Incheon Urban Corporation Launches Study on Relocation of 3rd Supply Unit and Other Military Bases... Aiming to Improve Project Profitability

Incheon Urban Corporation (iH) announced on November 18 that it has launched a study to develop a business plan for relocating military units, including the 3rd Supply Unit in Sanggok-dong, Bupyeong-gu. The target for completion is August next year.

Through this study, iH plans to review the entire military relocation project, analyze the project implementation structure and risk factors, and seek rational strategies for executing the relocation.

Incheon Urban Corporation building exterior

The 3rd Supply Unit, which is central to the relocation, has been located in the urban area of Sanggok-dong since the early 1970s. It has long been cited as an obstacle to local development and improvement of living conditions. Local residents have continuously proposed ways to utilize the military site to the Ministry of National Defense and Incheon City for decades.

In response, Incheon City and iH decided to consolidate and relocate two military units in Incheon-the 3rd Supply Unit and the 507th Brigade-as well as four reserve force training centers in Juan, Namdong-gu, Bucheon, and Gimpo, to two locations: the 17th Division garrison and the Gyeyang mobilization reserve training center.

In 2019, Incheon City and the Ministry of National Defense signed a "business agreement for revitalizing the old city center in connection with the relocation of military units." In 2020, the Ministry of National Defense notified the start of discussions on relocating military facilities. In April 2023, Incheon City and the Defense Facilities Headquarters signed a memorandum of understanding, and in June of the same year, Incheon City began the process of designating a project operator. However, the relocation project was suspended after the public recruitment of private participants failed in July last year.

Incheon City and iH analyzed the reasons for the failed recruitment as a decline in project profitability due to high interest rates, contraction in the real estate project financing market, and rising construction costs-all stemming from a downturn in the real estate market. Through this study, they plan to comprehensively examine ways to improve project profitability, redesign the project structure, and prepare risk management strategies.

Meanwhile, both organizations believe it is difficult to secure profitability through the "donation for compensation" method, which involves constructing replacement military facilities and receiving the existing site in return for development. They are therefore placing their hopes on institutional reforms currently being promoted by the government and the National Assembly. The "Special Act on Support for the Relocation of Military Bases and Facilities," proposed in the National Assembly last September, aims to ensure fair exchanges by rationally evaluating the value of donated and transferred assets.

An iH official stated, "Through this study on business plans for the military relocation project, we will thoroughly review the feasibility and executability of the project, and do our utmost to ensure that the relocation is pursued in a rational manner using private capital and other means, taking into account the financial conditions of iH and Incheon City."

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