City to Convert Korean Air Songhyeon-dong Site into 'Park'... "Considering Quick Payment via LH Pre-purchase" (Comprehensive)

From 'Cultural Park' to 'Park'... "Will Publicize Additional Details for Discussion"
"Considering Kwon Ik-wi Mediation, Legally Binding Notice Deferred Until Adjustment Completion"
Discussing Specific Plans Such as Purchase Price Determined by Appraisal and Exchange of City Land After LH Sale
Korean Air "Will Continue Consultations with City While Observing Kwon Ik-wi Mediation Results"

[Asia Economy Reporter Kim Yuri] The Seoul Metropolitan Government has decided to designate the Korean Air Songhyeon-dong site as a 'park.' However, the official announcement of the decision, which carries legal effect, will be postponed until the ongoing mediation by the Anti-Corruption and Civil Rights Commission (ACRC) is completed. The city plans to continue smooth consultations with Korean Air regarding the sale. Korean Air also stated, "We will monitor the results of the ACRC mediation and continue to cooperate closely with the Seoul Metropolitan Government and related agencies."

On the 7th, Seoul held the 14th Urban and Architectural Joint Committee meeting and announced that the district unit plan decision (amendment) for Bukchon, including the Korean Air Songhyeon-dong site, was 'approved with modifications.' The amendment includes abolishing the 'special planning zone' designation for the 37,141.6㎡ former U.S. Embassy staff dormitory site in Songhyeon-dong and designating it as a 'park.' However, the official announcement carrying legal effect will be deferred until the ongoing ACRC mediation is completed. The city stated, "Since we are currently negotiating specific evaluation methods for this site through ACRC mediation, issuing the official announcement now could affect this process, so we will proceed with the announcement after the ACRC mediation is concluded."

◆"Purchase price to be based on 'appraisal'... Specific methods under negotiation"

The remaining issues concern the specific methods for determining the sale price and the timing of payment. Both sides have broadly agreed on the sale to the city and determining an appropriate price through appraisal. The city emphasized, "In June, Korean Air filed a grievance with the ACRC, and under ACRC mediation, three attendance meetings, working-level meetings, and agency head interviews have been held to discuss the timing and methods of the site sale."

Therefore, the Urban and Architectural Committee meeting was held to proceed with related procedures such as securing the budget for the site purchase. The city said, "Urban planning decisions must be made to proceed to the next steps; without this, controversies only accumulate," adding, "Procedures according to relevant laws must be followed to secure the budget for the site purchase, so the Urban and Architectural Committee review and related procedures were expedited today." Continued controversy would ultimately make private sales difficult and create a vicious cycle where public funds cannot be disbursed.

The frequently mentioned '467 billion KRW' is an arithmetic figure derived by applying a compensation multiplier to the publicly announced land price according to the 'Preliminary Feasibility Study Execution Guidelines,' and the appraisal value is generally set higher than this amount.

◆Korean Air must recover sale amount by early next year... "Detailed plans under discussion including LH's pre-purchase and land exchange with city-owned land"

Considering Korean Air's situation of needing to recover the sale amount by early next year, the city revealed that the Korea Land and Housing Corporation (LH), a third party, is also being considered in detail to pre-purchase the Songhyeon-dong site and later exchange it with city-owned land. The city said, "Due to administrative procedures, Korean Air cannot sell at their desired timing, so we have continuously sought solutions such as purchase through a third party (LH). If LH purchases first, payment can be made to Korean Air earlier, and Seoul, Korean Air, and LH are currently discussing detailed procedures for site purchase and exchange." LH plans to utilize the land reserve system to pre-purchase and promote the exchange of the Songhyeon-dong site with city-owned land. This will enable early payment of the land sale price.

The Seoul Metropolitan Government emphasized that the Songhyeon-dong park project is a nationally important project from historical and cultural perspectives. It is located on a major historical and cultural tourism axis connecting Seochon-Gyeongbokgung-Changdeokgung east to west, and Bukchon and Insadong north to south, but has been neglected for 23 years, causing disconnection with the surroundings. This land was used as a residence for the Chosen Industrial Bank (owned by the Oriental Development Company) during the Japanese colonial period, then seized by the U.S. military after liberation and used as U.S. military housing and the U.S. Ambassador's residence. In 1997, Samsung Life Insurance purchased it, and in 2008, Korean Air bought it for 290 billion KRW. Korean Air had planned to develop a hotel and complex cultural district but canceled the plan due to legal restrictions on hotel construction.

The city stated, "Previously, as it is a first-class general residential area with a floor area ratio of 150% and up to three floors, office facilities and multi-family housing were not permitted. Despite several attempts by private entities to pursue large-scale profit-oriented development, all developers withdrew their plans due to legal restrictions and lack of public support." It added, "Considering the historical and cultural value of Songhyeon-dong, it should have become a public space when it was first sold to the private sector in 1997. Nearby, the former GIMUSA site became the National Museum of Modern and Contemporary Art, and Pungmoon Girls' High School is also set to become a Craft Museum, but Songhyeon-dong remains a forbidden land. If the public does not purchase it now when Korean Air has decided to sell, the Songhyeon-dong site will never be used for public purposes."

The city plans to continue smooth consultations with Korean Air. Kim Hak-jin, Seoul's Deputy Mayor for Administration, said, "We appreciate the cooperation of the ACRC, Ministry of Land, Infrastructure and Transport, financial authorities, and related agencies who have worked to resolve this issue. We will continue to cooperate closely with Korean Air and related agencies."

Korean Air also expressed its position on Seoul's decision, stating, "We will monitor the results of the ACRC mediation and continue to cooperate closely with the Seoul Metropolitan Government and related agencies."

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