On October 6, 2023, if someone had mentioned to you the “Gaza Envelope”, would you have known what that even was? If the answer is “no,” you shouldn’t feel bad. A huge proportion of Israelis had never heard the term, either. Most had never visited, and almost no one had ever stayed there—because there was nowhere to stay.
As Israel begins to look beyond the war and to undertake the enormous task of rebuilding—the south, the north, the army, social cohesion, Israel’s international reputation and much, much more—a group of builders and investors seeks to make Kibbutz Nir Am ground zero for some of that renewal. They plan a hotel, a healing spa, an Eyal Shani restaurant and much more—to make the Otef a place one can visit and stay, rather than quickly drive through before heading back to Tel Aviv or Jerusalem to sleep.
The project is already getting some press
but there’s a lot more to learn, and today, we hear from Adir Waldman and Simone Gross, two of the people who want to bring not only the hotel, but Israel itself, to renewed life.
Once you’ve heard today’s podcast conversation, if you’re interested in investing or becoming involved in other ways, you’re invited to reach out to Office@niramhotel.com.
Adir Waldman has spent the last 15 years leading the Tel Aviv office of an international law firm, advising on investments into Israel. Adir is active in nonprofit organizations, among other roles, serving as Chairman of microfinance lender KIEDF. He resides in Tel Aviv with his wife and four children.
Simone Gross is an impact investor. Prior to the Nir Am Project, Simone was a Managing Director and Head of Investments at Maycomb Capital where she oversaw a mission-aligned private debt outcomes financing fund. Prior to that Simone was a structured finance lawyer. Simone is active in nonprofit organizations including American Friends of Leket Israel. Simone resides in New York with her husband and three children.
The link at the top of this posting will take you to the full recording of our conversation; below you will find a transcript for those who prefer to read, prepared for our paid subscribers.
I think it’s fair to say that before October 7th, 2023, many people who are listening to this episode had never heard the phrase, The Gaza envelope, Otef Aza. They had probably heard of Sderot because Sderot was unfortunately in the news far too often because of Hamas rockets. They knew that there were playgrounds built in Sderot in which there were little pipes that kids could crawl into under the seesaws and under the swing sets, so that if they heard a siren and they only had 15 seconds, they could get in. But that there was a string of kibbutzim all along the Gaza border, that these kibbutzim were of a very unique sort and had a very unique history, that they had a certain ethos about agriculture, about Zionism, and, of course, as we know with terrible irony these days, about reaching out in many cases to Palestinians and Gaza and trying to work with them, some of them driving them to hospitals in Israel for treatment and all sorts of things.
I think most of the people listening to us today literally had no idea that all this existed. Even if they were very very frequent visitors to Israel, I’m willing to bet that their trips took them to Jerusalem and to Tel Aviv and to the Sea of Galilee and to the Galilee and to the Dead Sea and maybe to Beer Sheva to see Ben Gurion University or to go to the Sde Boker where Ben Gurion spent quite some time. They’ve been north to Rosh Ha’Nikra. But if you filled in like with a crayon, the map of Israel, where all these various tourists and visitors to Israel had been, the area around Gaza, the Otef, would probably not not get colored in. And that wasn’t really because of security concerns for most of those years. It was just because it wasn’t on our radar. Now, obviously, for the most tragic reasons ever imaginable, the Otef is a very, very well-known term. The Gaza envelope is very well known. And we’re all aware that we, as a country, are trying to rebuild it. The government is helping to rebuild the kibbutzim. We’ve had on the podcast previously a young man named Roi Azizi, who’s actually heading up a an initiative to get lots of young people, so far, hundreds, but hopefully thousands of young people, to move to the Otef. He’s doing it in the Otef and he’s doing it in the north as well. To say to young people, you’re working remotely. Don’t work out of your apartment in Tel Aviv. Get rid of your apartment in Tel Aviv and go north, go south. We’ve had lots of people on who have done all sorts of projects. We’ve heard from Izhar Armoni, who’s done work to try to bring high quality education back to the Otef and to the north so that people won’t feel like they’re in the periphery and for whatever reason don’t want to to move back, we’ll not have that reason. There’s lots of things that are being done to overcome the horror of what happened at the Try to rebuild. Today, we are meeting with two other people who are involved in a very, very different project, which really struck my fancy when I heard about it. I’m therefore very glad that they were willing to come on today to share with us their plans, their thoughts, their dreams, and so on and so forth. Adir Waldman has actually been on the podcast once before as part of a microfinancing project that he’s with, and we can make notes of that in the notes for today. And Simone Gross is new to the podcast and is also a partner with Adir in this project of actually building the first hotel tourist area in the Otef. So Adir and Simon, thank you both very much for taking the time to join today. Adir, let’s just start with you, even though you’ve been on the podcast before. Tell people a little bit about your background in general. You’re speaking to us from Tel Aviv. I’m in Jerusalem. Simone is in New York But tell us a little bit about your own background and then how you specifically got involved in this project or came up with the idea for this project. And then we’ll come to Simon.
