By Carl Hoffman, JPost—

Would it surprise you to learn that the Knesset – our governing body, symbol of sovereignty, and hub of national political power – sits on land that the State of Israel does not in fact own? Would you also be taken aback to discover that the same thing can be said about the Prime Minister’s Residence?

Are you perhaps wondering why these and other iconic locales in Jerusalem are on land that Israel does not own, who owns them if not Israel, and how this came to be?

Well, consider the place we are talking about, a place perhaps like no other in the world. This is a city that at one time or another has been occupied, besieged, invaded, lost, or retaken by Canaanites, Jebusites, Israelites, Assyrians, Babylonians, Persians, Judeans, Seleucid Greeks, Judeans again, Romans, Byzantines, Arabs, Crusaders, Arabs again, Mamelukes, Ottomans, British and Israelis. It is a city that is a sacred pilgrimage destination for adherents of Judaism, Islam, and more varieties of Christianity than you can count on your fingers and toes.

Jerusalem is the declared eternal capital of one country, Israel, as well as that of Palestine, a country that does not actually exist. It is a city loved so intensely that it has driven – and continues to drive – some people insane.

The answer, then, to the question of who owns Jerusalem can be stated in two words: It’s complicated. For a city like this, how can it be anything else? One thing can be said with certainty, however. The issue of land ownership in the Holy City is not about Jews vs Arabs, the State of Israel vs the Palestinian Authority, or even Judaism vs Islam. Rather, the issue is about the residents of Jerusalem vs the legacy of history, or more specifically, vs Christian churches and, lately, a few very astute – some might say rapacious – private investors.

MUCH OF the current population of Jerusalem is living on land that is owned by various Christian church denominations. While part of the Baka neighborhood and French Square belongs to the Franciscan order, and some of the Mount of Olives is owned by the Russian Orthodox Church, the lion’s share – more than 60% – of church holdings in Jerusalem belong to the Greek Orthodox Patriarchate, including Rehavia, Talbiyeh, much of Katamon and Rassco, parts of Givat Ram, all of Nayot, as well as Liberty Bell Park, the Valley of the Cross, the area between the Yemin Moshe neighborhood and the King David Hotel, a portion of Keren Hayesod Street, part of the Mamilla Mall, as well as part of the land on which sit the Israel Museum, the Prime Minister’s Residence, the President’s Residence, the Knesset Building, the Chief Rabbinate and the Great Synagogue, among others.

How did this come to pass? We can perhaps best understand this by first looking at old photographs, drawings, paintings or engravings of Jerusalem in the 19th century. Any of these will do. We see a crowded, densely populated Old City with closely built houses and dark narrow alleys crammed within its walls, and almost nothing outside the walls but seemingly empty, arid rolling hills.

The overall picture these images create for us is of a city that was a largely ignored, uncared for and neglected backwater for hundreds of years. Confined within walls and gates that were shut and locked every evening at dusk, Jerusalem was inhabited by a population that lived amidst ruins and rubbish, packed within roughly 20% of the area within the walls.

At the start of the 19th century, the city was a remote and not terribly important outpost of the Ottoman Empire, with a total population of no more than 9,000. Jerusalem, along with the rest of the Holy Land, was significant mainly to the religious. And while Jews lived here, or came in small numbers from the Diaspora for varying lengths of time, and although the Greek Orthodox Patriarchate, the Ethiopian Church and the Catholic Franciscan Order each maintained a presence here for centuries, travel to Jerusalem and the Holy Land was difficult, dangerous and beyond the hopes of many who wished to come here.

Then two things happened in the 19th century. The first thing was technological: The invention and development of railroads and steamships made travel to the Holy Land much easier, especially from Europe. The second was political: Egypt invaded the Holy Land in 1832 and unceremoniously grabbed it away from the Ottomans.

Eight years later, the British came and grabbed it away from the Egyptians, drove the Egyptians back to Egypt and gave the Holy Land back to the Ottomans.

As if that weren’t enough, in 1853 the combined forces of Britain and France came to the Ottomans’ rescue in the Crimean War, siding with whom they referred to as the “Sick Old Man of Europe” against the armies of Tsarist Russia.

Not surprisingly, these “acts of kindness” on behalf of the Ottomans drastically changed this Muslim regime’s attitude toward both the European powers and to the Christian world in general. In relatively short order, the Ottomans permitted the establishment of a Catholic Patriarchate in Jerusalem; strengthened its ties with the Greek Orthodox Patriarchate that was already there; gave foreign powers autonomous and almost sovereign rights within the Holy Land; and encouraged them to establish autonomous communities around the area to which each foreign power could send consuls and delegates.

