Company for the Reconstruction and Development of the Jewish Quarter

The Company for the Reconstruction and Development of the Jewish Quarter is an Israeli state-owned enterprise created to rebuild and repopulate the Jewish Quarter of the Old City of Jerusalem after the area was placed under Israeli administration following the 1967 war. The government's decision to establish the company was made in July 1968, and the organization was formally established by January 1969. Its mandate was not that of a conventional commercial brand: it was created as a public development and heritage-management body intended to restore the Jewish Quarter as a national, religious, historical, and cultural site. The quarter covers approximately 134 dunams and includes the area around the Western Wall as well as residential, commercial, religious, archaeological, and public properties. In 1970, the Israel Land Administration leased the area to the company through a primary lease. The company then subleased residential units to occupants and administered development and allocation policies. During its principal reconstruction phase, which lasted from the late 1960s into the 1980s, it rehabilitated a severely deteriorated district and constructed approximately 500 apartments, 100 shops, and several public buildings. Its housing policy initially used eligibility criteria connected to Israeli citizenship, military service, and immigration status. The demographic balance later shifted, with the quarter becoming increasingly attractive to ultra-Orthodox and other religious families. The rebuilding program was politically and legally contested. Arab residents who had lived in the quarter were removed through expropriation procedures and received financial compensation, while some sought restoration of property rights through the Israeli courts. In Muhammad Sa'id Burqan v. Minister of Finance and others, the Supreme Court of Israel upheld the government's position in a case concerning a former Arab resident's claim, supporting the legal framework under which the quarter was reconstructed as a Jewish residential district. By the 1990s, the company's work had moved from large-scale reconstruction toward cleaning, maintenance, preservation, archaeological-site management, and smaller renovation projects. Its responsibilities have also extended beyond the Jewish Quarter in certain cases, including contracted maintenance and development work in parts of the Muslim Quarter. Heritage projects associated with the company include the restoration of the Hurva Synagogue, completed in 2010, the development of the Nea Church vaults as an archaeological site in the 1980s, and management of the Jerusalem Archaeological Park, also known as the Ophel Garden, from 2021. The company has repeatedly faced proposals for merger or dissolution because its original rebuilding mission was regarded as substantially complete. Recommendations to merge it with the East Jerusalem Development Company and Karta were approved in principle by the Knesset in the early 1980s but were not implemented. Later proposals followed controversies over property transactions, administrative duplication, and the question of whether its remaining responsibilities should be transferred to a municipality or another government body. As of January 2024, the company remained in operation under the jurisdiction of Israel's Ministry of Jerusalem and Heritage.

