Seocho-gu Criticizes Seoul City's Change to 'Yangjae R&D District Unit Plan'... Seoul City States "Mayor Can Directly Initiate Necessary Plans"

Decision on Special Planning Zones for 14 Distribution Facilities Including Korean Cargo Terminal Site near Yangjae IC and Reorganization of Large-scale Site Development Plans... Seoul City Criticized for Announcing Partial Amendment Plan Containing Only Large-scale Site Plans

[Asia Economy Reporter Park Jong-il] Seocho-gu expressed strong regret over Seoul City's unilateral public notice of the partial amendment decision (draft) concerning only large-scale sites such as distribution business facilities in the 'Yangjae Residential District Unit Plan Reorganization (draft),' which aims to develop the 3 million㎡ area around Yangjae-dong into an innovation hub for the 4th Industrial Revolution.

The main content of the public notice implemented by Seoul City on the 28th of last month includes the deregulation and designation as a special planning zone of 14 distribution business facilities (415,324㎡), including the Korea Freight Terminal (Harim) site, limiting the allowable floor area ratio to 400%, and introducing R&D uses for large-scale sites such as LG and KT.

Unilateral Promotion Ignoring the Opinions of the Plan Initiator

Seocho-gu claims that since 2015, starting with the basic concept study for establishing the Yangjae knowledge hub, Seoul City and the Ministry of Economy and Finance have jointly announced various support policies to develop the Yangjae-dong area as an R&D hub. In 2016, the Seoul Mayor announced the 'Yangjae-Woomeon R&D Promotion Comprehensive Plan' to the media, marking the beginning of the Yangjae R&D activation plan's main trajectory.

Seocho-gu also initiated a study from 2016, held resident briefings attended by about 350 local residents, and meticulously drafted and supplemented the plan (draft) through multiple expert consultations. After holding a joint city-district report meeting in September 2020, the district issued a public notice for the district unit plan (draft) in October 2020 through consultation with Seoul City.

Thus, Seocho-gu was smoothly advancing the Yangjae R&D district unit plan according to laws and procedures. Currently, it is preparing traffic improvement measures to resolve chronic traffic congestion around Yangjae IC and is proceeding with the plan initiation process, including preparing for traffic impact assessment review.

Seocho-gu intended to request a decision from Seoul City once the traffic impact assessment review was completed. However, Seoul City unilaterally issued a public notice for partial urban management plan changes only for large-scale sites such as distribution business facilities without prior consultation and before the traffic impact assessment was finalized.

This act nullifies the plan initiation authority granted to the local government head, ignores all ongoing plan initiation procedures in Seocho-gu without canceling or suspending the delegated plan initiation tasks entrusted to the Seocho District Mayor, and constitutes an excessive discretionary power abuse by Seoul City attempting to impose its unilateral opinions in the district unit plan (draft).

Reorganization After 2016, But Yangjae 2-dong Excluded

The Yangjae Residential District Unit Plan area established by Seocho-gu covers over 3 million㎡, a mini new town-scale district unit plan. Through reorganization of the plan, it aims to create a high-tech industrial complex self-sufficient city where economic activities, residence, and cultural enjoyment can be experienced simultaneously within the area.

To this end, resolving severe traffic congestion around Yangjae IC is essential. Since 2017, Seocho-gu and Seoul City have been working on broad traffic improvement measures to alleviate chronic traffic jams in this area.

Despite in-depth discussions between Seocho-gu and relevant Seoul City departments on traffic problem solutions, Seoul City's recent public notice (draft) was issued without any traffic improvement measures for distribution business facilities and large-scale development sites, which account for 90% of the total traffic volume in the district unit plan area, and without completing the traffic impact assessment review. This raises concerns about the establishment of a poorly constructed district unit plan.