Adir Waldman
So first of all, thank you very, very much for having us, Daniel. It’s an honor to be with you and to be here together with Simon. As you said, I have been once before privileged to be with you to speak about a microfinance organization that I chair. I’m a lawyer, have been in Tel Aviv for 15 years representing a large international law firm here. And the story of the project is pretty simple. I woke up on October 8th, and like everybody else, in this magnificent country, I began to think about, what am I going to do to help? And I guess I should say also for our listeners, like a lot of people in the diaspora, I began to think, what’s my role? My wife, bless her soul, ran and did milu’im. And I’m 50 years old and I started thinking, I don’t know if that’s the highest and best use of my time. My first impulse was to build a family home in the Otef. And pretty quickly, I realized it’s not a great idea and it just doesn’t have much impact. Unfortunately, I didn’t have the brilliant idea that Roi Azizi had to actually start bringing people here.
But I thought along similar lines, actually. That gives me some encouragement that he and we are thinking along similar lines. I started thinking about What does it mean to have a home? What does it mean to call a place home? And how does hospitality work as part of that? And in parallel, at the same time, also, again, like many Israelis, I was spending a decent amount of time in the Otef. We have a big family car. I was bringing stuff down. I was trying to help as best I could. And it became evident very quickly that there was no place to stay down there. It was just immediately obvious. And so putting these two strands together, I had a light bulb moment, I would say as early as the second or third week of October 2023, where I said to myself, That’s it. If I can build, not a home, but if I can build a place that lots of people want to come and stay and feel at home, that can really have some impact on the rebuild. And the thought was, When this war ends, I was thinking this back in 2023, and I didn’t realize it was going to take this long, but when this war ends, there’s going to be a surge of visitors to the region. If there is no place for them to stay, what will happen is what you see happening today. Eighty busses a day arrive in Sderot. People get off. Probably you’ve done it, Daniel, and lots of our listeners have done, I’ve done it, Simone has done it. You get off the bus, you do a little tour of the police station that had to be destroyed, or of the Nova site, or of a kibbutz, you buy a Coca-Cola, you get back on the bus, and you go back to Tel Aviv or Jerusalem. And that’s true, whether you’re from Israel or from abroad. And so the thesis is there’s a real market opportunity, and we can make money for our investors, and at the same time, we can have a huge impact on the ability of the region to regrow itself.
Well, great. Well, we’ll talk about the impact that this is going to hopefully have on the region itself, and we’ll come to Simone in a second. I just want to share with you, since I didn’t know that part of the story before you spoke, Adir. I think we were about two months into the war when we had actually representatives of all of our kids, one either them or their spouse, at the Shabbat table. And one of my kids was just, he was called up on the 7th and was outside Gaza. He didn’t go in that day. And was exposed to the horrors of what had happened. Because when the soldiers started coming out on the 7th and the eighth. The army didn’t know then that it needed psychologists as much as it needed doctors. He was called up because in addition to whatever unit he was in, he was also a medic. They just called up all the medics on the 7th because there were these rumors, lots of wounded people, nobody knew that they either needed tragically coroners or orthopedic surgeons. So the medics ended up having nothing to do. So he was hanging around with hundreds of other medics, and the soldiers started to come out and told stories that shook him to his very core as a young father It took him many, many months to even be able to smile about anything. But they were sitting at the Shabbat table, I’ll tell you this, for the reason, and I said to everybody at the table, Listen, I’ve been talking to Ema, and I think that maybe we should build a home in the Otef. My wife had already said to me, Okay, whatever if you think. One of my kids’ spouses, who’s not always a huge advocate of my brilliant ideas, shall we say, said, That’s actually a great idea. I was a little floored by that. And then the same son who had been called up on the 7th said, That’s a lovely idea. I want you to know that if you and Ema move to the Otef, I and my wife and my children will I will never, ever, ever visit you there. This is a kid who was in a very, very, very combatty unit for eight years. He’s not easily frightened by very much. But he said to me, and I’ll never forget it, he said, I understand, but I don’t understand before, the Otef is never, ever, ever going to be safe, and I will never bring my kids there. Now, I don’t know that he would say that today.
