[Asia Economy Yeongnam Reporting Headquarters, Reporter Ju Cheol-in] Geoje City, Gyeongnam Province, has filed a complaint with the prosecution against the developer of the half-price apartment project initiated by the former mayor.
On the 2nd, Geoje Mayor Byeon Gwang-yong held a press conference at City Hall and stated, "We have filed a complaint against the developer with the prosecution to verify whether the developer submitted false settlement statements, deceived Geoje City and its citizens, and obstructed the settlement of development profits."
Geoje City formed a task force (TF) to investigate whether the developer submitted false settlement statements and whether excess profits occurred.
Mayor Byeon criticized, "The developer has not cooperated in submitting materials for the settlement and has also refused to provide data related to the commercial building sale prices."
He pointed out, "After independently verifying the commercial building registry and actual transaction report contents, there was a significant discrepancy compared to the 12.3 billion KRW settlement statement submitted by the developer."
He added, "If the developer submits false data, the settlement will inevitably be false, and it is highly likely that no excess profits will be recognized. We will uncover the truth regarding the falsity of the settlement data and any inflation of construction costs or sale prices, and we will definitely recover the unjust development profits."
Along with the prosecution complaint, Geoje City plans to conduct its own verification work to recalculate the development profits.
Mayor Byeon said, "We will do our best to identify excess profits, prevent unjust gains from concentrating on the developer, and ensure that these are recovered by Geoje City."
This project, which aims to provide rental half-price apartments in Yangjeong and Mundong districts to stabilize housing for low-income, homeless citizens, was promoted by Geoje City starting in 2013 according to the pledge of former Mayor Kwon Min-ho.
Geoje City planned to change the land use of mountainous and agricultural land, where apartment construction was impossible, to land where apartments could be built, in exchange for receiving a donation of the apartment project site (24,000㎡) from the developer, with the goal of supplying apartments priced around 3 million KRW per pyeong.
At that time, the average apartment sale price in the Geoje area was about 7 million KRW per pyeong, which is why the project was called the half-price apartment project.
The developer promised to invest in public interest projects or make donations if profits exceeded 10% of the investment, but later claimed that no profits were generated, raising suspicions of inflated project costs.
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