Mamilla Mall Construction, Early 1990s – Another ‘Once Upon a Time in Jerusalem
The Mamilla neighbourhood was established in the late 19th century as a mixed community of Jewish and Arab merchants and artisans. As Jerusalem’s population grew and residents moved out of the crowded and neglected Old City, Mamilla became a patchwork of workshops, warehouses, garages, and shops situated in the valley near Jaffa Gate and the Old City walls.
After the War of Independence, Mamilla found itself on the border between Israel and Jordan, becoming a neglected slum housing for new immigrants. In the early 1970s, following the reunification of Jerusalem, plans were proposed to rehabilitate and develop the neighbourhood. Despite its prime location, the area was in dire physical condition.
Mamilla was designated as a priority redevelopment zone, and 100 dunams of land were confiscated by the Minister of Finance. In 1971, the government established Karta, a government – municipal company tasked with renewing and developing the area.
Karta evacuated 345 residential units and 352 businesses, compensating residents and owners with a total of 115 million shekels.
Residents who had endured years of hardship in a neglected warzone were relocated to other neighbourhoods like Baka and Neve Yaakov with minimal compensation. The area’s redevelopment plan, drafted by architects Moshe Safdie and Gilbert Weil, was approved in November 1979, covering 120 dunams.
After years of disputes and deliberations, the final plan ensured that new buildings would not overshadow the Old City walls and scaled back construction density. This plan was officially approved in 1981.
The photo above shows the Stern House, a historic building that hosted Theodor Herzl during his 1898 visit to Jerusalem. It stands proudly amid the excavation for the current Mamilla Mall.
A new road was constructed in the valley between Jaffa Gate and King David Street, later renamed Yitzhak Kariv Street. Over years of work, including financial difficulties faced by contractors, progress on parking facilities and the valley road was finally completed in 1978.
In July that year, Karta issued a tender for a developer to build the 120,000-square-meter Mamilla project, combining residential, commercial, and hospitality spaces.
After narrowing down 55 initial proposals to three foreign developers, British-Jewish businessman Cyril Stein and his company Ladbroke, which also was the chairman of Hilton International, were selected. By the early 1990s, demolition began, and the first phase of the David’s Village neighbourhood was underway.
In 1994, Stein stepped down following significant financial losses. Ladbroke began liquidating assets, and in 1995, Alrov, owned by Alfred Akirov, acquired 50% of the project’s rights, later purchasing the remainder. The first phase of David’s Village was completed, and the Mamilla Hilton Hotel, now David Citadel Hotel, opened in 1998.
By 1999, Alrov sought to add 2,000 square meters for cinemas, but delays arose due to opposition from Karta’s religious board members.
After arbitration, Karta was ordered to pay Alrov 102 million shekels for the delays, out of the pocket of the tax payers.
In May 2007, the eastern section of Mamilla Mall opened to the public, and the entire mall was completed by 2010, 30 years after the initial approval.
In 2012, Karta was dismantled, highlighting the challenges of combining governmental and business initiatives. A tender was issued to sell the covered Karta parking near Jaffa Gate, and in 2013, Alrov won the tender for 110 million shekels with a commitment not to raise parking fees for 20 years.
However, the Antitrust Authority voided Alrov’s win, fearing a monopoly over his other 2 parking lots in the area. The runner-up bidder, Reit 1 Fund, won the tender for 107 million shekels and subsequently raised parking fees by 40%, and proved again that in the gap between the government and real estate tycoons the taxpayer’s money will always be the easiest to collect.
This is the story of our Jerusalem—an area that transformed from a neglected, war-torn border zone into a prime commercial and cultural hub. From impoverished immigrants to Herzl’s historic visit, Mamilla reflects the complex layers of Jerusalem’s history.
Shabbat Shalom to all those near and far from Jerusalem.
May we soon witness the safe return of our hostages to their families, the restoration of peace and unity, and the fulfillment of Herzl’s vision for a flourishing Jewish state.