I don’t think that any of us in November or December of 2023 could have had any idea how much this region was going to change with Hezbollah, with Syria, with Iran, and even with Hamas, which is not completely destroyed, but is certainly largely debilitated, and God willing, will be even more debilitated as time goes on. But I only mention that long story as a way of long a bit of introduction to Simone by way of saying that for most Israelis, not only we do not go to the Otef when the idea was raised after the war started, for many people, including this kid who chose to go to a combat unit for eight years, it was a complete nonstarter. He said, My kids are never going And I don’t think he would say that now, but I just want to emphasize, again, a lot of us had this instinct of building a house there, but a lot of us also realized, I mean, what impact is that really going to have? And I think it brought home, at least for me, how much even a younger generation of kids who’ve been in combat units were nervous about it. If we can get people from across the globe, Israelis, but also diaspora people as well, to start seeing the Otef as a quasi home away from home, we’re going to change a lot of things. We’re going to change financial realities on the ground, and we’re going We’re going to change the lives of people there, but we’re also going to change ourselves and how we think about that area. But anyway, that was a long-winded editorial.
Adir Waldman
I just want to say, and maybe I shouldn’t share this because it’s against our interests, and Sima may kill me afterwards, but we had the same conversation at our Shabbat’s table, and my wife said to me, I love your idea. I love you for having the idea. Use any family budget you want. I’m never sleeping there. And I think Sima and I both fully appreciate that the vision that we have begs this question. And there are a lot of tough issues, and we need to work through them.
But I think that a lot of people would respond differently. Anyway, we’ve cut you off twice before you said a word. So why don’t you introduce yourself? Tell us a little bit about your background and how you got to this project and what your role in it is.
Simone Gross
Thank you. I will. I’m just going to respond to a bunch of those threads before I get there, if you don’t mind. First of all, I think Tamar has come around a bit in the sense that-
Adir Waldman
Tamar is my wife.
Simone Gross
Sorry, I hope it’s okay that I invoked her. That as time has gone on and as we’ve talked about the different design elements, there was a moment in time where we thought this would be a great glamping site. And then we realized people probably really want to be in a structure. And so there’s a lot that has gone into our design that’s not just local. It’s taking into account, how will people feel about sleeping a mile from the border? We’re going to activate bomb shelters. We’re going to think about how to just give, use architecture to make people feel more secure and sound. But the other bit that Daniel and I think about as we talk, and first of all, thank you so much for having us on. This is really amazing that we get to get this exposure and let people know about all this. But I was talking to a friend of mine who was a US veteran who served in Afghanistan about this project and about how not only is this a model for rebuilding Israel, but there is something in this where we can think about this as a model for rebuilding Building a post-conflict zones altogether.
But there’s something about Israel in the startup nation where we can do post-traumatic growth and we know how to rebuild right away. But people aren’t talking about this in Ukraine yet, but at some point, they’ll need that, too. And so he was saying to me, and I hadn’t thought about this at all, but it struck me with what you were saying about, I guess it’s your son-in-law, that he would so love to do this in Afghanistan so that he could have his fellow US vets go to Afghanistan and see it thrive. That there’s something about the people who served in that exact space needing to go back and have that catharsis, which is just like an additional profile and target audience that, yes, we’ve talked about PTSD therapy in general for our guests that come, but specifically thinking about how to serve the servicemen who’ve been there was just, the fact that he went there so quickly was really profound and hit home again, just the many layers of impact that a project like this can have. But sorry, to answer the question you asked me many moons ago, I’m an impact investor based in New York. Prior to October 7th, I had always worked on US issues. I was a structured finance lawyer before that, and I have an urban planning background, and so I had worked on impact investing and tax advantage investing and stuff like that in the US. I had the privilege to meet Adir because he is way too humble about his work at Coret. And he has this amazing loan fund program that he’s working on for farmers in the south. And so that’s how we really first got to know each other. But then through that, we spent a lot of calls talking about this project because in my immediate post October 7th activation, it was, okay, how can I use my expertise and just do a lot of friendly advising to fellow Travelers and Impact investing in Israel? I knew Social Finance Israel and others before the 7th. So Adir and I spent some time together that way, and I just immediately fell in love with this project. It hits so many on how to do rebuilding correctly and how to have a sustainable future for the region, the larger region, the country, diaspora Jews. There’s something for everybody here.
Terrific. Which one of you wants to tell us, basically, what is this project? What are you trying to build? What’s it going to look like? What’s its size? What’s its nature? Are we talking about Motel 6? Or are we talking about the Trump Towers somewhere on Fifth Avenue? How many people? What’s the schedule, et et cetera. Who wants to lay out the project?
Adir Waldman
Go ahead, Sima. Run.
