'Painful Negotiations in Win-Win Agreement' Starfield Suwon, Will It Open Within the Year?

Shinsegae Group’s complex shopping mall, ‘Starfield Suwon,’ is facing opposition from local merchants, making its opening within this year uncertain. Under current laws, a coexistence agreement with local merchants is required to open a large-scale store, and it has been reported on the 2nd that significant difficulties are being experienced during this negotiation process.

An aerial view of Suwon Starfield, covering a total floor area of 331,000㎡, located at 111 Jeongja-dong, Jangan-gu, Suwon. Currently, the construction progress is at 60%, aiming for completion and opening by the end of this year.
[Photo by Shinsegae Property]

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According to a comprehensive report by Asia Economy, Shinsegae Property, which is promoting the opening of Starfield Suwon, has yet to find common ground with the Suwon City Merchants Federation on coexistence measures as of today. Under the current Distribution Industry Development Act, to open a large-scale store like Starfield, a regional cooperation contract based on a coexistence agreement with local merchants must be submitted to the local government. However, the Suwon City Merchants Federation has maintained a stance opposing the opening itself, and it is reported that negotiations have not even begun for over two years.

Previously, Shinsegae Property has been conducting discussions for coexistence agreements with three merchant organizations in the Suwon area, including the Suwon City Merchants Federation, since around February 2021, when construction of Starfield Suwon began. Among them, coexistence agreements were signed with the Gyeonggi Southern Supermarket Cooperative and the Suwon City Small Business Federation by last month, but dialogue with the Suwon City Merchants Federation has yet to open.

The Suwon City Merchants Federation, composed of merchants from 22 traditional markets in the Suwon area, opposes the opening of Starfield citing concerns over infringement on the local commercial district. Unlike department stores or large supermarkets that handle limited products, Starfield has the character of a complex shopping mall, which they believe will deliver a blow threatening the survival of traditional markets.

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If the Suwon City Merchants Federation continues to maintain its current hardline stance, Shinsegae Property’s plan to open within this year will inevitably face setbacks. Starfield Suwon, located at 111 Jeongja-dong, Jangan-gu, Suwon City, with a total floor area of 331,000㎡ (8 basement floors and 8 above-ground floors), is currently 60% complete, aiming for completion and opening by the end of this year.

Before Starfield Suwon, Lotte Mall Suwon, which opened nearby, also faced opposition from the Suwon City Merchants Federation, resulting in its opening being delayed by three months to November 2014. At that time, the Suwon City Merchants Federation demanded 50 billion KRW in compensation for damages citing infringement on the commercial district ahead of Lotte Mall’s opening. Since Lotte did not accept this compensation amount, the two sides remained at an impasse, but the conflict was barely resolved through mediation by Suwon City.

In the case of Starfield Suwon, even if a negotiation table is set, it is expected that a higher compensation amount will be demanded than during the previous Lotte Mall Suwon case. A representative of the Suwon City Merchants Federation said, "We believe Starfield will cause more damage than Lotte Mall." This indicates that reaching an agreement is expected to be difficult. Moreover, Suwon City, which mediated during the Lotte Mall Suwon conflict, currently does not have the authority to intervene directly in the coexistence agreement process.

Shinsegae Property has expressed its intention to actively engage in the coexistence agreement. A Shinsegae Property official said, "We plan to approach the agreement with an open attitude and sincerity for the coexistence of the local economy and residents." The official also emphasized, "Starfield has continuously carried out local coexistence activities after opening in other regions." For example, last year, Starfield Goyang supported the renewal of the nearby Samsong Shopping District.

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