The company emerged from the Israeli government's post-1967 effort to rebuild the Jewish Quarter of Jerusalem's Old City. In April 1968, land in the quarter was expropriated by Israel; the area covered roughly 134 dunams and included the Western Wall precinct and surrounding buildings. In July of that year, the government decided to create a state-controlled company dedicated to reconstruction and development. It was formally established by January 1969. The organization operated within a complicated land-administration structure. The quarter was under the administration of the Israel Land Administration, which granted the company a primary lease in 1970. The company then subleased residential properties and administered the redevelopment of housing, shops, and public facilities. Its early work addressed a district that had suffered extensive deterioration and wartime damage. Between its establishment and 1985, the company built about 500 apartments, 100 shops, and several public buildings, transforming the quarter into a functioning residential and visitor district. Repopulation was part of the company's original mission. In 1971, it created an occupancy committee made up of board members and employees. Initial criteria favored Israeli citizens who had lived in Israel before 1967 and served in the Israel Defense Forces, as well as qualifying new immigrants who had become citizens but had not been in Israel during the conscription periods associated with the 1948 or 1967 wars. The early population was described as approximately half secular and half National Religious. From the 1980s onward, the quarter became increasingly sought after by ultra-Orthodox and other religious families. The rebuilding also changed the status of Arab residents who had lived in the area. Non-Jewish Arab residents were removed through eminent-domain procedures and compensated financially. Muhammad Sa'id Burqan, who had been displaced from his home, brought a petition seeking rights to his former property. In HCJ 114/78, Muhammad Sa'id Burqan v. Minister of Finance, Company for the Reconstruction and Development of the Quarter, and Minister of Housing, the Supreme Court rejected the claim. The judgment supported the legal basis for restoring the Jewish Quarter as a Jewish residential area, although the case remains part of the broader contested history of property, displacement, and redevelopment in Jerusalem. By the 1980s, the company's large-scale reconstruction objectives were largely complete. Its subsequent activity concentrated on routine maintenance, cleaning, preservation, building renovation, and management of archaeological attractions. The company also undertook work outside the Jewish Quarter under contract, including the development and maintenance of the Galicia Courtyard, a rooftop site in the Muslim Quarter administered by the Custodian General of the Ministry of Justice. Several major heritage projects illustrate the company's later role. It helped develop the Nea Church vaults in the southern part of the quarter during the 1980s. The sixth-century remains were structurally strengthened and prepared as an archaeological tourism site; an amphitheater was proposed above them but was replaced largely by a garden and recreational area following opposition from ultra-Orthodox residents. The site, sometimes associated with the Garden of Resurrection, later became inaccessible to the public, prompting calls from archaeological and cultural organizations for its reopening. The company also participated in the restoration of the Hurva Synagogue, an important eighteenth-century building that had served as a center of Jewish religious life during the Ottoman period. The synagogue was destroyed in 1948 while the Jordanian army controlled the Old City. After 1967, various alternatives were debated, and the ruins remained for decades before a restoration initiative was undertaken. The company's restoration work was completed in 2010. Administrative controversy has accompanied the company's continued existence. In 1999, it sold part of the Western Wall Plaza to the Ezrat Menachem association through a quiet auction. The planned development reportedly included a visitor center, study hall, and private event space. After the transaction became public, Israel Land Administration Director General Avi Drechsler challenged it, arguing that the sale was inconsistent with the company's public mission and improperly transferred a national asset to a private organization. The legal office of Prime Minister Ehud Barak accepted the case for freezing implementation. Reports also identified other sales of historically significant sites to private or ultra-Orthodox organizations during the 1990s. The controversy renewed calls for dissolution. In 1982, the State Audit Committee had already recommended merging the company with the East Jerusalem Development Company and Karta. The Knesset approved the recommendation in January 1983, but no merger followed. Government Companies Authority discussions continued intermittently, and later state audits criticized the lack of action. In 2000, MK Ophir Pines-Paz supported dissolution after the Western Wall Plaza affair. In 2004, the State Audit Committee again pressed Prime Minister Ariel Sharon to address the merger. Minister Tzipi Livni proposed assigning the remaining functions to an existing government tourism organization, but the proposal was not approved. A further recommendation in 2009 called for dissolution by January 2013 while preserving public assets through another government body. The company has nevertheless continued to manage public heritage assets and pursue development proposals. Parking plans have repeatedly encountered legal, environmental, archaeological, and planning obstacles. A large underground project approved by the board in 2004 did not materialize, while a later concept announced in 2015 envisioned roughly 600 underground parking spaces and 150 hotel rooms. By January 2024, the company remained active under the Ministry of Jerusalem and Heritage, despite the long-running debate over whether its functions should be transferred elsewhere.

• 2024

  Company remains in operation

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Despite multiple recommendations for dissolution or transfer of functions, the company was still operating in January 2024.

• 2021

  Jerusalem Archaeological Park management transferred

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  The company began managing the Jerusalem Archaeological Park, also known as the Ophel Garden.

• 2010

  Hurva Synagogue restoration completed

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  The company completed the restoration of the historic Hurva Synagogue in the Jewish Quarter.

• 1985

  Main reconstruction phase substantially completed

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  By this point, the company had constructed approximately 500 apartments, 100 shops, and several public buildings.

• 1983

  Knesset approves proposed merger

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  The Knesset approved a State Audit Committee recommendation to merge the company with two other Jerusalem development bodies, but implementation did not follow.

• 1971

  Occupancy committee established

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  The company established a committee to apply its criteria for allocating residential units in the Old City.

• 1970

  Primary lease for the Jewish Quarter

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  The Israel Land Administration leased the quarter to the company, enabling it to administer residential subleases and redevelopment.

• 1969

  Formal establishment

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  The company was formally established by January 1969.

• 1968

  Government decides to establish the company

  [1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Following the expropriation of land in the Jewish Quarter, the Israeli government decided to create a state-controlled body for reconstruction and development.

A public-sector heritage and urban-development organization positioned around the preservation, reconstruction, and ongoing management of Jerusalem's historic Jewish Quarter and related national heritage assets.

• Urban development · 1968

  Jewish Quarter reconstruction and residential development

  The company's foundational program rebuilt the Jewish Quarter after 1967. It included residential construction, commercial premises, public buildings, infrastructure, and the allocation of apartments to residents under defined occupancy criteria. By 1985, approximately 500 apartments and 100 shops had been completed.

• Heritage restoration

  Hurva Synagogue restoration

  A restoration project for the historic Hurva Synagogue, an eighteenth-century center of Jewish religious life that was destroyed in 1948. The reconstructed synagogue was completed in 2010 and became one of the Jewish Quarter's prominent religious and heritage landmarks.

• Archaeological-site development · 1980

  Nea Church vaults and Garden of Resurrection

  The company developed and structurally reinforced the remains of the sixth-century Nea Church vaults in the southern part of the quarter during the 1980s. Plans for an amphitheater above the site were modified after opposition, and the surface was largely adapted as a garden and recreational area.