Simone Gross
All right. Thank you. And please jump in as I know you will, wherever you have something to add. So it’s actually neither. It’s not a Motel 6 or a Trump Tower. It’s what we’re calling barefoot luxury, which is comfortable, unfussy, but elevated, and beautiful, and comfortable. It’s going to be about 100 rooms, over two sites. There’s the main site, and then where the historic guest house already is Kibbutz Nir Am. It’s at Kibbutz Nir Am, which is across the street from Sderot. Kibbutz Nir Am is a beautiful kibbutz that has always wanted to have a thriving hospitality business. So it’s really exciting to be able to partner with them to do this. We’re going to have an amazing food and beverage program by Ayal Shani.
Who is a very well-known Tel Aviv and Jerusalem chef who has all kinds of high-profile restaurants in Israel and beyond.
Simone Gross
Right. I believe he’s a Michelin-starred chef, and he’s very focused on farm to table. And so it’s just the perfect pairing when we think about the way the Otef can be the bread basket of Israel and how we really want to be as local in our supply chain as possible. We’ve been working with amazing Dana Oberson on design. She’s done fantastic hotels in Israel, really understands modern Mediterranean, which is the look and feel that likely we’re going to have here with elevating the kibbutz experience. So for someone like me, I get to come and cosplay that I get to be on a kibbutz, but it’s not the kibbutz guest house that I would have stayed on in my Mahak summer. So that’s what’s really exciting. We have amazing advisors on this, and And what we’ve heard over and over again from hospitality industry veterans is we should build a hotel that we would want to stay at. And so Adir and I like to travel a lot, and we like to travel nicely. And we like good service, and we like beauty, and we like relaxation. And why shouldn’t all of us have all of that at the Otef? So that’s what we’re thinking about. Also from a economic development strategy and a placemaking strategy, if we start more high-end, we hope that this will spur an ecosystem of other hotels. And in fact, there is friendly competition among a couple of other projects. We all want to be the first one out. And so there’s room for the whole range. This is just the spot that we’re at, because to your point, I don’t know, sorry, if we made this in the prep or once we already started, but there’s no place to stay. And we all had this big gap in our imagination of what the Otef was, and it’s still there. And to your point about the 80 busses that come to Sderot every day. And I’ve done that like everyone else. There’s no stickiness there yet, other than what we’ve learned is the term of dark tourism, so the memorial sites. But there actually are a lot of tourism assets. They just haven’t coalesced into a tourism ecosystem yet. So Before October 7th, there was a study that came out by the Ministry of Tourism, I believe, talking about all of the assets, the tourism assets and the need for rooms in the Otef. And then obviously the conversation had to be paused. So it’s there. And the land is zoned at Nir Am. It’s there. All the conditions are there. It’s just, unfortunately, the crisis that was October 7th brought the spotlight that is needed to get all three of us to be paying attention to this and talking about it and thinking about how do we finance it and get it going. So this is the part we could do.
Adir Waldman
A lot of people ask us who our audience is. And we always say, look, our audience is really everybody. It’s all of our friends from abroad who come and visit Israel. Like you said, they go to Tel Aviv, they go to Jerusalem, they go to the Galil. We want them to go to the Otef, too. And it’s our Israeli friends who spend insane amounts of money going to mediocre hotels in Israel for the weekend because there’s not a lot of option here. And they should go to a great hotel in the Otef and enjoy.
Simone Gross
And the corporate traveler who has, in Israel, there’s a regular benefit, and you both know this better than I do, that there are retreats and staying. This is such an obvious way to inspire your employees, to do corporate social responsibility, to give back, to spur the economy through that. So we think that’ll be a big piece of it. We expect federations and missions will all want to come and stay because, again, it’s annoying to stick everybody on a bus forever. You’re going to come to your volunteer, pick cucumber at a farm in the south, and then go see Reim and go see the kibbutzim, and then get back on the bus. I’m dealing with this myself. I’m planning my trip with my family in December, and I have three kids. They’re 12, 10, and 8. So I’m trying to decide how much of the Otef do I show them? And so between balancing that and wanting to show them inspiring and rebuilding. Luckily, they want to see what mom’s been working on, so we’re going to Nir Am. But it’s not there yet. It’s clear that it’s needed.
Adir Waldman
I was going to say, just to put some numbers on this, the Ministry of Tourism says that before the war, there were 300,000 tourists a year to the Otef, primarily in the Darom Adom season.
Which is the flowers, the calaniot. What are they called in English, calaniot?
Adir Waldman
Red anemones.
Anemones, yeah. Okay.
Adir Waldman
Currently, that’s It’s tripled to a million tourists a year or visitors to the region.
Mostly going down to see the sites related to October 7th, I’m guessing.
Adir Waldman
Exactly.