Furthermore, although it is necessary to establish specialized spatial plans that leverage regional strengths and foster cooperative areas with enhanced internal connectivity, Seoul City’s plan to establish only about 400,000㎡ of large-scale development sites such as distribution business facilities within the entire 3 million㎡ district unit plan area will inevitably result in an ineffective district unit plan.

In particular, the Maehun Station area, designated as a regional specialized innovation zone (residential area), requires the creation of a residential area for realizing proximity between residence and workplace and the sustainable ecosystem of small and medium R&D companies. Seocho-gu originally planned to allow upzoning to quasi-residential through autonomous joint development (500~800㎡) near Maehun Station.

However, this area was thoroughly excluded from Seoul City's recent public notice (draft), which is seen as an autocratic administration ignoring the opinions of residents who have waited for the district unit plan reorganization for 12 years since 2004.

Plan Contradicting National Plans and Mayor’s Policy

The Korea Freight Terminal site was selected as a pilot site for the urban high-tech logistics complex in 2016, reflected in the national plan, the 2nd Comprehensive Logistics Facility Development Plan, included in private investment activation plans such as the Korean New Deal project, and designated by former Seoul Mayor Park Won-soon in June last year to be developed as an urban high-tech logistics complex. The process is underway according to related laws such as the Act on the Development and Operation of Logistics Facilities (the floor area ratio for the Harim site is to be decided by the Logistics Complex Planning Review Committee considering traffic impact, with a maximum possible floor area ratio of 800%, but it remains undecided).

However, Seoul City's recent public notice (draft) designated the Korea Freight Terminal site as a special planning zone with an allowable floor area ratio capped at 400%. It also established a development direction to maintain consistency with the special planning zone management direction even if promoted as an urban high-tech logistics complex. This shows Seoul City's inconsistent administration, which ignored national and higher-level plans and overturned the previously established city policy direction within just six months.

◇Seocho-gu’s Position

An official from the district stated, “It is very regrettable that Seoul City unilaterally issued a public notice focusing on regulatory plans for large-scale sites excluding plans for residents without consulting Seocho-gu, the plan initiator, regarding the Yangjae Residential District Unit Plan (draft) developed over several years with Seoul City and residents.”

They added, “While pushing forward the controversial Gwanghwamun Plaza construction under the pretext of continuing the previous mayor’s policies, it is hard to understand why the plan to develop the urban high-tech logistics complex, also decided by the same former mayor, is being nullified. The plans prepared to prepare for the 4th Industrial Revolution era, including AI in Yangjae-dong, must be corrected to avoid becoming ineffective half-measures. We have conveyed to Seoul City our request to immediately stop the unilateral plan initiation procedures and allow the district unit plan (draft) developed through years of consultation with Seocho-gu to proceed according to procedures.”

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◇Seoul City’s Position

1) Regarding Seocho-gu’s claim that Seoul City’s unilateral partial amendment decision procedure during Seocho-gu’s ongoing ‘Yangjae Residential District Unit Plan’ amendment process is an excessive discretionary power abuse that nullifies the plan initiation authority granted to the local government head:

The Seoul Mayor is the plan initiator for district unit plans under Article 24 of the National Land Planning and Utilization Act. While the mayor delegates plan initiation authority, including resident opinion collection, to district heads through urban planning ordinances for local knowledge, the mayor can directly initiate and decide plans necessary for city-level policy implementation.

Accordingly, this plan initiation was pursued within the authority allowed by relevant laws to smoothly promote the city policy direction of establishing the Yangjae R&D Innovation District. Therefore, Seocho-gu’s claim of discretionary power abuse is unfounded.

2) Regarding the claim that establishing plans only for about 400,000㎡ of large-scale development sites within the over 3 million㎡ ‘Yangjae Residential District Unit Plan area’ will result in an ineffective district unit plan:

Large-scale sites such as LG/KT research facilities and the Korea Freight Terminal within the ‘Yangjae Residential District Unit Plan area’ are core spaces for realizing the R&D innovation district policy. Proactively responding to individual development demands for these recent large-scale sites is necessary to present management directions and increase predictability for private projects.

