Seoul City: "We Will Buy Korean Air Songhyeon-dong Site at Fair Price"

On the 11th, Distribution of Materials Requesting Reconsideration of Land Purchase Negotiations for Songhyeon-dong Site to Korean Air

Seoul City is promoting a plan to change the Korean Air site, currently an empty lot in Songhyeon-dong, Jongno-gu, into a 'cultural park' under urban planning facilities. On the 28th, the city announced that it submitted the 'Songhyeon-dong Korean Air Site Park Decision Plan' for consultation at the Urban and Architecture Joint Committee held on the 27th. The decision plan includes changing the site, currently designated as a special planning zone within the Bukchon district unit plan, into a cultural park. The photo shows the Korean Air site in Songhyeon-dong, Jongno-gu, Seoul, which Korean Air is currently promoting for asset sale. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Onyu Lim] The Seoul Metropolitan Government has requested to resume negotiations regarding the purchase of the Songhyeon-dong site owned by Korean Air, stating that "the purchase price will be determined according to market value through an appraisal."

On the 11th, the city released a document titled 'Request to Resume Negotiations for the Purchase of Songhyeon-dong Site from Korean Air,' responding to media reports that "if Seoul City has the intention to acquire, it is appropriate to participate in a competitive bidding." The city clarified, "The reason for not participating in the bidding was due to the need to complete related procedures such as investment review, city council approval, and public property deliberation before finalizing the purchase price. This does not mean that the city will not purchase at market value or lacks the intention to acquire."

The city is currently promoting the conversion of the Songhyeon-dong site into a park. Following the Urban and Architectural Joint Committee meeting held on the 27th of last month, where a proposal was submitted to change the Songhyeon-dong site, designated as a special planning zone within the Bukchon district unit plan, into a cultural park, the city announced earlier this month a revision to the Bukchon district unit plan decision, setting the compensation cost for the Songhyeon-dong site at 467.133 billion KRW, to be paid in installments until 2022.

The city also explained that it is considering various options such as early purchase of the Songhyeon-dong site and lump-sum payment of the purchase price, taking into account Korean Air’s situation. A city official stated, "We are exploring funding methods beyond the Seoul city budget through consultations with Seoul city-affiliated organizations, public institutions, and financial institutions." The city plans to officially request the resumption of negotiations to hear Korean Air’s specific conditions and demands and to prepare effective support measures accordingly.

Meanwhile, Korean Air is conducting a competitive bidding process for the sale of the Songhyeon-dong site, but as the city’s park conversion policy has been formalized, it is reported that no one responded to the preliminary bidding that closed on the same day. Although as many as 15 parties showed interest by obtaining the investment briefing document or expressing acquisition intentions, no one submitted a Letter of Intent (LOI) for the sale by the deadline.

Accordingly, industry attention is focused on whether Korean Air will completely withdraw its plan to sell the Songhyeon-dong site and come up with a new self-help plan, or reluctantly choose to transfer the site to Seoul City at a low price. Meanwhile, the Korean Air labor union has strongly opposed Seoul City’s insistence on park conversion, calling it irresponsible desk administration.

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