Simone Gross
And a lot of volunteers.
Adir Waldman
And the prediction by the Ministry of Tourism is that in the aftermath of the war, that number will double again to two million a year. So we’re talking about a rise from 300,000 a year to two million a year. So it’s pretty significant. And just to go back to the point that was made earlier, look, a lot of the current visitors are drawn in the first instance by wanting to see what happened. Our idea is it’s fine to go and see what happened. It’s important. People are going to do it. I’m I’m sure, for the next 50 or 100 years or more. But we also want to show off the best that the Otef has to offer. So go to the Nova site, go to a kibbutz, but in the evening, have an Eyal Shani farm-to-table restaurant with local Negev wines or or hear music from a band that grew up in Sderot, or go hiking or swimming, or learn about the ancient history of the region, or arts and culture. There’s so much other stuff to do.
Or the early modern history of the region. Why did all those people seem to get built there? Why did they decide to put them there? There was a reason for that. They’re not there by accident.
Simone Gross
Exactly. We actually have the water security museum right at Nir Am, so we can definitely do that. But I think to your point, and this is from my very New York-centric perspective, it’s like New York after 9/11. You’re coming to New York, particularly Southern Manhattan, for a lot of reasons. You may or may not go to the 9/11 Memorial, but you’ll still stay at a hotel down there that had to be spurred. We have to incentivize that economic development after 9/11 there. And so it’s similar in that way. And admittedly, I came to this project with that focus about the near term dark tourism. People need a place to stay while how they bear witness. But I’ve learned that there’s so much more to do. You can do a wine tour, you can do agri-tourism, there’s cycling, there’s all of that that also pre-existing. We’re not manufacturing it, but it’s multiplying.
I want to ask you in a minute about the relationship between the region and this project. To what extent people in the region are involved in planning it, to what extent you see them working in it, what you think the impact on it financially and economically is going to be for the region. But before we do that, I just want to ask you quickly, so at this facility that you’re talking about building, just to give people a fleshier sense of it. So there’s 100 rooms. You said that there’s conference sites. I guess there’s some maybe like a small auditorium or conference rooms or something of the sort. What else is there on the site, as you imagine it now?
Simone Gross
The most amazing pool area because we know it’s going to be hot there. Great bar, the restaurant. There’s already the Historic Green Pub at Nir Am, so there’ll be music just there. There, but we’re also focusing on wellness. So there’ll be a great spa. We’ve been talking about doing artist studios. We got an idea, and I guess we’ll see how this goes today for me and Adir, whether or not we should also include podcast recording studios and just general content making, because there’s expected to be a real surge in creativity and just a maker ethos, particularly because of where it is in the Otef after this. And that part of recovery and healing and building is just creativity and making. And so I love the arts. I’m more of an arts person than, let’s say, music or podcast or whatever. So that’s where I go. But we want to leave it open to people when they come. And we also really want, to your point, your later question about the region, and we’ll get there, we’d love local artisans to be a part of that. So we expect to have artists in residence, to have locals come to the site and lead a pottery session or flower pressing or cocktail making from the kitchen garden and things like that. So we’re going to really ground it in the land.
There was an exhibit, I’m going to guess about a year ago, I don’t remember exactly when it was. My wife and I actually went to see it at the Anu Museum, which was composed largely of art that had been done by people in the Otef. But obviously, there’s no place in the Otef to exhibit it. I mean, it was a pretty big exhibit, and there was certainly no exhibit space like they had at Anu, which is on the Tel Aviv University campus. And it used to be called the Diaspora Museum to show it. So there’s a huge arts center there, but not nearly well known enough yet. So I’m sure that that’s also going to explode once you guys bring people down and they can also sell their work more easily. It’s going to obviously one thing is going to feed off to another. Let’s go to the region. To what extent people had this idea before the war? You’re saying, whose idea was it before the war? Why did it not progress? To what extent are they involved with you guys in planning it? Are there issues there? I mean, between Kibbutzim or these Americans, one is an American transplant, one is an American-American coming, and they’re going to do a hotel in our neighborhood. There’s all those kinds of things that can come up in any one of these projects, no matter how well-intended they are. This is obviously completely well-intended. Talk a little bit about the impact as you see it on the region and then how the region is involved in all this.
