The Anti-Corruption Commission Holds Full Committee Meeting to Confirm Songhyeondong Site Price and Payment Method
Key Issues Like 'Sale Contract Timing' and 'Seoul City-LH Land Exchange' Not Disclosed
"Legal Effect Under Civil Law... Contract Timing, Price, and Seoul City Land Are Under Negotiation"
[Sejong=Asia Economy Reporter Moon Chaeseok] The government announced that it has confirmed the land price determination and payment method among Korean Air, Seoul Metropolitan Government, and Korea Land and Housing Corporation (LH) regarding the mediation of the sale of Korean Air’s Songhyeon-dong site.
The Anti-Corruption and Civil Rights Commission (ACRC) announced on the 27th that the three institutions submitted the mediation agreement signed on the 31st of last month to the plenary committee the day before and gave final confirmation. According to the Anti-Corruption and Civil Rights Commission Act, the mediation agreement has the effect of a civil law settlement. This means that the three signatory institutions are legally bound to comply with the mediation contents.
The plenary committee’s agreement reached the day before concerns the price determination and payment method. The timing of the sales contract and the public land that Seoul City agreed to exchange with LH as a counter-benefit for the Songhyeon-dong site were not disclosed. An ACRC official explained, "Since the transaction between the parties has not proceeded, it cannot be disclosed."
First, the contract method is a “third-party sale method,” where Korean Air and LH will enter into a sales contract for the Songhyeon-dong site, and Seoul City and LH will enter into an exchange contract for public land. The price will be determined by averaging the amounts appraised by four appraisal firms recommended by Korean Air and Seoul City, two firms each. LH will pay 85% of the sales price to Korean Air within two months after the contract date, and the remaining balance will be paid upon completion of the public land exchange.
The location of the public land that Seoul City will offer LH as a counter-benefit for receiving the Songhyeon-dong site has not been revealed. According to the ACRC, "Negotiations are still ongoing."
The ACRC evaluated this mediation by stating, "It laid the foundation for overcoming the crisis in the aviation industry and opening the Songhyeon-dong land to citizens," and added, "It produced an agreement satisfactory to Korean Air, which urgently needed a swift land sale; Seoul City, which must follow administrative procedures such as urban planning facility decisions; and LH, which requires land for housing supply."
Lee Jeonghee, Vice Chairman of the ACRC, said, "This mediation is significant in that it wisely harmonized the creation of a public space that preserves the historical and cultural value of the Songhyeon-dong site with supporting the self-help efforts of aviation companies facing an unprecedented crisis due to COVID-19."
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