Will Yangjae Urban High-Tech Logistics Complex Gain Momentum?... Board of Audit Issues 'Yellow Card' to Seoul City for Permit Delays

Board of Audit and Inspection: "Seoul City Improperly Promoted Yangjae Urban High-Tech Logistics Complex"... Issued 'Caution'... Urban Planning Bureau Criticized for 'Excluding Logistics Facility Act, Demanding R&D Facilities, Favoritism Frame'... Harim: "Urban High-Tech Logistics Complex Essential Infrastructure for Digital Economy... Realizing Cutting-Edge Smart & Green Logistics"

[Asia Economy Reporter Park Jong-il] The Board of Audit and Inspection pointed out that Seoul City caused delays in project permits due to administrative actions beyond its legal authority in the Yangjae Urban High-Tech Logistics Complex development project, and issued a 'caution to the institution' to Seoul City.

As a result, Harim Industry, which had been promoting the Yangjae Urban High-Tech Logistics Complex development project, has gained momentum in advancing the project by overcoming internal policy confusion within Seoul City and disputes over preferential treatment demands raised by the Urban Planning Bureau.

◇ Board of Audit and Inspection issues 'caution' to Seoul City over permit delays... preferential treatment disputes over development procedures and floor area ratio settled

On the 18th, the Board of Audit and Inspection stated, "Seoul City delayed permits by demanding non-binding internal policies from companies or changing policy directions without reasonable grounds while promoting the Yangjae-dong Urban High-Tech Logistics Complex project," and issued a 'caution to the institution.'

This disposition by the Board of Audit and Inspection followed a public interest audit request filed in January by 300 stakeholders related to the Yangjae Urban High-Tech Logistics Complex, claiming significant damages due to Seoul City's permit delays.

Although the Seoul City Urban Planning Bureau is not the main department responsible for the Urban High-Tech Logistics Complex project, it argued without basis that the incentives legally granted to allow underground logistics centers and complex development of the above-ground area?due to high land prices and various regulations hindering development?such as permit procedures, floor area ratio, and public contributions, were preferential treatment allowing excessive development, thereby delaying permits. This was revealed by the Board of Audit and Inspection's audit results.

According to the Board of Audit and Inspection, after the Harim site in Yangjae-dong, Seocho-gu, Seoul was selected as a pilot site for the Urban High-Tech Logistics Complex in October 2016, the Urban Planning Bureau unilaterally established the 'Yangjae Distribution Business Facility Development Guidelines' (hereinafter Yangjae Plan), which included a mandatory R&D facility ratio of over 50% of the building, without coordinating with the responsible department, the Urban Transportation Office.

The Yangjae Plan contains regulatory content directly affecting the property rights of landowners and was not reflected in district unit plans, thus lacking external binding force. Nevertheless, the Urban Planning Bureau demanded compliance with the Yangjae Plan and exclusion from the Logistics Facility Act three times through documents, the Board of Audit and Inspection pointed out.

Subsequently, Seoul City decided to adopt a flexible stance on promoting the Urban High-Tech Logistics Complex to revitalize investment, and in June 2020, finalized the 'Yangjae Urban High-Tech Logistics Complex Complex Development Plan' as a mayoral policy, including the company's proposed 40% R&D ratio and promotion methods and procedures under the Logistics Facility Act (applying the Industrial Complex Simplification Procedures Act).

However, the Urban Planning Bureau continued confusion by publicly claiming in November 2020 that 'district unit plan agenda processing is preferential treatment,' insisting on compliance with the district unit plan (floor area ratio below 400%) for the Yangjae residential site, and in January 2021, conducted a public inspection announcement without meeting the legal requirements (Article 70 of the Local Autonomy Act) to directly draft the district unit plan, the Board of Audit and Inspection pointed out.

Accordingly, the Board of Audit and Inspection notified Seoul City, "The mayor should ensure that there is no omission of prior coordination among departments when handling permits for the Urban High-Tech Logistics Complex development, and that legal grounds are secured when necessary to process the work."

It also issued a 'caution' to Seoul City, stating, "When setting policy directions, ensure that there is no reversal without reasonable grounds causing confusion in policy promotion, and thoroughly manage related tasks."

In response, Harim Industry stated, "If 30% logistics facilities and 40% R&D facilities are reflected, even applying the maximum floor area ratio (800%), the project cannot expect development profits," and added, "Nevertheless, the Board of Audit and Inspection clarified the truth regarding the Seoul City Urban Planning Bureau's claims that 'insisting only on a floor area ratio of 800% raises concerns of preferential treatment' and 'district unit plan agenda processing is preferential treatment,' which unfairly framed the incentives stipulated by law."