• Archaeological-site management · 2021

  Jerusalem Archaeological Park

  The Jerusalem Archaeological Park, also called the Ophel Garden, contains remains spanning periods from the Bronze Age through Ottoman rule and includes the Davidson Center Museum. The company assumed management of the park in 2021.

• Heritage services · 1990

  Historic-area maintenance and preservation

  Since the major reconstruction phase, the company has focused on cleaning, maintaining, preserving, and renovating historic structures and public spaces in the Jewish Quarter. It has also undertaken selected contracted work in other parts of Jerusalem's Old City.

• 2000

  Western Wall Plaza land-sale controversy

  The company faced public and governmental criticism after an investigation disclosed that part of the Western Wall Plaza had been sold to the Ezrat Menachem association through a quiet auction in 1999. Officials argued that the transaction conflicted with the site's status as a national, religious, historical, and cultural asset. Implementation was frozen after intervention by senior government legal authorities.

  Source

Read more

• 2021

  Assume management of Jerusalem Archaeological ParkStrategy

  Background

  The Jerusalem Archaeological Park is a major archaeological and visitor site at the foot of the Temple Mount's southern wall.

  Action taken

  Management of the park transferred to the company from Elad.

  Aftermath

  The transfer expanded the company's role from Jewish Quarter redevelopment and maintenance into management of a major adjacent archaeological attraction.

  Source

• 2015

  Develop revised parking and tourism planStrategy

  Background

  Earlier parking proposals had failed to proceed, while the company continued seeking ways to address visitor and transportation needs.

  Action taken

  Incoming CEO Itai Bezalel announced work on a plan involving approximately 600 underground parking spaces and 150 hotel rooms.

  Aftermath

  No completion of the announced project is established in the available reference material.

  Source

• 2004

  Approve underground parking and mixed-use conceptStrategy

  Background

  Parking demand and long-standing planning disputes led to repeated proposals for underground access and parking near the Old City.

  Action taken

  The board approved a concept for an 18,000-square-meter underground parking project combined with residential and commercial uses.

  Aftermath

  The project did not come to fruition.

  Source

• 1999

  Approve Western Wall Plaza property transactionOther

  Background

  The company conducted a quiet auction for part of the Western Wall Plaza.

  Action taken

  It contracted to sell the land to the Ezrat Menachem association for a proposed visitor center, study hall, and private event facility.

  Aftermath

  The transaction became public in 2000 and its implementation was frozen after government officials challenged its compatibility with the company's public mandate.

  Source

• 1983

  Approve proposed merger with other development companiesM&A

  Background

  State auditors argued that overlapping public development functions could be consolidated after the company's reconstruction work progressed.

  Action taken

  The Knesset approved the State Audit Committee's recommendation to merge the company with the East Jerusalem Development Company and Karta.

  Aftermath

  The merger was never implemented, and later governments continued to debate dissolution or transfer of the company's functions.

  Source

• 1968

  Create a state company for Jewish Quarter reconstructionStrategy

  Background

  The government sought an institutional vehicle to rebuild and repopulate the Jewish Quarter after 1967.

  Action taken

  It established a state-controlled enterprise with responsibility for reconstruction, development, and heritage functions.

  Aftermath

  The company led the principal rebuilding program and later shifted toward maintenance and heritage management.

  Source

• 2024

  Company remains active despite repeated dissolution proposals[1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Other

  As of January 2024, proposals to dissolve the company or transfer its functions to another public body had still not been implemented.

• 2021

  Company takes over management of Jerusalem Archaeological Park[1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Leadership change · Other

  Management of the Jerusalem Archaeological Park, also known as the Ophel Garden, transferred to the company from Elad.

• 2019

  State grant supports upkeep of historic Jewish Quarter buildings[1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Other

  The company was included in a government grant of 200 million shekels for the maintenance of historic buildings in the Jewish Quarter, including the Tiferet Yisrael Synagogue.

• 2015

  New underground parking and hotel concept announced[1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Other

  Incoming CEO Itai Bezalel said that a new plan was being prepared for an underground parking facility with about 600 spaces and approximately 150 hotel rooms, following earlier proposals that had not proceeded.

• 2003

  Court orders end to operation of unlicensed Jewish Quarter parking lot[1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Lawsuit · Regulation

  Jerusalem's Local Affairs Court ruled that the company could not legally continue operating a parking facility that had functioned without a business license for many years.

• 1985

  Company completes major reconstruction of the Jewish Quarter[1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  Other

  The company's principal rebuilding phase had produced approximately 500 apartments, 100 shops, and several public buildings by 1985.

• 1983

  Proposed merger with other Jerusalem development companies remains unimplemented[1]Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org

  M&A · Other

  The Knesset approved the State Audit Committee's recommendation to merge the company with the East Jerusalem Development Company and Karta, but the decision was not carried out.

1. 1Company for the Reconstruction and Development of the Jewish Quarteren.wikipedia.org