[Exclusive] Yoo Dong-gyu's 'Daejang-dong Team' Also Touched Special Project 'Nakseong Park'

Jeong Min-yong Involved in Public Park Development Private Contractor Recruitment... Speed Race Led by PFV Excluding Construction Companies 'Daejang-dong Replica'

[Asia Economy Reporter Baek Kyunghwan] It has been confirmed that the so-called 'Daejang-dong team,' including former Seongnam Urban Development Corporation Planning Director Yoo Dong-gyu, who is at the center of the Daejang-dong development preferential treatment allegations, was also involved in the private park development special project. This project involves supplying housing by utilizing park land that had been left unused for over 20 years in Nakseong Park, which is included in the current Nakseong District. Lawyer Jung Min-yong, a junior alumnus of lawyer Nam Wook, participated in creating the private business operator recruitment guidelines for the Nakseong Park development following Daejang-dong as the head of the Strategic Business Office's Investment Business Team.

According to Asia Economy's investigation on the 12th, former Director Yoo and Lawyer Jung pushed for the recruitment of private business operators in October 2017 to develop Nakseong Park, a long-term unexecuted facility in Seongnam City. Their names appeared in official documents containing the recruitment plans, which had a revenue structure similar to that applied in the development of Wirye New Town and Daejang District.

◆ Private Park Special Project Recruitment Guidelines Mirror Daejang-dong Recruitment = Initially, Nakseong Park's development began by applying the private park development special project, supplying both park and residential areas. Out of the total area of 344,000㎡, the project secured funds by developing non-park facilities (52,120㎡) excluding park facilities (291,880㎡).

The recruitment of private business operators adopted the same project structure as the Daejang-dong development. The private business operator recruitment guidelines for Nakseong Park, confirmed by our source, appear almost identical to those for Daejang-dong, showing a very similar structure.

Both documents contain the exact phrase: "This project will be promoted through a public-private joint development method by establishing a Special Purpose Company (SPC), and the SPC will take the form of a Project Finance Vehicle (PFV)." They also include details that the corporation is established jointly by the corporation and the preferred negotiation partner using a paper company.

The exclusion of construction companies from the consortium formation requirements is also identical to Daejang-dong. In the Daejang-dong development project, they formed a PFV composed only of financial companies, excluding construction companies. The camp of Gyeonggi Governor Lee Jae-myung stated that excluding construction companies from the consortium was a measure to prevent excessive private profit from the development, but this resulted in Cheonhwa-dongin, who invested through Hwacheon Daeyu, an asset management company (AMC), and a fund management trustee company (FMC), receiving dividends worth billions of won.

The speed at which they proceeded with selecting private business operators was also similar to the Daejang-dong method. The Planning Headquarters of Seongnam Urban Development Corporation and the Strategic Business Office's Investment Business Team issued a "Private Park Development Special Project Private Business Operator Recruitment Announcement" just one day after publicly disclosing the Nakseong Park development. The project briefing session was scheduled only six days later. If the Nakseong Park development had not been changed to be handled by LH (Korea Land and Housing Corporation), a developer familiar with the public-private joint development method like Hwacheon Daeyu and Cheonhwa-dongin would inevitably have secured the development profits.

◆ 'Daejang-dong Team' Confirmed in Various Places = The roles of key figures in the Daejang-dong development have not changed. Lawyer Jung, who managed practical tasks such as feasibility studies, drafting recruitment guidelines, and signing business agreements in the Daejang-dong development, was involved in the recruitment stage and guideline drafting for Nakseong Park development, and former Director Yoo directly received reports from the Investment Business Team to which Lawyer Jung belonged, just as in Daejang-dong.

Traces of Kim Moon-gi, head of Development Division 1 at Seongnam Urban Development Corporation and another key figure in the Daejang-dong development, also remain. Kim personally appeared as the person responsible for Nakseong development during the Seongnam City Council audit and mentioned, "I will make good use of the experience gained in Daejang-dong."

While there is analysis that they inevitably had to be involved in the overall project due to their duties, experts believe that considering they used the same method in Wirye New Town and Daejang-dong, a similar profit distribution structure would have emerged even in the park development.

With additional confirmation of the past activities of the Daejang-dong team, including former Director Yoo, it seems inevitable that the scope of the prosecution's investigation will change. The dedicated investigation team at the Seoul Central District Prosecutors' Office, which is investigating the Daejang-dong development lobbying and preferential treatment allegations, is reviewing the entire process before and after the recruitment of private business operators in Wirye New Town and Daejang-dong. It is highly likely they will verify how long strategic transactions among these parties continued. During the recent holiday period, the investigation team reportedly summoned former Director Yoo and Lawyer Jung consecutively for questioning, focusing on related suspicions.

◆ Private Sector 'Hands' Borrowed for Park Development = At that time, the recruitment of private business operators was canceled two hours before the project briefing session. The cause was reportedly the failure to properly verify the urban basic plan changes and announcement procedures for the land use zone.

However, a Seongnam City Council official who reviewed the recruitment process at the time believes that the Ministry of Land, Infrastructure and Transport's new guideline requiring a separate announcement for third-party proposals after recruiting private business operators was a decisive variable. This method, which involves inviting third parties into the project after receiving private proposals to induce open competition with the initial proposer, likely made private business operators feel burdened in terms of profitability.

As a result, although the Daejang-dong team's design was not applied to the Nakseong Park development, there are criticisms that former Seongnam Mayor Lee Jae-myung bears some responsibility for leaving the project no choice but to rely on private business operators. Since the 2009 Constitutional Court ruling and the anticipated lifting of long-term unexecuted urban parks (park sunset system) in 2020, the mayor should have prepared park creation funds in advance after taking office but neglected to do so, providing a pretext for private business operators to potentially scoop up profits.

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