Adir Waldman
There’s a lot to say about that. I just want to start before I hand over to Sima to talk about the wider regional impact about Kibbutz Nir Am in particular. We spent a lot of time looking at lots of different sites. We met with every single regional council head in the Otef. By the way, every single regional council wants tourism. They believe that tourism is a part of the regeneration story. The government of Israel wants it, Tkuma wants it. In the end, we ended up in Nir Am. In addition to the things Sima said about it being beautiful, I just want to make a few points. Number one, it’s 50 minutes from Jerusalem and Tel Aviv. It’s basically as close as you can get to the center of the country while still being in the Otef. It’s on a train line. There’s a train stop right at the front gate of the kibbutz. But two points in particular. Number one, the Kibbutz is one of the very few places in the Otef that was successfully defended on October 7th. So unlike some of the other kibbutzim that we spoke to, although the kibbutz obviously suffered in the aftermath of October 7th, everyone was evacuated forcibly on October 8th, and they spent 10 months living in hotels and guest houses in the rest of the country. But they didn’t suffer the physical destruction and the loss of life that a lot of other communities suffered. And so from that perspective, it made a very welcoming home for us. And the other thing is that they had land that zoned for hospitality, which is very rare and very difficult to get. So we’re super excited about Kibbutz Nir Am. We do want, by the way, you were asking about local employment or regional employment. We intend to make that a focus. 80% to 90%, we hope, of our staff will be local, whether that means from Nir Am or from the wider region. Nir Am is our partner, we should be very clear. We did have long and difficult conversations, just like you suggested, about putting a hotel in their backyard. And kibbutzim are complicated organisms. But we are very proud of the fact that all of these long and difficult conversations ended in one place. And the way they ended, by the way, just to put a little anecdote on it, is that somebody from the kibbutz stood up, somebody from the older generation stood up and said, Guys, everybody has made valid points tonight. But at the end of the day, the overriding concern of all of us is that our children and grandchildren feel like they have a future on this kibbutz. If we want that to happen, we need industry. We need business. We need arts and culture and visitors. There’s no question. We need to take advantage of the fact that we have a beautiful piece of land zones for our hospitality. When can we start? And that ended the conversation.
It sounds a little bit like that line out of Chaim Chazaz’s short story, The Sermon, Hadrashah, where this old kibbutz guy, he gives a whole lecture about history and Jewish, with the lack of Jewish heroes in Jewish history. But again, it’s the kibbutz gathering, and then one old guy stands up and steals the show with a very poignant remark. Obviously, a totally different subject, but you can envision it happening back then. You can envision it happening now. Okay, Sima, you wanted to take a little further.
Simone Gross
Yes, sorry. I will, but just on some of those points. If there’s ever a movie like that scene is definitely in it. It was so inspiring and moving and exactly what we would hope. And there’s a saying in impact investing that these projects work at the pace of trust. And so I don’t love to disagree with Adir, but it wasn’t difficult. Yes, it was frustrating at times, and it took a long time, and we had a lot of back and forth. But when I think back again to my urban planning background and working with communities and how neighbors act and NIMBYism, not in my backyard, we didn’t get that much pushback. People were on board and they were excited about it. And of course, there are a couple of residents that are hesitant to be letting strangers wander around and invade their quiet because that’s why they move to a kibbutz. But the overall sentiment is they understand that they need this and they need it for their future, and it’s something that they had wanted, and this is the moment to do it. And they feel lucky that this project is coming to them at this time and in this way, because we’ve worked really hard to be very deferential to making it culturally appropriate, weighing in what people are interested in.
We could have done, we’re doing it boutique, but we could have made it much bigger and more down market. And there’s lots of things that we could be doing to shortcut it that we’re not doing because we want this hotel to be on Nir Am forever. And in 50 years from now, we want them running the hotel because it’s a phenomenal sustainable source of revenue for them. So I feel privileged that they have opened us with such open arms.
Adir Waldman
One thing which maybe we should explain. We intend to lease the land from the kibbutz for 50 years, and we will pay for the construction of the hotel, and we will pay them rent for the next 50 years. And at the end of the 50 years, we will hand over this business to the kibbutz as a gift.
So in 50 years, the three of us will get back on this podcast, and we will talk about the ceremony of handing the kibbutz over. I think one of the three of us has a much better shot of being around than the other two of us, but that’s neither here nor there. Sima, do you want to say a little bit more about the economic impact on the region at large, beyond the people who are going to actually work at the hotel and beyond Nir Am itself, getting the revenue from the land for the hotel? I know you guys have a lot of thoughts and a lot of data about what you understand the impact regionally to be. Say something about that, and then I want to ask you something about timeline and all of that thing.
