Yeosu-si, Jasan Recreation Area Development Project... No Repurchase of National and Public Land, Only Developer Gains Tens of Billions

[Asia Economy Honam Reporting Headquarters Reporter Lee Hyung-kwon] Criticism has been raised that only the business operator gained significant profit as Yeosu City did not repurchase the national and public land it sold.

Yeosu City issued a restoration order to cancel the Asset Amusement Park development project, and it is pointed out that the city should have repurchased the national and public land sold to the project operator but did not.

There are opinions that if remnants of the amusement park development project remain in areas including asset parks that must be preserved under the urban park sunset clause, it should not be allowed, and that a comprehensive review is necessary.

In February of this year, the site of the Yeosu Asset Amusement Park development project, which had been neglected for 10 years after being promoted to improve the insufficient accommodation facilities ahead of the 2009 Yeosu World Expo, attracted attention when it was auctioned by the Suncheon Court at 18.1 billion KRW, 460.7% higher than the appraised price.

The reason for the high sale price of the site is pointed out to be that although a restoration order corresponding to the cancellation of the implementation plan approval was issued for the project site, Yeosu City neglected to revert the land’s zoning and district to the original status and left it as an amusement park where development activities including hotel facilities, entertainment, and leisure facilities are possible.

The national and public land area purchased by the project operator, Intervision Co., Ltd., amounts to approximately 11,310㎡. This accounts for about 40% of the total 29,265㎡ land area at 4 Sujeong-dong, Yeosu City, which was the auctioned property under Suncheon Court case 2018Takyeong2001.

In other words, the project operator who purchased the national and public land 10 years ago through a private contract at the appraised price sold it 10 years later at 460.7% above the appraised price.

Due to Yeosu City’s refusal to disclose data and requests for information disclosure, the Asia Economy reporter could only make a simple comparison.

Dividing the winning bid amount of 18.1 billion KRW by the auctioned land area of 29,265㎡ results in a price of 618,486 KRW per square meter. Multiplying this by the national and public land area of 11,310㎡ gives a sale price of approximately 6.995 billion KRW attributed to the national and public land.

Also, dividing the Suncheon Court’s appraised value of 3.929 billion KRW by the land area of 11,310㎡ results in 134,256 KRW per square meter. Multiplying this by the national and public land area estimates the 2018 appraised value at approximately 1.518 billion KRW.

Meanwhile, the appraised value at the time the project operator purchased the national and public land in 2010 was much lower than the estimated 2018 appraised value of 1.5 billion KRW.

The project operator who cheaply purchased the national and public land in the Yeosu Asset Park area, renowned worldwide for its beautiful scenery, at the appraised price did not proceed with the project and became stranded. Yeosu City took no administrative action, leading to criticism that the city administration has a problem as the operator made tens of billions of won in capital gains by buying the national and public land at a low price.

"If a project operator obtains approval for the project implementation plan to purchase national and public land but the project does not proceed, there are repurchase regulations under individual laws when the implementation plan is canceled, and it is customary to follow these," said an official from a neighboring local government.

A Yeosu City official also explained, "There are cases where repurchase regulations exist under various laws for projects where the operator purchased land through private contracts due to project implementation plan approval," adding, "In the case of the Housing Act, the project must be implemented within two years, and if not, repurchase is possible."

A Yeosu City Urban Planning Department official stated, "If the project operator purchased the national and public land, it is the operator’s land regardless of the project status," and added, "For repurchase regulations, please inquire with the property management department."

The Yeosu City property management officer said, "If repurchase regulations exist under individual laws, repurchase is possible," but avoided a direct answer to Asia Economy’s question about repurchase related to the Asset Amusement Park, saying, "I will review the contents related to the Asset Amusement Park and respond."

Citizen A said, "Regardless of repurchase regulations, the area around the Asset Park has high preservation value, so redevelopment activities require reconsideration," and added, "It is hard to understand if Yeosu City has allowed this to continue without special reasons."

Another citizen, B, questioned, "If the project operator who initiated the amusement park development exercised the priority purchase right for national and public land and bought the land cheaply, shouldn’t repurchase be normal if the project was canceled?" and criticized, "If this continues, the national administration is only helping project operators speculate on land."

Meanwhile, during the reporting process, Asia Economy received a tip that the Suncheon Court has not been able to pay some of the distribution funds. It appears that administrative actions that Yeosu City should take still remain.