Most of these, as it happened, were clergy of various Christian denominations.

Anticipating tens of thousands of Christians coming on pilgrimage to the Holy Land – enabled by railroads, steamships and the now more liberal policies of the Ottoman government – these Christian groups began buying not only small parcels of land within the walled city, but also large swaths of land outside the walls. These groups included, among others, the Anglican Church of England, the Lutheran Church of Germany, the Young Men’s Christian Association (YMCA) from the US, as well as the Greek Orthodox Church, which saw itself as the successor of the Byzantines and was thus particularly driven to “regain” the Holy Land. From 1860 onwards, the same steamships that were bringing Christians were also bringing significant numbers of Jews, who began to build residential neighborhoods outside the Old City walls.

NOW HERE is where the story gets interesting. As the city began to attract more residents and seriously started to grow, the churches began to realize that the lands they bought – and were still buying – could be lucrative sources of revenue. They thus began to lease portions of their enormous land holdings for the construction of residential and commercial buildings, not only in Jerusalem but throughout Ottoman and later British Mandate Palestine. The Greek Orthodox Church in particular found itself in rather dire financial straits in the 1920s. Prohibited by church rules against selling its land outright, it instead leased most of its land to the Keren Kayemeth LeIsrael-Jewish National Fund and received a sizable payment upfront in exchange for the Jewish community’s right to use the land on a long-term basis.

By the time the State of Israel was created in 1948, a sizable if not precisely known number of residential, commercial, governmental, cultural and religious buildings in Israel had been built on land owned by Christian church denominations – not only in Jerusalem but also in Haifa, Lod, Ramle and Jaffa.

What happened next set in motion a chain of events that has led to the hodgepodge of bewildering claims of land ownership, lease rights and use rights that we face today. By the 1950s we can already see a match, albeit an imperfect one, between a new country that needed land to accommodate immigrants and develop new capital, and a Greek Orthodox Patriarchate that needed money without either the willingness or ability to sell its real estate outright.

In 1952 the Patriarchate signed an agreement deal that left it with formal ownership of its land in Jerusalem, with the KKL-JNF obtaining all rights to use and develop the land through a long-term lease of 99 years, valid until the year 2051. The agreement furthermore entitled the KKL-JNF to sublease the land to private investors and developers, who immediately began constructing various kinds of buildings, including tens of thousands of residential units.

SO FAR, so good, right? However, the agreement also clearly stipulated that the land – along with the properties built on the land – would completely revert to the Greek Orthodox Patriarchate when the lease runs out in 2051. The original terms allowed the KKL-JNF to sublease the land to various developers, which built on the properties – including thousands of homes. But the original lease stated that the Patriarchate would once again receive the full and sole rights to the properties when the lease runs out in 2051.

However far in the future 2051 may have seemed in 1952, the fledgling Israeli government began conducting quiet negotiations with former Patriarch Diodoros I in an attempt to persuade him to extend the lease for another century, until 2151. These negotiations went on for decades, with the Patriarch refusing to sign an agreement, mostly because of pressure from Palestinian groups who accused Israel of trying to “judaize” Jerusalem.

An agreement was almost reached in the year 2000 to extend the lease in return for $20 million – with a letter of intent actually signed. Yet the agreement was canceled when an aging and ailing Patriarch Diodoros claimed that he and the church had been defrauded; he was reported to have claimed that negotiations had taken place under false pretenses. As it turned out, the two men negotiating on behalf of the KKL-JNF fooled everyone, taking the $20m. for themselves. They were eventually arrested, tried and convicted, with one later acquitted by the Supreme Court on grounds of reasonable doubt. Not only was most of the money never found but, more importantly, the leases were not extended.

So matters stood until May 2011 when the Greek Orthodox Church, under Patriarch Theophilos III, sold most of its Jerusalem land leasing rites to a group of Jewish private investors, both in Israel and abroad.

The deal, signed by the Patriarch himself, includes hundreds of hectares of land in such upscale neighborhoods as Rehavia, Talbiyeh, Baka and Katamon, and gives the investors rights of ownership on the land when the current leases expire in 2051. This group of shrewd investors includes the Ben-David family, a prominent and very wealthy Jerusalem family. Parcels of land not sold to this group remain largely in the hands of the KKL-JNF or the church itself.

