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April 25, 2016 7:00 am

Real Estate Moguls Find ‘Unpolished Diamond’ in Akko, Mixed Jewish-Arab City

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Muhammad Abu Marwan in a guest room in Akko's “Arabesque: An Arts and Residency Center.” Photo: Orit Arfa.

Muhammad Abu Marwan in a guest room in Akko’s “Arabesque: An Arts and Residency Center.” Photo: Orit Arfa. – Muhammad Abu Marwan takes me through the refined, artsy living room of “Arabesque: An Arts and Residency Center” in the Old City of Acre (Akko), Israel, with the noble air of an effendi, as if he were the proud owner.

Leading me into a beautifully tiled, luxurious guest room furnished with antique crafts, he explains how the room was once a stable for his son’s horses. It doesn’t seem much love was lost on the horses, which were sold not long after Arabesque’s owner, American-born novelist and artist Evan Fallenberg, purchased the neglected, centuries-old property with the aim of turning it into a retreat space for intellectual types.

“I consider him my partner even though he’s really a neighbor,” Fallenberg tells over the phone, a few days after Arabesque’s April opening.

Abu Marwan is not an employee of Arabesque. His day job is as a custodian at a local school.

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“We’re good neighbors together,” Abu Marwan says in Hebrew. “You wouldn’t believe how it was before. The minute [Fallenberg] bought it, he cleaned it up.”

Abu Marwan’s renovated kitchen — where he happily introduces me to his wife as well as his visiting daughters and grandchildren — overlooks the sparkling, peaceful courtyard. Over the years, Abu Marwan’s home had extended into the for-sale property.

“I decided the best way to become a new member of this neighborhood was to say, ‘I’m going to cede that land and I will be content with my share of the courtyard,’ and they were only too happy to have those rooms,” Fallenberg says.

Arabesque is just one example of the kind of transformation taking place in what were once neglected properties in the historic Old City of Akko, a Western Galilee municipality famous for Crusader-Muslim showdowns and Napoleon’s failed attempt to take its port from the Ottomans. In 2001, the United Nations Educational, Scientific and Cultural Organization (UNESCO) named Acre as a World Heritage Site, a designation that spurred the municipality to cultivate world-class tourism attractions. Yet until now, Akko didn’t have the high-end accommodations to match the prestigious UN designation.

Creative entrepreneurs are increasingly realizing how this mixed Jewish-Arab city offers a model of coexistence, at a time when Muslim-Jewish tensions are heightened due to the spate of stabbings and other terror attacks against Jews in the streets of Israel. With its stone seawall recalling the city’s days as a fortress and a lively port, Akko evinces the antique charm of places like Jerusalem and Jaffa — minus the commercialization.

These entrepreneurs have no intention of gentrifying Akko’s Old City or tearing down any of the centuries-old, dilapidated buildings to make way for big developments.

Real estate investor Meir Davidson hadn’t been to Akko since he was in 3rd grade, when a friend told him about unconventional real estate opportunities here. All he could conjure up when he heard of Akko was good hummus, but when he came on a tour with a real estate agent, he discovered what he calls an “unpolished diamond.”

“We came up with an idea to buy some more properties and to renovate them, and to make them tourists sites. And the concept is, if normally people go to vacation, they usually take a room in the hotel, but the hotel is a unit in and of itself, not involved with the community and neighborhood,” Davidson tells from the roof of an Ottoman building he had purchased and refurbished to include his own home and a chicly designed B&B unit.

Davidson is among the few Jews who live in the Old City, where most of the residents are Muslim Arabs. In the modern city of Akko, however, Jews comprise about 70 percent of the population. Davidson moved to Akko to get a feel for the city, and to ensure that changes are made with sensitivity to the local culture and with the residents’ cooperation — not to mention for the breezy seaside view.

“Working with the community is very important to us,” Davidson says. “We’re not coming to change the city, clean up the city — we’re coming to the city.”

Chen Carmi, a real estate agent whose HouseStory agency specializes in Akko Old City properties, believes that by and large, Arab residents welcome these kinds of bottom-up initiatives. The renovations create an economic ecosystem that infuses new sources of income into the city. Most investors hire local contractors, technicians, and custodians to revamp the properties from ancient dumps into rooms that would befit Turkish lords. Davidson plans to operate about 20 B&B units, although breakfast will not exactly be served. He’ll encourage visitors to take advantage of the local souk (Arab marketplace) and the restaurants that have recently made Akko a culinary tourism destination.

Compared to the costs of apartments for sale across Israel, the initial investment comes off as a bargain. For example, Carmi showed me a 115-square meter (about 1,238 square foot), two-story compound, replete with stone Ottoman arches, that is in the process of being turned into two guesthouses. The property cost the buyer NIS 345,000 (about $93,000), not including the NIS 300,000 (about $80,000) renovation. Investors never know what kind of architectural and even archaeological treasures they might find after some digging. Stonework and even windows are often discovered only after peeling off drywall or plaster. The Israel Antiquities Authority then regulates how Old City properties are restored.

“There is a type of person who values the uniqueness of antique properties,” says Carmi, whose clients include investors from the US and Europe. “But there are also more expenses in maintaining such properties.”

To make a good return on investment, an investor’s best bet is to turn these properties into a tourism operation, like a guesthouse or gallery, because monthly rent in the Old City would amount to the cost of a few nights in a high-end hotel room. Some of Carmi’s clients have turned their property into a vacation home by the sea.

While Davidson’s tourism units are in a trial phase, he believes that Akko has been shielded from the violence plaguing cities like Jerusalem, and he’s optimistic that the charm of Akko will trump fears people may have about venturing into a mixed city. As a new resident and developer, he has not experienced hostility or complaints from locals, who largely recognize the benefits of peace between neighbors.

“The encounter people have with Arabs via the media is violent and difficult,” Davidson says, “but whoever can be open, and see that they are good people and great neighbors and people with good hearts, will come here and try.”

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