Tensions in Jerusalem’s Armenian Quarter continue amid real estate battles and tax disputes

This article is based on reporting from Sophie Holloway for Lacuna Magazine and Marinella Bandini for the Catholic News Agency.

JERUSALEM — In the shaded lanes of Jerusalem’s Armenian Quarter, a centuries-old community is locked in a bitter struggle over the future of its historic enclave. Once safeguarded by arcaded churches and the silent authority of the St. James Monastery, the quarter now faces what residents call an “existential battle” pitting local families and activists against real-estate speculators, municipal authorities and, they say, tacit government indifference.

A Hidden Deal That Shook the Quarter

In March 2020, the Armenian Patriarchate quietly signed a ten-year lease with the Municipality of Jerusalem, permitting non-Armenian motorists to use 90 parking spaces in a grassy plot known as the Cow’s Garden. At first glance, the arrangement seemed innocuous — “parking spaces are gold because of their scarcity,” as campaigner Kegham Balian later explained — but the contract included a clause allowing the municipality to annul the lease if a developer expressed interest in the site.

That caveat was swiftly invoked the following year, when Patriarch Nourhan Manougian and two senior clerics, Archbishop Sevan Gharibian and Father Baret Yeretzian, sealed a 98-year sublease with Xana Gardens Ltd., an Israeli real-estate firm, for an up-front payment of $2 million and annual rent of $300,000. Xana Gardens immediately announced plans for a seven-star luxury hotel, threatening to transform the quarter’s narrow streets and displace families living on the parcel.

Public Outrage to Popular Protest

Word of the clandestine deal unleashed a wave of protests. Within months Father Yeretzian was dismissed and defrocked. The Patriarchate attempted to distance itself, claiming Manougian had been “duped,” while Yeretzian insisted he had full ecclesiastical authorization.

In October 2023, under mounting pressure, the Church sent a cancellation letter to Xana Gardens — but the damage had been done. On 5 November 2023, armed representatives of the developer, flanked by settler-militia and dogs, stormed the Cow’s Garden to demand entry.

Residents had been maintaining a nightly vigil, camping in makeshift barracks to guard the site. Their numbers swelled to hundreds of days of continuous occupation, complete with donated sofas, toasters and refrigerators as symbols of defiance and communal solidarity.

Legal Front

In February 2024, local Armenian leaders filed a class-action lawsuit in the Jerusalem District Court seeking to void the Xana Gardens lease. Their arguments rest on three pillars: Firstly, Patriarchate statutes forbid leases longer than 48 years; Secondly, any lease of 25–49 years must be approved by the St. James Brotherhood, a requirement never met; and thirdly, a 16th-century waqf endowment mandates that, absent heirs, Quarter property revert to the Armenian Christian community.

Xana Gardens counter-sued in September 2024 to enforce its lease, setting the stage for a landmark discovery hearing in September 2025.

Arnona Tax Dispute

While the Quarter grapples with threats to its physical heart, it also faces financial peril. Since January 2023, the Jerusalem municipality has demanded roughly 21 million Israeli Shekels (ILS), about $5.7 million USD, in “Arnona” property taxes from the Patriarchate on properties — some leased back to the city — that enjoyed historical exemptions. Bishop Koryoun Baghdasaryan, who inherited the real-estate portfolio in January 2023, insists many of the bills are baseless and points out that the municipality itself owes the Church over 10 million ILS in unpaid rent dating to 2017. A district court injunction has paused foreclosure proceedings, but hearings have been repeatedly postponed amid adverse weather and public outcry, leaving the Patriarchate in limbo.

Daily Harassment and Demographic Fears

Beyond the courtroom and council chambers, Armenian residents report daily indignities: walls defaced with “Death to Armenians” graffiti, clergy spat upon and pepper-sprayed, peaceful vigil-keepers branded “terrorists” by nearby police when they confronted extremist settlers. “They say ‘goys,’ they say ‘death to Arabs,’” Kegham Balian recounts. “Clergy are easy targets in their robes.”

Even the Eurovision Song Contest wasn’t safe, and not due to the controversy most would associate with Israel’s participation. During the broadcast, after Armenian’s performance, an Israeli broadcaster remarked, “I can’t believe we gave a whole quarter in Jerusalem to these guys.”

Many see these acts as part of a broader strategy, dating back to 1967, of demographic engineering in East Jerusalem — evictions, demolitions and legal ambiguities aimed at reducing Christian and Arab presence in favor of Jewish settlement.

International Solidarity and an Uncertain Horizon

To fund legal fees and sustain their 500-day occupation of the Cow’s Garden, activists have turned to the Tatoyan Foundation Center for Law and Justice and toured US cities, securing bipartisan congressional support. In February 2024, the Patriarchs and Heads of Churches in Jerusalem issued a joint statement decrying both the Xana Gardens affair and the Arnona demands as “reckless moves” jeopardizing Christian institutions throughout the Holy Land.

Yet the Quarter’s defenders remain wary. If the 98-year lease survives judicial scrutiny, tourism-driven development could irreversibly alter its character and displace those who have called it home for millennia. If tax exemptions are rescinded, the community risks losing vital social-service revenues. “This isn’t just a land deal; it’s a fight for our lives — and for Jerusalem’s Christian soul,” says Balian.

With the next major court dates still half-a-year away, the standoff continues both in the courts and on Jerusalem’s ancient cobblestones. For now, the future of the Armenian Quarter, and the pluralistic tapestry of the Old City, remains uncertain.