One Day Before Agreement on Songhyeon-dong Site... Challenges Still Remain

[Asia Economy Reporter Yuri Kim] The ongoing conflict between Korean Air and the Seoul Metropolitan Government over the Songhyeon-dong site in Jongno-gu, Seoul, will be temporarily resolved on the 26th through mediation by the Anti-Corruption and Civil Rights Commission. The Seoul Metropolitan Government will secure the Songhyeon-dong land through the Korea Land and Housing Corporation (LH) via a third-party purchase method, and exchange city-owned land with LH. However, there are still hurdles to overcome, such as issues arising after the land purchase price is determined and the confirmation of city-owned land to be exchanged with LH.

On the 26th, the Anti-Corruption and Civil Rights Commission will hold an on-site mediation meeting at the Songhyeon-dong site with the participation of the Seoul Metropolitan Government, Korean Air, and LH. The agreement they sign will include the final conclusions on major issues such as the timing and method of the Songhyeon-dong land sale and the price determination method.

The third-party purchase method, where the Seoul Metropolitan Government secures the Songhyeon-dong land through LH, was devised as a way to complete payment to Korean Air early. The price determination method is likely to involve appraisals conducted separately by both the Seoul Metropolitan Government and Korean Air, followed by negotiations based on the results. However, this could lead to renewed conflicts over price differences derived by each party and the reliability of each appraisal. Generally, in public interest projects, the price is determined by the arithmetic average of multiple appraisals.

There are also anticipated difficulties in confirming the land to be exchanged. When the Western Driver’s License Examination Office in Mapo-gu was mentioned as a candidate for the exchange land, local governments and residents strongly protested. The day before, the Emergency Committee of the Sangam-dong Residents’ Union issued a statement in front of Seoul City Hall opposing the plan, stating, "The Western Driver’s License Examination Office is designated for development as a job creation and industrial hub in the relatively underdeveloped northwest Seoul area, along with the planned landmark site in Sangam-dong," and emphasized, "We condemn the government’s housing supply policy that sacrifices this area while neglecting Sangam-dong’s severe problems such as lack of infrastructure, absence of transportation facilities, and overcrowded education."

Yoo Dong-gyun, Mayor of Mapo-gu, also issued a statement on the 20th urging the halt of unilateral land exchanges. He said, "When the 8.4 measures were announced, I proposed forming a four-party consultative body for discussions, but there has been no contact from related agencies so far," and suggested, "Let’s form a four-party consultative body including the Ministry of Land, Infrastructure and Transport, Seoul Metropolitan Government, Mapo-gu, and local residents to consider the utilization plan for the license examination office."

The Seoul Metropolitan Government responded, "The alternative site has not yet been confirmed, and the Western Driver’s License Examination Office in Mapo-gu is one of the sites under review."

The Songhyeon-dong site is a 36,642㎡ area located at 48-9 Songhyeon-dong, Jongno-gu, Seoul. It was owned by Korean Air and planned for sale, but the sale plan was disrupted after the Seoul Metropolitan Government announced plans to develop the site into a cultural park. In response, Korean Air filed a grievance with the Anti-Corruption and Civil Rights Commission in June, claiming damages caused by the Seoul Metropolitan Government’s cultural park plan for the Songhyeon-dong site.