Proposal for Legal Amendment to Reduce Loan Fees for Small Merchants in Underground Shopping Malls Facing Management Crisis

At the 1st meeting of the 291st extraordinary session of the Seoul Metropolitan Council's Urban Safety and Construction Committee (Chairman Kim Gi-dae), a proposal was made to the National Assembly and central government to amend the "Act on the Management of Public Property and Goods" allowing local government heads to reduce lease fees for tenants of public properties such as underground shopping malls facing serious business difficulties due to infectious diseases or disasters.

[Asia Economy Reporter Jong-il Park] The Seoul Metropolitan Council's Urban Safety and Construction Committee (Chairman Kim Gidae·photo) proposed an amendment to the "Act on the Management of Public Property and Goods" to the National Assembly and central government during the 1st meeting of the 291st extraordinary session. The amendment allows local government heads to reduce lease fees for tenants of public properties such as underground shopping malls when they face significant business difficulties due to infectious diseases or other disasters.

This proposal comes as the recent outbreak of infectious diseases like COVID-19 has drastically reduced the number of visitors to large-scale gathering facilities such as underground shopping malls, leading to decreased sales. Small business owners operating in these facilities are reporting severe mental and economic hardships, prompting local governments to share the burden by reducing lease fees.

The government proposal, urgently adopted by the Urban Safety and Construction Committee, primarily aims to add the phrase "when faced with significant business difficulties due to natural disasters or other disasters" to Article 34, Paragraph 3 of the current Act on the Management of Public Property and Goods, which governs lease fee reductions.

Chairman Kim Gidae stated, "The damage to local merchants caused by COVID-19 is becoming increasingly severe," and added, "It is necessary for the government to take the lead in supporting tenants of public properties such as underground shopping mall merchants who are suffering greatly from decreased sales due to reduced foot traffic, thereby inducing ripple effects into the private sector."

If this proposal passes the Seoul Metropolitan Council plenary session on March 6 and is forwarded to the Ministry of the Interior and Safety and the National Assembly's Public Administration and Security Committee for legal amendment, local governments will be able to temporarily reduce lease fees according to reduction rates stipulated by ordinances.

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◇ Proposal for Amendment of Related Laws to Reduce Lease Fees for Public Properties Such as Underground Shopping Malls in Case of Disasters

Due to the recent outbreak of infectious diseases such as COVID-19, the number of visitors to large-scale gathering facilities like underground shopping malls has significantly decreased, leading to reduced sales. Small business owners operating these facilities are experiencing severe mental and economic damage.

For example, according to a Seoul city survey, among the 25 underground shopping malls in Seoul, Shopping Mall B saw an average daily foot traffic decrease of 29.5% on weekdays and 43.23% on weekends around January 20, when domestic infections were first reported. Merchants in underground shopping malls report sales declines of 60-70%.

Despite local governments' intentions to alleviate the economic hardships of local merchants operating public properties by reducing lease fees, there is currently no legal basis under the "Act on the Management of Public Property and Goods" to implement such reductions.

Therefore, the Seoul Metropolitan Council proposes adding the phrase "when faced with significant business difficulties due to natural disasters or other disasters" to the reduction clause in Article 34, Paragraph 3 of the current "Act on the Management of Public Property and Goods," allowing local governments to reduce lease fees for a certain period to mitigate the damage suffered by local merchants operating public properties due to disasters such as infectious diseases.

This content was produced with the assistance of AI translation services.