Seongnam City Vows to Correct Taxpayer Waste... Lawsuit Filed Over Unfair Daewang Reservoir Appraisal

Seongnam City Files Lawsuit for Return of Unjust Enrichment Over Daewang Reservoir Land Compensation
City Investigation Reveals Suspected Excess Expenditure of 33 to 75.6 Billion Won
Legal Action Taken Against Korea Rural Community Corporation and Appraisal Firms; Complaint Filed with Seoul Central District Court
Mayor Shin Sangjin: "We Will Hold All Parties Legally Accountable to Protect City Finances"

Seongnam City in Gyeonggi Province (Mayor: Shin Sangjin) announced on October 1 that it has confirmed the appraisal for compensation of land purchases conducted in March 2021 for the Daewang Reservoir Waterfront Park development project was excessively calculated. The city filed a lawsuit for the return of unjust enrichment with the Seoul Central District Court on September 26, initiating legal proceedings against Korea Rural Community Corporation and several appraisal firms.

Daewang Reservoir Waterfront Park. Provided by Seongnam City

The Daewang Reservoir Waterfront Park development project began in earnest as a key pledge of the 7th popularly elected administration in 2018, after the area around Daewang Reservoir was designated as a city management plan (park) in 2009.

Based on the appraisal results from three firms designated respectively by Korea Rural Community Corporation, Gyeonggi Province, and Seongnam City in 2021, Seongnam City signed a land purchase contract in 2022 with Korea Rural Community Corporation for a total of 118.3 billion won. This contract covered 154,586 square meters of land out of the total 224,258 square meters of the Daewang Reservoir Waterfront Park.

According to Seongnam City’s investigation, the 'Appraisal Practice Standards' (as announced by the Ministry of Land, Infrastructure and Transport) require the use of 'comparable cases with similar surrounding environments and geographical proximity.' However, the appraisal applied a case from land near the Geumto-dong public housing district, which is about 1.7 kilometers away, rather than a more objective and appropriate comparison. As a result, the appraisal lacked objectivity and validity. The city determined that this led to an excessive expenditure of approximately 33 billion won of taxpayer money.

If the appraisal had used a transaction case from Sangjeok-dong, which is about 270 meters away and has a similar environment to the actual site, the price would have been calculated at around 552,000 won per square meter. However, by applying the Geumto-dong land as the comparison, the average was set at 942,000 won per square meter, resulting in a significant discrepancy.

Additionally, in this appraisal, the price of 'reservoir land' was assessed using the price of farmland as the base price. However, if the price ratio of reservoir land to farmland, set at 0.5 in other local government cases (as decided by the Anti-Corruption and Civil Rights Commission), had been applied, the overvaluation could have reached up to 75.6 billion won.

Shin Sangjin, Mayor of Seongnam City, stated, "The Daewang Reservoir Waterfront Park development project will proceed as planned for the convenience of residents, but we will correct any waste of taxpayers' money caused by the flawed appraisal. We will hold those who gained unjust profits fully accountable through legal means to protect the city's finances."

Through this lawsuit, Seongnam City will seek damages and the return of unjust enrichment, and will clarify responsibility based on facts revealed during the trial. The city also plans to pursue both financial recovery and institutional reform in parallel.

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