Considering these conditions, Seoul City urged Seocho-gu to promptly proceed with the Yangjae Residential District Unit Plan reorganization (initiation) process, which Seocho-gu has delayed for over two years by making unreasonable demands such as relaxing floor area ratios for residential areas in Yangjae 2-dong, akin to special cases for the Yangjae R&CD special zone designation that was effectively canceled in 2017.

Due to this delay, management directions for urgent large-scale sites have not been established, prompting Seoul City to prioritize establishing management plans for large-scale sites through this public notice.

Seocho-gu’s delay in plan initiation is an abuse of the delegated plan initiation authority under Seoul City ordinances and may hinder regional revitalization through planned development of large-scale sites, ultimately harming local residents’ benefits.

3) Regarding the claim that Seoul City ignored the national plan by limiting the allowable floor area ratio to 400% for the Korea Freight Terminal site, which was selected as a pilot urban high-tech logistics complex (with an 800% floor area ratio) and whose procedures were to be promoted under the former mayor’s policy:

The Korea Freight Terminal site and other large-scale sites around Yangjae IC are located within the ‘Yangjae Residential District Unit Plan area’ established in 2004. According to this district unit plan, these sites have been consistently managed with an allowable floor area ratio of 400% or less for over 15 years.

This reflects Seoul City’s urban management direction to consider the traffic conditions of the severely congested Yangjae IC area and prevent excessive development, and this policy direction will continue.

Meanwhile, promoting the site as an urban high-tech logistics complex is possible even if designated as a special planning zone as per Seoul City’s public notice (draft).

However, Seoul City presented management directions to maintain consistency in use and density with other large-scale sites when promoting the site as an urban high-tech logistics complex, considering city policy directions and local conditions such as traffic.

Furthermore, when the Ministry of Land, Infrastructure and Transport incorporated the pilot site selection into the 2nd Comprehensive Logistics Facility Development Plan (July 2016), it specified that ‘the designated authority decides on individual project implementation considering changes in local conditions,’ so Seocho-gu’s claim that Seoul City ignored the national plan distorts the facts.

The designation of the Korea Freight Terminal site and other large-scale sites as general commercial areas was made alongside the 1982 decision on distribution business facilities. At that time, related regulations prohibited distribution business facilities in natural green or residential areas, so the areas were changed to commercial zones, not to allow an 800% floor area ratio.

※ For example, LG Electronics R&D Campus was downgraded from general commercial to 3rd general residential zone when distribution business facilities were deregulated in 2005.

Nevertheless, if a maximum scale development plan (floor area ratio 800%) is established for the site, it is obvious that traffic congestion and other negative impacts will worsen in this chronically congested area. Given that other large-scale sites under similar conditions are planned with floor area ratios of 400% or less, claiming preferential high-density development for a specific site should be reconsidered from the perspective of fairness and equity for local residents.

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◇Harim’s Statement

“The Urban High-Tech Logistics Complex Must Be Established Quickly”... The Essential Infrastructure for Urban Logistics Prepared by the National Assembly and Government Since 2015

The urban high-tech logistics complex is urgently needed infrastructure for logistics and distribution in the contactless economy era that arrived sooner than expected. It is essential public infrastructure to enhance Seoul’s urban competitiveness and improve citizens’ convenience and quality of life.

It also addresses traffic and environmental issues caused by increased freight transport and contributes to ‘carbon neutrality’ by drastically reducing freight vehicle transport distances and times.

Since the COVID-19 pandemic, urban logistics such as parcel delivery has surged, leading to social issues like delivery workers’ deaths from overwork and severe labor disputes over parcel sorting. The urban high-tech logistics complex is recognized as the optimal solution to prevent or mitigate these problems.

