[Q&A] "Eulji Myeonok Faces Demolition... Focus on Preserving Sewoon Industrial Ecosystem"

[Asia Economy Reporter Kim Yuri] Seoul City announced a comprehensive plan on the 4th for the redevelopment project of the Sewoon Redevelopment Promotion District, which was fully reconsidered early last year to preserve the industrial ecosystem around Sewoon Sangga and the living heritage such as Eulji Myeonok.

The city plans to preserve the existing industrial ecosystem by revitalizing urban manufacturing around Sewoon Sangga while simultaneously striving to innovate existing industries through fostering new industries. Industrial hub spaces and programs for the resettlement of existing small business owners and the fostering of new industries will be supported by public funding and the utilization of available sites.

However, the preservation of living heritage (in its original form), which was a key aspect of the reconsideration, has become practically difficult, as Eulji Myeonok is effectively heading toward demolition. The city plans to decide the future of long-established stores in the area, such as Joseonok and Yangmiok, after gathering opinions from the parties involved, under the principle that "designated living heritage stores will not be demolished against the owners' wishes."

Below is a Q&A session.

* Since the announcement of the reconsideration last year, there has been great interest in whether Eulji Myeonok would be preserved. Although there were reports, it is effectively heading toward demolition. How will consultations with stakeholders regarding the preservation of long-established stores proceed?

= Regarding the preservation of long-established stores, the principle was that "designated living heritage stores will not be demolished against the owners' wishes." The city and the district office have met with the operators several times and proposed various alternatives, but ultimately, Eulji Myeonok's position is that they oppose only the Eulji Myeonok building remaining in its original place. They want to move into a newly constructed building but require further discussions on the business area and methods during construction. They have requested Seoul City and Jung-gu Office to mediate so that detailed measures can be prepared. Since the conflict has been very deep, the city will mediate and concretize the process of mutual agreement. From the city's perspective, giving a signal that "living heritage can be demolished unconditionally" could lead to continuous demolitions in the future. Therefore, the existing principle of "not demolishing against the operators' wishes" will be upheld, respecting the actual operators' opinions, even if it takes time.

* How will the rent for public rental stores be set?

= The average rent per 3.3㎡ of exclusive area ranges from about 100,000 to 220,000 KRW. Some opinions emphasize the importance of a concentrated cluster rather than rent, while others suggest the need for cheaper and larger spaces. It varies by type. The newly created public rental stores will be offered at the current rent level.

* Regarding Eulji Myeonok, Mayor Park Won-soon had said he would preserve the building's substance. Is it ultimately being demolished? You said you would not give a signal for unconditional demolition. What will you do?

= The city promised that demolition following legal procedures would not occur against the operators' wishes. Eulji Myeonok has had many twists and turns. After direct talks, it was found that the owner does not want to preserve the building as is. Since the owner does not want that, various alternatives and negotiations have been proposed, and the owner has requested mediation. Specific measures will be developed during this process. (Are Yangmiok and Joseonok still undecided?) Yes.

* I understand that negotiations over land compensation are not going well. How will mediation proceed?

= The project implementer is progressing with projects in zones 3-1, 4, and 5, and only needs to prepare industrial ecosystem measures for zones 6 and 7. Zone 3-2, which includes Eulji Myeonok, requires resolution of Eulji Myeonok and industrial ecosystem issues, so it may take time. Meanwhile, if negotiations between business owners and stakeholders proceed well, the situation will be resolved.

* There is mention of creating spaces for tenants and small business owners through private donations. Are incentives given to developers who make such donations?

= According to the promotion plan, a certain portion of public contributions is required. Previously, many donations were for roads or parks, accounting for 10-15%. It was concluded that this did not significantly benefit local governments. An example of receiving other specific public facilities in the area is underway in zone 6 (park site). The building is expected to be completed in 2023. That land was also created during the zone 6 redevelopment project. Using that land, a hub facility for printing is being established. The direction is to not arbitrarily designate land as a park but to secure land through public contributions and invest more budget to build the most suitable facility.

