Gwangju Jungang Park Private Project Operator "Unjustified Criticism Must Stop"

Press Statement on Issues Raised by Civic Groups

[Asia Economy Honam Reporting Headquarters, Reporter Yoon Jamin] Bitgoeul Jungang Park Development, the private project operator of Gwangju Metropolitan City's Jungang Park (Zone 1), recently issued a statement regarding issues raised by civic groups.

On the 22nd, Bitgoeul Jungang Park Development stated in a press release, "We hope that unjustified criticism will cease."

First, in response to claims that the post-sale system is a trick to evade high-priced housing management areas, they said, "The apartment housing plan is a profit-making part of the park project plan."

The apartment housing in the private park special project is considered a 'profit-making business' necessary to donate park land and park facilities.

They explained that the 'profit-making business' must be appropriately planned to cover 'total costs' and 'private sector profits,' and the 'Park and Green Space Act' requires the Urban Planning Committee to review whether the scale of the 'profit-making business' is insufficient or excessive.

They stated, "To cover the 'total costs,' an appropriate scale is determined somewhere between 'low sale price × large area' and 'high sale price × small area,' and if the 'total costs' cannot be met with 'low sale price × small area,' it cannot be an appropriate business plan."

Ultimately, the issue is whether the 'total costs' are properly calculated, and the recent Urban Planning Committee review decision requests the basis for this calculation, not a criticism to stop post-sale.

They also said it is inappropriate to plan the project by lowering the sale price to the level of the high-priced housing review standard.

They explained that at the start of this project, there is objective evidence that the sale price that can be approved under the current high-priced housing review standard is unlikely to exceed '15 million KRW per 3.3㎡.'

They claimed, "If the difference of about 4 million KRW per 3.3㎡ is applied to the current sale area of 126,600 (3.3㎡), apartment housing revenue decreases by more than 500 billion KRW," and "According to civic groups' claims, to plan this project at a sale price approved under the high-priced housing review standard, the sale area would need to increase by about 25%."

They further demanded, "For the criticism that post-sale is a trick to be a valid criticism, please at least present the outline of how to lower the sale price below the HUG review standard while conducting the project with the non-park area at the time of the implementation plan approval."

They explained, "If the sale price is lowered, buyers who purchase at prices below market value can enjoy a premium, and the construction company bearing the sale risk can reduce its burden. However, if the sale price is lowered indiscriminately, the amount of donated park facilities will decrease, ultimately harming all citizens."

They also addressed the criticism that Gwangju Metropolitan City guarantees preferential profits.

They said, "Currently, the pre-tax profit of about 136 billion KRW (estimated post-tax about 104 billion KRW) may seem large in absolute terms, but considering that this project involves private investment of 2.1 trillion KRW, it is not a high figure," and "If the investment return rate decreases further, project financing becomes difficult. The 6.01% profit rate is not guaranteed, and it is difficult to secure project funds at a lower return rate in the financial market."

Regarding the criticism that Gwangju City is being led around by the SPC, they said, "Please understand that the private project operator is facing internal and financial market criticism that it is being unilaterally led by Gwangju City in many ways."

Bitgoeul Jungang Park Development stated that intentional acts to influence the Urban Planning Committee's review should be restrained and that the private project operator did not fully accept the recommendations of the project coordination council with Gwangju City.

They said, "The only profit dispute currently occurring within the company is the 'construction rights,'" and "There is a shareholder engaged in housing construction within the company, and that shareholder does not want a post-sale project and has filed a lawsuit claiming that the construction rights originally belonged 100% to them, regardless of other shareholders' opinions. Apart from this, there is no other dispute within the company. Please do not mislead by suggesting that various interest disputes are ongoing within the company."

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