Simone Gross
Sure. We think in the next 10 years, the hotel is going to generate over 170 million shekels of revenues for businesses. That’s outside of our project. We also expect to generate about 4 million shekels a year for the kibbutz itself. So the idea that we can have that impact, and that’s because we think we’re going to attract about 22,000 annual overnight stays That’s just a lot of bodies coming with a lot of interest in spending their disposable income and their leisure budget in the area. And on jobs, we hope to create 120 local jobs. Again, whether that’s Nir Am or Sderot or the local. We We are lucky, actually, with the proximity to Sderot, because from a labor market perspective, we probably aren’t going to be able to find everybody at Nir Am. But Sderot is also a urban environment that needs a workforce development, and so this is a perfect pairing. That’s general bits of it. On a less quantitative focus, we are really working on local supply chain as well. So we would hope to have the privilege of working with the furniture studio in Beeri and sourcing all of our furniture from local Israeli artisans.
And like the art you talked about at the Anu Exhibit, we would love to showcase Otef artists throughout and use them in our décor. We want to source our food. We’re sure Eyal Shani is going to focus on that from a farm to tables perspective. All of that is going to contribute up the supply chain. That’s how we get to that 170 million shekel. That’s great. I also do want to acknowledge and be very grateful of the fact Tkuma is thinking about how to spur this hospitality development that hadn’t happened before October 7th.
Explain what Tkuma is for people that don’t know.
Simone Gross
Sure. They’re the agency that is working on rebuilding the Otef, and they’ve already allocated a lot, billions of shekel to rebuilding in different sectors and industries. And so the Ministry of Tourism has a subsidy program to incentivize hotel development outside of the center of Israel, so outside of Jerusalem and Tel Aviv. But Tkuma realizes they need to supplement that. So they’ve been a really generous and gracious partner in thinking about what else and how to layer on top of that incentive to make it a deeper incentive and a larger reimbursement for hotels that come online. And so we really hope to be the first to partake in that program as well. And that’s an ongoing discussion. But it’s just a general spirit of collaboration and partnership that we’ve had with everybody in the Otef to a dear point earlier, that everyone in the region knows that hospitality is a piece of this puzzle. We can’t just, what I was hearing a lot after October 7th was, Oh, we’re going to put a high tech hub and we’re going to commute people back to Tel Aviv. That can’t be the only answer, even the main answer. We need to be thinking about all that creative class and culture growth that we can do so that someone like Roi Azizi can be successful in their endeavors. And it just, I think, speaks to this as, I haven’t met him yet, but I’m actually meeting with him in a couple of days. He reached out. He had heard about the project.
He was in New York this week.
Simone Gross
Exactly. That keeps happening. It’s been wonderful partners that we’ve met, whether it’s the folks that are trying to grow the spirit in wine the wine industry in the Negev, or if it’s people are working on workforce development and know that we’re going to have jobs that need to be filled, or again, about the supply chain stuff. It’s really amazing to see all of that happening so organically. I I think big piece of Adir’s special sauce is he knows how to assemble the best in each area. And so he just keeps drawing amazing people from each area to join our team. And so that’s going to help spur all that regional development right away.
Adir Waldman
We’ve been blessed. I do want to, sorry, Daniel. On Sima’s point, I just want to say we’ve been blessed at the number of people who, instead of saying, your idea is insane, have said, Wait a minute, I’m rolling up my sleeves. Let me see how I can help you. There are two people in particular that deserve credit, and I just want to say their names because they’ve been incredible. One is David Zisser. He’s a hotel entrepreneur who lives in London and builds very nice hotels across Europe. The other is a person named Shai Zelerin. He’s an Israeli who moved away to New York 30 years ago, and he heads hotels at Brookfield, which is the institution that owns probably more hotels than any other institution in the world. And they are big believers, along with a lot of other people that are on our advisory board, in the power of hospitality. You talk to them, this is their career, and they talk about the magic spark that can happen when a person, probably most of the listeners have had this experience, you go to a well-executed hotel in a special place. And it’s hard to explain, but suddenly you feel some emotional connection to that place. Our hope is we’re going to have thousands of people a year go home to their homes and dream about coming back to Israel for the purpose of going to Nir Am, for the purpose of going to the Otef. So that could change the future of this region’s growth prospects.
It certainly could. You mentioned the governmental organization called Tkuma. The government just recently passed a law saying that the war is going to be known as the Milchemet Ha’Tkuma, the War of revival. That, I think, is a very far stretch. It’s not likely to happen. But this clearly is a time in Israel’s history, whether the government mandates it as a name or not, when the country really sees an opportunity to rebuild. Some of it related to the war, but some of it related to social divisions and issues that had come up before. I think many people, even though we are faced with many, many, many problems at the moment, see this as a moment really pregnant with tremendous opportunity for the country, socially, economically, strategically, militarily, diplomatically. We have a lot of work to do and so on and so forth. I want to ask you three quick questions by way of beginning to wrap up. Number one is we didn’t mention if the hotel yet has a name. Number two, something about the timeline here. When are people who are planning Pesach trips or weddings or bar mitzvahs or whatever? When should they start thinking about this? And the last thing is, if anybody’s listening, you mentioned something about investors before, but if anybody’s listening who has an interest for whatever reason and getting involved in an investment, are you open to that? And we’ll put links for addresses and stuff if you are in the notes for today. So name, timeline, and investors.
