Korean Air Submits Statement to Anti-Corruption Commission Requesting to Stop Seoul City's Park Development Plan

"Urgent COVID-19 Crisis... Designating Cultural Parks Takes at Least Several Years"

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. The city announced on the 28th that it submitted the 'Songhyeon-dong Korean Air Site Park Decision Plan' for consultation at the Urban and Architectural Joint Committee held on the 27th. The decision plan includes changing the site, which is 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 Yoo Je-hoon] Korean Air has submitted a statement to the Anti-Corruption and Civil Rights Commission regarding the Songhyeon-dong site in Jongno-gu, which is embroiled in a conflict with the Seoul Metropolitan Government over park development, requesting the commission to recommend that Seoul suspend the unilateral urban planning decision process.

Korean Air announced on the 12th that it had submitted such a statement to the commission. This action follows reports that Seoul plans to push forward with a district unit plan amendment to convert the Songhyeon-dong site owned by Korean Air into a cultural park, which is scheduled to be presented to the Urban and Architecture Joint Committee (DoGeonWi) by the end of this month.

Korean Air had prepared a self-rescue plan to secure liquidity by selling the site within the year amid the liquidity crisis caused by the COVID-19 pandemic. According to industry sources, the market price of the site is estimated to be at least 500 billion to 600 billion KRW.

However, with Seoul announcing plans to convert the area into a park, Korean Air’s plan to sell the site within the year is increasingly unlikely to succeed. Although Seoul intends to purchase the site in parts for about 400 billion KRW, this is a difficult condition for Korean Air, which needs to raise capital amounting to 2 trillion KRW by the end of next year.

The district unit plan amendment, expected to be submitted to the DoGeonWi at the end of this month, includes repealing the previous designation of the Songhyeon-dong site as a special planning zone and establishing a cultural park in its place. Seoul had designated the site as the "U.S. Embassy Staff Residence Special Planning Zone" in 2010, explicitly recognizing the development potential of the Songhyeon-dong site by relaxing usage and height restrictions, but the company states that Seoul abruptly reversed its position.

In particular, Korean Air points out that if the site is designated as a cultural park, the city must adopt the urban planning facility project method, which is expected to take several years just for the related procedures. They also state that even if expropriation is enforced, related procedures such as lawsuits are inevitable.

Korean Air said, "If the district unit plan amendment passes, forced expropriation will become a foregone conclusion, and if the expropriation process proceeds, the fair value of the Songhyeon-dong site cannot be received," adding, "In fact, Seoul is likely to acquire the Songhyeon-dong site at a price far below the market value."

Meanwhile, Korean Air applied for a grievance complaint to the Anti-Corruption and Civil Rights Commission in June and has submitted opinions to the commission regarding the illegality of the cultural park designation and the necessity of selling the site within the year. It is known that the commission is currently conducting investigations and reviews.

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