* There were expectations for urban housing supply. How will the housing part be supplemented after the cancellation?

= There is no restriction on housing supply in the urban area. However, caution is exercised regarding redevelopment promotion districts. If this area is developed, many housing units will be supplied. If conflicts decrease and development proceeds, housing supply will be smooth according to the scale of development. About 1,000 units are planned for zones 3-1, 4, and 5. Approximately 3,000 units are expected in zone 3, but no fixed timeline is set; if the project proceeds without conflict, it is expected to be completed smoothly. The canceled area had no development plans at all. It was canceled according to the law due to the sunset clause.

* When will the public rental stores in zone 3-6 be completed?

= In the past, zones 3-2, 6, and 7 were planned to proceed simultaneously. Previously, zone 3-6, designated as a park site, would have been demolished, but currently, about 40 businesses are located there. By August next year, 100 units supplied from LH reserved land will be available, and after about two years, a large number will be secured. With slight timing adjustments, most who want to move will be able to do so.

* The project was halted following last year's reconsideration after receiving project implementation approval. Are there incentives or compensation plans for the implementers?

= Because conflicts were severe, reducing conflicts itself is an incentive for project owners. The redevelopment plan grants authority to accept the plan, imposing obligations but also providing benefits.

* 152 areas were canceled; these areas had been under development since 2009. Not all landowners would have agreed to conversion to regeneration. How were they persuaded? Have they been persuaded?

= The area was designated as an urban redevelopment zone since 1979. Individual development was not allowed; combined development was required, and project implementers could forcibly acquire land under certain conditions. However, until now, most owners could not exercise control over their land individually, resulting in deterioration. Also, consensus on large building development was difficult. Using existing lot sizes, plans will be established to build buildings suitable for the urban area. Even if not all large buildings, 'Hipjiro' has many quaint buildings that add value as an urban area. Plans will be made for alley regeneration or new construction under building laws according to desired directions.

* Those who have applied for project implementation approval must also prepare public contributions. Who and how will this be arranged?

= This was discussed by zone. Zones 5-1 and 3 are applying for project implementation approval. They plan to build new buildings on the landscape green space portion, which has been donated over time. This will be done in two stages: first, priority demolition of the landscape green space and creation of facilities accommodating 110 stores. After relocation and resolving existing tenant issues, development will proceed cyclically with time differences in the same area. The project owners in this zone and the Supyo area have agreed.

* Considering differences in industry types such as manufacturing or distribution, floor levels, locations, and sizes may vary. Were these factors considered?

= Temporary stores were created in zones 3-1, 4, and 5. About 31 stores remain. Most prefer the first floor; if not possible, they go up to the second floor. Due to limitations in supply methods, some move to vacant stores in surrounding areas. Detailed preliminary surveys show slight differences. It is believed that compromises can be found.

* How will regeneration in the canceled areas proceed?

= One reason for no development in canceled areas was that redevelopment promotion plans or redevelopment plans mandated large-scale development. Zone 6 was too large to reach consensus. Although changed in 2014, it can be seen as being subdivided into over 1,000 lots again. Issues such as road widths and other regulations that hinder development will be relaxed gradually based on residents' opinions. Remodeling costs are also supported in regeneration areas.

* What is the expected resettlement rate of tenants?

= According to surveys, about 60% move to nearby areas, and the rest want to relocate to wider areas such as Geumcheon-gu or Yeongdeungpo-gu (Mullae-dong). Those wishing to change locations will be provided with such conditions, and those who must stay in the area will be provided with temporary stores.

* What is the total project duration for the cyclical redevelopment?

= Rather than demolishing all at once, some areas will be demolished first and relocation stores created, so the project duration is expected to be extended by 2-3 years compared to usual. However, if conflicts decrease, the overall project period may be similar or even shortened.

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