Since 2015, the National Assembly and government anticipated increased demand for urban logistics and the need for convergence among distribution, logistics, and ICT industries based on logistics services. They introduced the urban high-tech logistics complex system and proactively amended the Act on the Development and Operation of Logistics Facilities (Logistics Facilities Act).

Harim Industrial Co., Ltd. has been promoting the urban high-tech logistics complex project on a 94,949.1㎡ site at 225 Yangjae-dong, Seocho-gu, Seoul (hereinafter ‘Yangjae site’) since May 2016, aligning with this forward-looking national policy.

The Yangjae site was selected as a pilot urban high-tech logistics complex by the Ministry of Land, Infrastructure and Transport in June 2016 upon application by the Seoul Mayor (Taxi Logistics Division, Urban Transportation Office), and was reflected in the national 2nd Comprehensive Logistics Facility Development Plan amendment in July of the same year.

Submission of Letter of Intent Following Mayor’s Policy... Permit Procedures Halted

Harim Industrial first submitted a letter of intent to Seoul City in January 2018 to develop the urban high-tech logistics complex on the Yangjae site, following relevant laws including the Logistics Facilities Act, its enforcement decree, the Special Act on Simplification of Industrial Complex Permit Procedures, and the Ministry of Land, Infrastructure and Transport’s logistics complex development guidelines (Notice No. 2017-116).

After the ‘Yangjae Urban High-Tech Logistics Complex Complex Development Plan’ was finalized as a mayoral policy in June 2020, Harim resubmitted the letter of intent in August 2020 reflecting Seoul City’s requests.

However, the permit procedures for the urban high-tech logistics complex project, which should proceed according to relevant laws, national plans, government guidelines, the Seoul Mayor’s internal policies, and Seoul City ordinances (Seoul City Ordinance on Logistics Complex Development and Activation Support), have been effectively halted.

The reason the project, promoted since May 2016, remains stalled is that Seoul City’s Urban Planning Bureau, which lacks authority under relevant laws, has continuously opposed the project citing incomprehensible reasons that it does not conform to urban planning standards and principles.

Incomprehensible Involvement and Opposition by Seoul City Urban Planning Bureau

Since May 2016, when the Seoul Mayor’s Taxi Logistics Division submitted the application to the Ministry of Land, Infrastructure and Transport, Seoul City Urban Planning Bureau (Facility Planning Division) has pressured Harim Industrial to withdraw the application and has persistently demanded the project be developed as an R&D complex contrary to the national plan, even after the site was selected as a pilot and reflected in the national plan.

In particular, in November 2017, the Urban Planning Bureau created and publicly disclosed on the Seoul City Communication Plaza the ‘Management Plan for Large-Scale Urban Planning Facility Sites Including Korea Freight Terminal,’ a deputy mayor’s policy explicitly stating that the Korea Freight Terminal site (Harim Yangjae site) would not be subject to the urban high-tech logistics complex law.

This deputy mayor’s policy explicitly excludes the application of relevant laws, ignoring all related laws, national plans, and government guidelines.

Deputy Mayor’s Policy to ‘Not Apply Relevant Laws’ and Departmental Changes

Based on this deputy mayor’s policy, in July 2018, the responsible department was changed from the Taxi Logistics Division to the Urban Planning Bureau’s Facility Planning Division without prior consultation or approval from the Ministry of Land, Infrastructure and Transport, which handles the national plan, and despite the refusal of the original department.

As conflicts arose within the government and Seoul City over these administrative actions, in June 2020, Seoul City formed a task force (TF) including relevant departments and the private business to discuss handling measures.

The TF’s proposals were confirmed at the joint meeting of the first and second deputy mayors, and the ‘Yangjae Urban High-Tech Logistics Complex Complex Development Plan’ was established as a mayoral policy at the end of June 2020.

Accordingly, the responsible department was restored from the Facility Planning Division back to the Taxi Logistics Division, and it was reaffirmed that permit procedures would proceed under the Logistics Facilities Act and the Special Act on Simplification of Industrial Complex Permit Procedures.