Meanwhile, Harim Industry has previously stated that delays in the project have caused losses exceeding 150 billion KRW in financial costs.

◇ Harim Industry to actively pursue six major vision plans for realizing cutting-edge smart & green logistics

With disputes over legal applications and permit procedures settled, Harim Industry plans to actively promote the Urban High-Tech Logistics Complex development project, a public infrastructure urgently needed to resolve various problems caused by the surge in urban logistics and to enhance Seoul City's urban competitiveness in the digital economy era, in accordance with relevant laws and procedures.

Harim Industry envisions transforming the logistics distribution paradigm through the creation of the Urban High-Tech Logistics Complex, an essential urban infrastructure in the digital economy era, providing momentum for fostering new industries integrating distribution and logistics, thereby contributing to elevating Seoul City's urban competitiveness to the next level.

To this end, Harim Industry will actively pursue six major vision plans for the Yangjae Urban High-Tech Logistics Complex development project: ▲ realizing logistics without delivery packaging waste ▲ 100% recycling of food waste within the complex ▲ clean energy transportation with zero carbon emissions ▲ creating safe workplaces and quality jobs ▲ operating smart logistics centers equipped with cutting-edge ICT ▲ serving as a bridge for win-win development between urban and rural areas and small and medium enterprises.

Harim Industry plans to establish the world's first new-concept logistics distribution infrastructure that simplifies complex logistics systems such as long-distance transportation and multi-packaging in the Yangjae Urban High-Tech Logistics Complex, eliminates consumer costs, fundamentally blocks delivery packaging waste, and drastically reduces public environmental costs caused by increased waste and air pollution.

Additionally, waste generated within the Yangjae Urban High-Tech Logistics Complex will be included in the logistics domain and transported to a resource recycling center installed underground for resource recovery, presenting a new model for urban waste management. In particular, food waste will be collected immediately in a fresh state, dried, and ground to be 100% recycled as feed raw materials.

Logistics arriving at the Urban High-Tech Logistics Complex from farms and factories will be handled by large hydrogen trucks, while 'Last Mile Delivery' to customers from the complex will be conducted using small electric vehicles, implementing a clean energy transportation system.

Furthermore, through comfortable rest areas, safety automation facilities replacing high-intensity labor, and optimization of delivery areas and routes, Harim Industry plans to transform courier jobs, often perceived as 'tough jobs,' into 'safe and quality jobs.'

The logistics center, a core facility of the Urban High-Tech Logistics Complex, will apply cutting-edge ICT such as IoT, big data, AI, robotics, and autonomous driving to functionally connect advanced logistics facilities, R&D spaces, office facilities, upstream facilities, and support facilities, establishing a test bed for related new industries and an incubator for youth startups.

In particular, Harim Industry stated it will realize urban-rural win-win logistics that reduces unnecessary intermediate distribution, enhances economic benefits for urban consumers, and contributes to the development of local SMEs and agricultural industries through stable linkage and market expansion, thus serving as a bridge for mutual development among rural areas, cities, and SMEs.

Meanwhile, recognizing the importance of urban logistics, Seoul City has recently established a Logistics Policy Division through organizational restructuring and deployed dedicated personnel and support organizations for Urban High-Tech Logistics Complex development, moving swiftly, so the permit procedures for the Yangjae Urban High-Tech Logistics Complex are expected to proceed rapidly.

◆ Harim Industry's position on the Board of Audit and Inspection's public interest audit results

The Board of Audit and Inspection's issuance of a 'caution to the institution' to Seoul City regarding delays in permits for the Yangjae Urban High-Tech Logistics Complex clarifies the truth about the Seoul City Urban Planning Bureau's disregard for the purpose and necessity of the Urban High-Tech Logistics Complex system introduction, related legal permit procedures, and its implementation of non-binding internal guidelines, unfairly framing legally stipulated incentives (permit procedures, floor area ratio, public contributions) as 'preferential treatment' by insisting on only an 800% floor area ratio and claiming that 'district unit plan agenda processing is preferential treatment.'

The Yangjae Urban High-Tech Logistics Complex development project, which cannot expect development profits even applying the maximum floor area ratio (800%) with 30% logistics facilities and 40% R&D facilities, is an essential urban infrastructure urgently needed to resolve various urban problems caused by the surge in urban logistics and to enhance Seoul City's urban competitiveness in the digital economy era. Based on the six major basic plans previously announced, Harim Industry will actively promote the project in accordance with relevant laws and procedures.

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