One initial reaction to news of this deal was that of relief, as many rejoiced at the fact that the Land of Israel’s “eternal capital” would at least remain in Jewish, and not Palestinian, hands. As the ramifications of the agreement began to sink in, however, Jerusalem homeowners began to grapple with the possibility of having to sell their homes for a pittance – if they could sell them at all, be forced to pay exorbitant purchase or rental prices to the investors and developers when the latter assume ownership in 2051, or lose their homes entirely when the current 99-year lease agreement expires. Nothing quite focuses the mind like the threat of eviction.

As one would expect, while some segments of the population look forward to the future with uncertainty and fear, others see those fears as sources of opportunity.

Residents of Katamon, for example, recently found English-language fliers in their mailboxes: “Are you a resident of Rehavia, Nayot, Talbiyeh or Katamon? You will be wise to enquire whether your property will remain yours! If you, too, are concerned about the legal status of your property and are unsure whether it is leased from the Jewish National Fund or the church, you are advised to consult the Land Rights Company Inc. (registration pending). The company, which represents many potential injured parties, will help you look into the legal status of your property. With the aid of the most experienced experts in the field here in Israel, the company will obtain the best conditions for extending your lease.”

AMONG THE “expert consultants” listed in the flier are the law firm of E. S. Shimron, I. Molho and Persky & Co. Advocate Shimron forthrightly tells In Jerusalem, “Our clients are dealing with some of these special lease holders. We have conducted many meetings with some of them. All of the meetings have been preliminary meetings; we do not yet have contractual agreements. At this stage we are not really contractually connected to them. We had preliminary meetings with them to assess how our clients might proceed. We did not sign anyone yet.”

Asked what his or any law firm can do for these homeowners, once they are in fact signed as clients, Shimron replies, “We don’t have a certainty about a possible outcome we can bring. We can explain it. I’ve told the people we have met, I’ve been very clear about that. The thing is, we are trying. There’s a problem to assess the probability of really achieving the outcome, which is to find an extension of the sublease agreement that they hold. We are still considering how to approach with an offer. It’s not a simple issue and we’re being very clear and honest about it.”

Any law firm attempting to represent Jerusalem homeowners indeed has its work cut out for it.

“Some have to deal with private entities, others directly with the Church and others with KKL-JNF,” Shimron explains.

“One of the complexities here is that it’s not one shape. You have differences in the chain. Some are connected to the church itself, some to KKL-JNF, some to the private lease holders. There are also differences in the lease periods.”

It is thus understandable that when asked whether or not he would advise a friend or family member to buy a house or flat in Jerusalem right now, Shimron would not give an unequivocal answer either way.

Far more definite is real-estate agent Alyssa Friedland, who last November wrote in The Jerusalem Post, “The Ben-David family bought a large number of church-owned leases about three years ago for an estimated NIS 80,000. These were leases owned by the Greek Orthodox Church, and affect hundreds of owners.

“An anonymous group bought about a hectare of church land in the Givat Oranim neighborhood recently as well. Gan Rehavia, which was built on land leased from the Ratisbonne Monastery back in 1936, also with a 99-year lease due to expire in 2035, is home to more than 40 homeowners. Residents of this complex have already tried to negotiate with the developers who bought the lease, but to no avail. The outlook for the owners of these properties is bleak. They are in essence being held hostage by these investors/ developers, since no one will buy properties shrouded in much uncertainty.”

Asked by In Jerusalem whether anything has changed since that grim assessment, she replies, “Nothing has changed as far as the Ben-David family deciding to give any kind of amount. That’s what we were hoping for – that the Ben-David family, which bought up a lot of the leases, would give some kind of indication of what they would charge when the leases expired and had to be renewed – but they’re not.

“If they were to give some kind of an idea, even if it’s a high number, we could at least tell a seller, ‘This is what you’re going to have to be stuck with if you sell,’ or tell a buyer, ‘This is all you’re going to have to pay to renew it.’ That would make it so much easier.

People who buy and sell want some kind of a number, so that they aren’t surprised. The only way to have that number is for the Ben-David family to give us an idea.

“Right now, people are not attracted to purchase the property, because of this big unknown question mark that’s going to happen in about 35 years. That’s a short period of time in the life of a property.

For a buyer who in let’s say 15 years wants to sell, there’s only 15 years or so years left on the lease. They’re saying to themselves, ‘Oh my gosh, who’s going to buy it from me, with this big unknown in 15 years?’ A buyer is saying to himself, ‘What’s the resale value going to be in 15 years?’ It’s very difficult to sell church land right now. Very, very difficult.”

Which finally brings us back to our original question of who owns Jerusalem. The best answer to that question at present is everyone – and ultimately no one.