Jung Mong-kyu, HDC Chairman: "Hwajeong I'Park Will Be Completely Demolished and Rebuilt" (Comprehensive)

"70 Months Expected from Demolition to Completion"
Estimated 370 Billion KRW for Construction and Compensation
"We Will Keep Our Promise Even If There Are Losses"

At a press conference held on the 4th at the HDC Hyundai Development Company Yongsan headquarters in Seoul to announce additional measures related to the Gwangju Hwajeong-dong I-Park accident response, Chairman Chung Mong-gyu and Hyundai Development Company executives are greeting attendees. Photo by Moon Honam munonam@

HDC Hyundai Development Company (HDC Hyunsan) has decided to demolish all eight buildings of the Hwajeong I-Park apartment complex in Seo-gu, Gwangju, where an exterior wall collapse accident occurred last January, and rebuild them.

Jung Mong-gyu, Chairman of HDC, held an emergency press conference at the company’s Yongsan headquarters in Seoul that morning and said, "We will demolish all eight buildings of Hwajeong-dong I-Park as requested by the prospective residents and rebuild the I-Park."

Chairman Jung stated, "Over the past four months, we have been discussing compensation with the prospective residents, but besides Building 201 where the accident occurred, other contract holders also had many safety concerns. We believed the only way to alleviate these concerns was to completely demolish and rebuild."

He added, "Since the agreement with the contract holders could be indefinitely delayed and the company’s uncertainty would increase, we made this difficult decision. We see this as the fastest way to restore our customers’ trust, and that is why we decided accordingly."

With the decision to fully demolish and reconstruct, the move-in schedule for Hwajeong I-Park is expected to be significantly delayed. Hwajeong I-Park is divided into Phase 1 and Phase 2, originally planned to have a total of eight buildings with 847 households (705 apartments and 142 officetels), with move-in scheduled for November 30 of this year.

On the 4th, at a press conference held at the HDC Hyundai Development Company Yongsan headquarters in Seoul to announce additional measures related to the Gwangju Hwajeong-dong I-Park accident response, Chairman Chung Mong-gyu is speaking. / Photo by Moon Ho-nam munonam@

The company expects it will take about 70 months from demolition to completion. Ha Won-ki, CEO of HDC Hyunsan, said, "The demolition method has not been decided yet, and there are no precedents domestically. Considering local complaints and the permit process, we estimate it will take about 70 months for actual demolition and reconstruction."

Additionally, significant losses are anticipated for HDC Hyunsan due to compensation for delayed move-in, demolition, and reconstruction costs. The contract amount for the Hwajeong I-Park complex is 255.7 billion KRW. Considering the construction progress was about 60% just before the collapse, more than 150 billion KRW has already been invested, which will be recorded as a loss if full demolition occurs.

Since the collapse accident was due to the construction company’s negligence, monetary losses of the prospective residents must also be compensated. The additional costs expected to be incurred, including construction costs for demolition and reconstruction and compensation for residents due to delayed move-in, are estimated at around 370 billion KRW. HDC Hyunsan reflected a loss of 170 billion KRW in its accounts last year due to the Gwangju Hwajeong I-Park incident and plans to record an additional 200 billion KRW in expenses this year.

On the 4th, at a press conference held at the HDC Hyundai Development Company Yongsan headquarters in Seoul to announce additional measures related to the Gwangju Hwajeong-dong I-Park accident response, Chairman Chung Mong-gyu is speaking. Photo by Moon Honam munonam@

This decision came about four months after the accident on January 11. At that time, six workers on site died and one was injured.

The Ministry of Land, Infrastructure and Transport’s accident investigation committee concluded that the accident was a man-made disaster caused by comprehensive management failures including construction and supervision. The residents’ representatives at the accident site had been demanding that all buildings be demolished and fully reconstructed.

HDC Hyunsan plans to focus on full demolition, reconstruction, and compensation despite inevitable company losses. Chairman Jung said, "If we cannot gain safety and public trust from our customers, the company’s existence has no meaning. Going forward, if there is even the slightest loss of trust regarding safety, we will keep our promises to customers no matter what losses the company incurs."

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