Adir Waldman
Sima.
Simone Gross
Okay, so we don’t have a name yet, and I can already anticipate Adir’s groan, but one of the images that I give to people when I talk about this is the Japanese concept of kintsugi, which is that golden joinery when you break something. And so to me, our project is like the golden scar of the Otef, and it’s going to help seam it back together and make it stronger. And so that’s where my head always goes when we think about names, but we haven’t done that yet.
The person who picks the final name gets a free two-night stay or something like that?
Simone Gross
Exactly. Or our anchor investor gets to pick the name. Be the first one in and help us pick our name.
Timeline?
Adir Waldman
Tomorrow.
Simone Gross
Exactly. When I first joined the project, I was hoping we’d be open by April 28 for my son’s bar mitzvah. I would love to make Pesach there. My whole extended family knows that. And so that is still a real goal for me. Realistically, I think it might be more like 2029. Big piece of this will be now that things are quieter. That was a big question mark on timeline. It’s how quickly we can fundraise and get through permitting.
So this is basically within four years, you see this hotel being open.
Adir Waldman
We’ve done a tremendous amount of work in the last two years. We’ve been waiting for the moment that happened a week ago, where suddenly the skies begin to clear, and we can actually say to people, Hey, we talked to you about this. Can we have a commitment? And now we’re ready. We’re off to the races.
So that leads us right to this. If there are people who are listening who are asking themselves, just as the two of you were, what can I do to help move Israel forward? What can I do to help the healing? And they in their own particular position to be investors in a project like this, you’re open to those kinds of investors?
Simone Gross
Totally. But we’re also, it’s much broader than that because we’re also open to equity and loans from federations, foundations, concessionary capital from donor and visor funds. There’s a lot of different ways to come into this project. And of the investors that we already have some commitments from, they’re all coming in in different shapes and sizes. So it’s really back to that amazing collaboration that’s happening both internally in Israel and in the US. We’re seeing all stripes. And Adir and I have a little friendly rivalry about who’s going to bring more in from their backyard.
Well, I’ll just say this by way of wrapping. I think that this The last two years have changed so much. A lot of it for the worse, but a lot of it for the better. One of the things that we’ve seen between Israel and diaspora communities was a tremendous outpouring of first grief and then support from the diaspora. Every single time I went down to the Otef to avocados to pick avocados, to pick whatever, and discover muscles that I didn’t know were in my body because they ached the next day. There were always tons and tons of people from outside of the country who come, including, by the way, non Jews from Germany who’d come by bus loads. It was really very, very inspiring. There was also a bit of a breakdown, as many Americans just particularly felt very alienated by some of Israel’s policies and some of Israel’s conduct of the war. Who’s right and who’s wrong is irrelevant at this moment, but we do know that the relationship was really tested in a way that was sad for many of us. I think a project like this, whether a person is simply involved with their federation or whether a person is a philanthropist themselves, whether a person is an investor or a person will just eventually come and become part of this because they’re going to go to it, is opportunity not only for building the Otef, but it’s building that relationship as well. Israeli business people are going to be involved in this. Diaspora people are going to be involved in this. It’s one of those many, many, many projects that are going to start sprouting up around Israel, which is an opportunity for the world Jewish community and beyond the world Jewish community to get together and help to rebuild, which is exactly what Tkuma means. So it’s very, very exciting. I have to say when Adir, who I know, again, from our previous conversation about his correct work, when he reached out and told me about it, I immediately asked if you guys would come on because I think it’s just a project, certainly I had never heard of it, and I’ve never heard of it. I’m assuming the vast majority of people listening to us today have not heard of it. It’s super important and super inspiring. It’s important for people to know about it, but it’s inspiring at this particular moment in Jewish history for people to think not only about what was destroyed, but about what’s being built. So Adir Waldman and Simone Gross, thank you both very, very much for taking time out of what I know are crazy busy schedules on relatively short notice to get together. And I look forward to the day when the three of us can have a glass of wine at the hotel, whatever its name will be.
Adir Waldman
Amen. Amen. Thank you.
Simone Gross
Exactly. Thank you. And you’ll record your next podcast there.
Very good. That’ll be great. Anyway, we look forward to continuing the conversation. Wish you a lot of luck and success in moving this forward.
Simone Gross
Thank you so much.
