## Facts

- State-administered land was leased long-term to agricultural communities under leases limited to agricultural use.
- Increased demand for housing and industry led state authorities to pursue conversion of agricultural land to residential and industrial uses.
- A land-policy decision (Decision 727) provided that agricultural lessees who returned land to be rezoned for residential construction would receive compensation tied to the land’s market value in its new residential use, producing much higher payouts for centrally located lessees than for peripheral lessees.
- A separate decision (Decision 717) allowed agricultural lessees to establish industrial zones on leased land at discounted rental terms (set as a percentage of the land’s value) and to partner with private firms, enabling substantial profits for some lessees.
- A public-interest organization petitioned for judicial review, arguing that these decisions conferred disproportionate, location-driven financial benefits on a narrow group, contrary to equality and proper administration of public land.

## Issues

1. Whether land-policy decisions granting substantial rezoning-related compensation and discounted industrial-development opportunities to agricultural lessees were unreasonable or unlawfully unequal under public and administrative law.
2. Whether the State’s management of publicly owned land permits transferring most of the value created by rezoning and development rights to existing lessees rather than to the public.

## Decision

- The court partially granted the petition.
- The court invalidated or significantly limited key aspects of Decisions 727 and 717.
- The court required reconfiguration of the compensation and development arrangements to better comport with equality, reasonableness, and the public character of state land.
- The court accepted that incentives to release or repurpose agricultural land could be legitimate but held that the challenged schemes’ scope and design went beyond lawful bounds.

## Legal Principles

- Public land administrators act as trustees of a public resource and must manage land for the benefit of the public rather than to confer windfall gains on discrete groups.
- Equality constraints apply to allocation of public resources; differential treatment must rest on relevant justifications and must not produce arbitrary, location-driven disparities absent sufficient reason.
- Administrative reasonableness and proportionality limit the extent to which the State may transfer “planning gain” (value increases from rezoning and development permissions) to private parties.
- Long-term lessees may have legitimate reliance interests warranting some compensation, but the primary share of value created by rezoning should remain with the public.

## Conclusion

The court curtailed land-policy schemes that shifted substantial rezoning and development value from the public to agricultural lessees, holding that state land must be administered as a public trust and that large, geographically contingent benefits required stronger justification and a more proportionate design.


Org. for a New Discourse v. Minister of Nat’l Infrastructure, HCJ 244/00, 56(6) PD 25 (Isr. 2002)