Kyungsilryeon "10% Public Recovery of Daejang-dong Development Profits... Kim Man-bae and 7 Others Pocketed 850 Billion Won"

[Asia Economy Reporter Kim Min-young] A civic group has claimed that the public recovered only 10% of the profits from the Daejang-dong development project.

The Citizens' Coalition for Economic Justice (CCEJ) held a press conference on the 19th, stating, "The development profits generated from the Daejang-dong development project, which was 100% forcibly acquired by the local government of Seongnam City, are estimated at 1.8211 trillion KRW, combining land sales of 724.3 billion KRW and apartment sales of 1.0968 trillion KRW." They added, "Excluding the 183 billion KRW recovered by Seongnam City, the private sector, including Hwacheon Daeyu, took 1.6 trillion KRW in profits. Only 10% of the development profits were recovered by the public, while 90% went to the private sector."

CCEJ analyzed the land sale amounts and housing sales revenue of Daejang-dong based on the 'Apartment and Multi-family Housing Sales Status' and 'Supply Price Status by Land Type' data submitted by the Ministry of Land, Infrastructure and Transport to the office of Justice Party lawmaker Sim Sang-jung. They estimated the development profits by calculating the costs of land development and apartment sales.

The analysis estimated that the development profits from the Daejang-dong development project, which was 100% forcibly acquired by the local government of Seongnam City, amounted to 1.8211 trillion KRW, combining land sales of 724.3 billion KRW and apartment sales of 1.0968 trillion KRW.

Among these, the profit from land sales was 724.3 billion KRW. This was calculated by subtracting the development project cost of 1.5 trillion KRW, announced by the Democratic Party presidential candidate Lee Jae-myung's campaign, from the Daejang-dong land sale amount of 2.2243 trillion KRW.

The sales revenue from 4,340 apartment units across 13 blocks in the Daejang-dong residential area was estimated at 3.94 trillion KRW. The sales revenue per unit was approximately 910 million KRW (average 24.52 million KRW per pyeong), which differs from the estimated cost per unit of 660 million KRW, calculated considering land sale prices and appropriate construction costs. The sales profit was estimated at 6.82 million KRW per pyeong, 250 million KRW per unit, totaling 1.0968 trillion KRW.

The sales revenue of Hwacheon Daeyu Asset Management, which sold five residential blocks, was estimated at 453.1 billion KRW. CCEJ added, "Including the 404 billion KRW dividends received from land sales, the seven people related to Hwacheon Daeyu and Cheonhwa-dongin gained 850 billion KRW in profits from the Daejang-dong project, with 650 billion KRW going to Kim Man-bae and his family."

In conclusion, 90% of the development profits from the Daejang-dong development project, which was 100% forcibly acquired by the local government of Seongnam City, were taken by the private sector. CCEJ pointed out, "Only 10% of the development profits were recovered by the public, while 90% went to the private sector. Using the public authority entrusted by the people (land expropriation rights, land use change rights, exclusive development rights), Seongnam City forcibly acquired greenbelt land such as fields and forests, causing an unfair gain of 1.6 trillion KRW to seven individuals and private developers."

CCEJ urged, "The Kim Man-bae family (Hwacheon Daeyu and Cheonhwa-dongin 1 to 3) earned 3,800 times their investment, and the four owners of Cheonhwa-dongin 4 to 7 gained 205.4 billion KRW, obtaining 1,100 times their investment in unfair profits. A special investigation should reveal who led the project design that funneled thousands of billions to specific individuals."