Despite expected business deterioration, Harim Industrial submitted a second letter of intent reflecting 40% R&D space as requested by Seoul City Urban Planning Bureau to the Taxi Logistics Division at the end of August 2020.

Deputy Mayor’s Policy Revived Under Acting Mayor, ‘Opposition Again’

However, on November 10, 2020, the Urban Planning Bureau (Facility Planning Division) responded with a ‘disapproval’ letter stating that the development plan conflicts with urban planning and refused to agree to the business plan. The full text was also publicly disclosed on the Seoul City Communication Plaza.

The opposition is interpreted as rejecting the mayoral policy and based on the November 2017 deputy mayor’s policy to not apply urban high-tech logistics complex laws to the Yangjae site.

Moreover, although the Information Disclosure Act requires non-disclosure of private business plans or matters that could influence decision-making on complaints, the full text was disclosed. Such disclosure of ongoing interdepartmental communications is unprecedented.

Unilateral Public Notice of District Unit Plan Causing Controversy Over Autonomy Violation

The Urban Planning Bureau also unilaterally issued a public notice on January 28, 2021, for the Yangjae Residential District Unit Plan amendment, including the Yangjae site, and is proceeding with review by the Urban Architecture Joint Committee.

Although the Yangjae Residential District Unit Plan amendment is legally initiated by Seocho-gu under the National Land Planning and Utilization Act and Seoul City urban planning ordinances, with legal procedures such as traffic impact assessment review and designation of specific development promotion zones, the Urban Planning Bureau’s unilateral handling despite protests of violation of local autonomy and the Local Autonomy Act is difficult to interpret other than as an attempt to influence the urban high-tech logistics complex project on the Yangjae site.

Seoul City Urban Planning Bureau’s disregard for the urban high-tech logistics complex system and laws introduced after careful consideration by the National Assembly and government, national plans by central ministries, government-wide economic policies, mayoral policies, and city ordinances, as well as its forced unilateral handling of delegated tasks from the district, invites criticism and is difficult to understand.

Framing Legally Prescribed Incentives as ‘Special Privileges’

The Yangjae urban high-tech logistics complex project is not a traditional urban development project accepted under existing urban management plans.

As a new concept logistics infrastructure difficult to accommodate within existing urban management plans, new systems and laws were created to introduce advanced logistics facilities into the city, making this a completely new type of project.

In traditional cities like Seoul, strict urban planning regulations and high land prices deter companies from investing in logistics facilities.

Therefore, the permit procedures are simplified under the Logistics Facilities Act and the Special Act on Simplification of Industrial Complex Permit Procedures, and incentives such as development density (floor area ratio) and public contributions are legally defined and granted.

Seoul City Urban Planning Bureau claims that Harim Industrial’s insistence on an 800% floor area ratio risks repeating controversies over special privileges. However, this unfairly frames legally prescribed incentives (investment encouragement) as ‘special privileges.’

Harim Industrial merely submitted a letter of intent applying the maximum allowable floor area ratio according to the Ministry of Land, Infrastructure and Transport’s logistics complex development guidelines. The floor area ratio will be reviewed and finalized by the Logistics Complex Planning Review Committee (chaired by the Seoul Mayor), composed of experts in urban planning, logistics location, architecture, traffic, and environment, considering traffic and environmental impact assessments.

We will do our best for logistics innovation and economic recovery.

Harim Industrial has already incurred about 150 billion KRW in losses over the past four years due to financial costs, taxes, and development consulting fees during the urban high-tech logistics complex project promotion.

Reflecting the 40% R&D space requested by Seoul City Urban Planning Bureau has effectively nullified the legally provided incentive effects (according to simulations by a professional accounting firm). Additional overlapping regulations from the district unit plan amendment will make the project practically impossible.

