[Report] Restarting the Rusting JDC Healthcare Town and Resort-Style Residential Complex Project

Healthcare Town, Movements Including Hospital Opening Preparations
Resort-Style Residential Complex, 70% Land Compensation Within the Year

The Jeju International Free City development project, which had been halted for over seven years, has started moving again. The healthcare town and resort-style residential complex projects promoted by the Jeju International Free City Development Center (JDC) are the main focus. The Wooridle Green International Hospital (formerly Green International Hospital) within the healthcare town is scheduled to be reborn as a non-profit medical institution in the second half of this year, and the resort-style residential complex is gaining momentum, with a feasibility study for the resumption of the project completed at the end of last year.

JDC has openly revealed the projects that could have been concealed. Yang Young-cheol, Chairman of JDC, said, "We want to show the reasons and process why JDC, despite attempting to internationalize national projects and attract foreign capital, faced stagnation," adding, "The failure was a very significant experience. We want to demonstrate how a small public enterprise can succeed through foreign investment attraction."

Unfinished building within Jeju Healthcare Town / Photo by Noh Kyungjo

"Enjoy medical tourism and relaxation at Jeju Healthcare Town"

The healthcare town is located in the Dongheung and Topyeong-dong areas of Seogwipo City, Jeju Special Self-Governing Province, at an altitude of 300 to 400 meters. When visiting the site on the 13th, the Green International Hospital (hereafter the hospital) and condominiums, which lacked any signs of internal organization and human warmth, remained in a state reminiscent of ruins, with paint barely applied. Inside the hospital, beds were scattered and covered in dust. This was ironic given JDC officials' remarks that the altitude, rich in active oxygen, was ideal for health. Only the VIP rooms could be distinguished in terms of scale and facilities.

Since its establishment in 2002, JDC has been promoting projects related to the international free city in Jeju. One of these, the healthcare town, aims to create a complex medical tourism district to activate the attraction of overseas patients. It is designed to offer experiences including medical tourism, resort relaxation, and wellness parks.

The project structure involved both JDC's own development and attracting overseas investment. JDC sought investment from various countries abroad. However, the only positive response to the healthcare town project came from China's Greenland Group. Perhaps for this reason, signs inside the hospital were written in Korean, English, and Chinese, and Chinese was prominently displayed on the condominium exteriors. Some Chinese guests reportedly stayed in the condominiums, but since Greenland Group operated them, JDC officials said it was difficult to ascertain exact numbers.

Greenland Group proceeded with the second phase of the project, which included building hotels, commercial facilities, and resorts, but withdrew in 2017. Although the hospital was completed, it never opened. Yoo Kyung-heung, head of JDC's Medical Business Division, said, "It was initially planned to be the country's first for-profit hospital. However, due to strong opposition from residents and civic groups, the license was revoked and reinstated multiple times, restricting treatment to foreigners only. Greenland Group and Jeju Province engaged in a legal battle for over three years."

Beds at Wooridul Green International Hospital within Jeju Healthcare Town. The beds are disorganized and covered with dust. / Photo by Noh Kyung-jo

The legal battle concluded in July last year with Jeju Province's final victory. Meanwhile, ownership of the hospital transferred to Diana Seoul in January 2022. As construction delays prolonged and the resumption of investment became uncertain, both parties agreed in December last year for JDC to acquire part of Greenland Group's jurisdictional projects. JDC expects to invest approximately 500 billion to 600 billion KRW in reconstruction after acquisition.

Director Yoo said, "We signed a business agreement with the Korea Real Estate Board and received advisory services regarding the acquisition. We plan to formalize the acquisition from Greenland Group in the second half of this year," adding, "We will strive to normalize the healthcare town project, which is worth a total of 1.5 trillion KRW. We expect the hospital's opening to serve as a catalyst."

Will the 'Ocean View' value of Yerae resort-style residential complex shine?

The resort-style residential complex site in Yerae-dong, visited on the same day, showed rusting buildings. Although the location boasted an open ocean view in front of the complex, the atmosphere emitted by the gray buildings was gloomy.

The resort-style residential complex development is a project to build hotels, condominiums, commercial facilities, and performance halls over 741,193 square meters in the Yerae-dong area. The Malaysian Berjaya Group holds 81% and JDC 19% of the joint venture leading the project, but the project has been halted for nine years since 2015 due to permit invalidation. Kim Jae-il, head of JDC's Tourism Business Division Resort Complex Team, explained, "This project was promoted as one of the seven leading projects and was planned to be built as a super high-rise. It was revolutionary architecture in Jeju, to the extent that helicopters were used to test how the tall buildings would be affected by wind."

The Yerae resort-style residential complex facing the sea (left) / Photo by Noh Kyung-jo

However, 56.2% of the total area designated for lodging facilities became an obstacle. Kim said, "At that time, the project was conducted as a recreational area business, which was advantageous for floor area ratio, and foreigners could own lodging facilities individually. The problem was that lodging facilities are public-use facilities, so ownership concepts did not align, and courts ruled that they could not be considered recreational facilities," he explained. As a result, the project was halted from 2015, and the project permits disappeared in 2019. The project, planned to be developed in nine phases, stopped at phase one (65% completion).

Consequently, land ownership remains incomplete. JDC lost successive lawsuits against landowners. Ultimately, JDC is conducting compensation work to finalize ownership transfer. As of the 11th of last month, agreements were reached with 201 landowners, and 37.1 billion KRW (50.1%) of the total additional compensation of 74 billion KRW was executed. The goal is to execute over 70% by the end of the year.

In December 2020, JDC conducted a structural diagnosis of all 151 buildings, finding that while the framework was sound, sashes and interiors needed to be redone. Kim said, "Once the compensation rate reaches about 80%, we plan to actively promote the project," adding, "From next month, we will establish the basic plan for the resort-style residential complex development project. We will proceed as an urban development project to freely place facilities."