Seoul City and Hyundai Motor Group kicked off discussions Tuesday over the use of land in Gangnam bought from Korea Electronic Power Corp., as controversy persisted over the scope of its development.
(Seoul Metropolitan Government)
In September last year, the conglomerate purchased the 79,345-square-meter plot of land in southern Seoul for 10.55 trillion won ($9.5 billion), which was nearly triple its appraised value. It proposed to invest about 5 trillion won in constructing its new headquarters and other buildings over the next four years.
Earlier this month, the auto-making giant proposed building a 115-story headquarters and a 62-story hotel and convention center with the aim of “strengthening the city competitiveness by creating an international exchange complex.”
This proposal is in line with the city’s plan to turn the neighborhood into a hub of international “meetings, incentives, conventions and exhibitions,” or MICE.
The company stressed that the new construction would bring a production inducement effect of 262.6 trillion won and create over 1.3 million jobs over the next two decades.
It also offered to pay 1.7 trillion won as a public contribution fee if the city changes the legal use of the land site. This accounts for 36.75 percent of the estimated value of the land.
In order to carry out the submitted proposal, the official use of the land site needs to be changed from “general residential” to “general commercial.”
The Seoul Metropolitan Government and the company will finalize the ratio of the public contribution fee by the end of this year. The carmaker will likely break ground no later than 2017, after all the administrative process is completed, sources said.
The construction plan, however, faces hurdles from Gangnam-gu residents. The city government has planned to spend the public contribution fee on developing the neighboring region into the MICE zone. This region includes areas of KEPCO land and Jamsil Sports Complex,
The Gangnam-gu Office, however, opposed the city’s move, claiming that the public contribution fee should be used only on the Gangnam-gu district, as it was earned from the KEPCO land.
The KEPCO land site is under the Gangnam-gu Office’s authority while Jamsil Sports Complex is under the Songpa-gu Office’s control.
Last month, Gangnam-gu Mayor Shin Yeon-hee threatened to file a lawsuit against Seoul City for ignoring the public opinion of the Gangnam residents, if it continued to go ahead with the original plan.
Seoul City, however, flatly denied Gangnam-gu’s argument, saying that it will strictly carry out the plan in accordance with the law.
By Lee Hyun-jeong (
rene@heraldcorp.com)