However, the urban high-tech logistics complex is essential public infrastructure that Seoul City must establish for future generations living in the 4th Industrial Revolution era, and a social responsibility that private companies must fulfill for community development. We will do our best to promote it.

Harim Industrial plans to introduce innovative facilities and operation systems realizing packaging-free, waste-free, and inventory-free eco-friendly urban logistics in the Yangjae urban high-tech logistics complex.

We will create a green & smart logistics complex integrating cutting-edge technologies such as AI to properly realize the purpose of introducing the urban high-tech logistics complex.

The Yangjae urban high-tech logistics complex project is also included in national policies such as the ‘Korean New Deal project and private investment activation plans (July 2020)’ promoted by the government for post-COVID-19 economic recovery.

We request much interest and support so that the urban high-tech logistics complex project on the Yangjae site proceeds legally, rationally, and swiftly under the Logistics Facilities Act, the Special Act on Simplification of Industrial Complex Permit Procedures, and Seoul City ordinances on logistics complex activation support, contributing to national economic recovery efforts and enhancing Seoul’s urban competitiveness.

? May 2016: Harim submitted application for pilot urban high-tech logistics complex designation for Yangjae site (Seoul City → Ministry of Land, Infrastructure and Transport)

? June 2016: Ministry of Land, Infrastructure and Transport selected pilot urban high-tech logistics complexes (6 sites including Yangjae Harim site)

? July 2016: Announcement of amendment to 2nd Comprehensive Logistics Facility Development Plan (2013~2017) introducing urban high-tech logistics complex system and key policy tasks

? November 2017: Seoul City decided ‘Yangjae Tech+City Plan’ and guidelines for distribution business facilities development, and management plan for large-scale urban planning facility sites (Deputy Mayor’s Policy No. 272), explicitly stating ‘urban high-tech logistics complex not applied’ to Korea Freight Terminal site (Harim Yangjae site)

? January 2018: Submission of letter of intent for urban high-tech logistics complex (Yangjae site) (Harim Industrial → Seoul City Taxi Logistics Division)

? March 2018: Announcement of 3rd Comprehensive Logistics Facility Development Plan (2018~2022), emphasizing timely promotion of pilot urban high-tech logistics complex projects

? July 2018: Seoul City changed responsible department for urban high-tech logistics complex promotion (Taxi Logistics Division → Facility Planning Division)

? September 2018: Announcement of Seoul City Logistics Basic Plan (2018~2027) (Yangjae Harim site / former Korea Freight Terminal), transforming into landmark logistics facility representing Seoul and nationwide, performing logistics functions for the southern Seoul and nationwide along the Gyeongbu axis

? September 2019: Request for return of ‘pre-consultation document’ submitted to Facility Planning Division (Harim Industrial → Seoul City Facility Planning Division): According to relevant laws, the responsible department is Taxi Logistics Division

? June 2020: Joint 6th Emergency Economic Meeting of Economic Ministries announced active promotion of Yangjae urban high-tech logistics complex project with 5.7 trillion KRW investment in the second half of 2020 economic policy direction

? July 2020: ‘Korean New Deal project and private investment activation plans’ (Joint Emergency Economic Central Countermeasure Headquarters of Economic Ministries): Support for logistics complex development review and construction start in 2021 for Yangjae urban high-tech logistics complex project

? June 2020: ‘Yangjae Urban High-Tech Logistics Complex Complex Development Plan’ finalized as mayoral policy

? July 2020: Announcement of Seoul City Ordinance on Logistics Complex Development and Activation Support

? August 2020: Submission of letter of intent for urban high-tech logistics complex (Harim Industrial → Seoul City Taxi Logistics Division)

? November 2020: Seoul City Urban Planning Bureau responded with ‘disapproval’ to letter of intent business plan (Taxi Logistics Division) and publicly disclosed full text on Seoul City Communication Plaza

? January 2021: Seoul City Urban Planning Bureau unilaterally issued public notice for Yangjae Residential District Unit Plan amendment

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