue an updated payment demand, based on reasonable calculations that fit the characteristics of the complex and the findings of the judgment. As part of the decision, the Kiryat Yam Municipality was ordered to pay Rafael legal costs of NIS 100,000.
In response, the Kiryat Yam Municipality stated that it views it as highly important to establish the principle that Rafael is obligated to participate in the city's development costs, and added that it will act to correct the calculation in accordance with the court's guidelines. Conversely, attorneys Malka Engelsman and Ariel Ben-Besht of the Firon law firm, who represented Rafael, welcomed the ruling and argued that it reflects the unreasonableness of a financial demand that does not match the infrastructural reality of the complex and the absence of actual development work performed by the city for the company.