The 'Key' Battle Ends... Mia 3 District Agrees to 11 Billion Won Increase in Construction Costs

GS Construction Notifies 'No Move-In Before Agreement'
Seoul City Mediates, Construction Costs to Increase

Move-In Possible but Association Says "Bitter Compromise"
Religious Land Sold to Reduce Additional Fees

The redevelopment association of Bukseoul Xi Polaris (Mia 3 District) in Gangbuk-gu, Seoul, has agreed to GS Construction's demand to increase the construction cost. Negotiations accelerated after GS Construction notified that it would not provide entrance door keys due to the construction cost dispute. To reduce the additional burden exceeding 100 million KRW per member, the association decided to sell the religious site within the complex. With the agreement between both parties, the scheduled move-in at the end of this month is expected to proceed smoothly.

Perspective view of Bukseoul Xi Polaris, Gangbuk-gu, Seoul.

According to the maintenance industry on the 22nd, the Mia 3 District redevelopment association met with GS Construction and the Seoul City maintenance project coordinator on the 13th and agreed to increase the construction cost by 11 billion KRW. The increase plan will be finalized after a general meeting of members on the 7th of next month.

GS Construction agreed to withdraw the lawsuit for the construction cost increase filed in March upon approval at the general meeting. Initially, GS Construction requested the association to raise the construction cost by 25.6 billion KRW in January this year, citing rising raw material prices, soaring labor costs, and the impact of high interest rates. When the association did not accept this, GS Construction filed a lawsuit worth 32.399 billion KRW in March. The claim included delays in material supply caused by the Cargo Solidarity general strike and costs for handling complaints at the construction site.

Despite the lawsuit, the association opposed further increases. They cited the contract clause from last year’s construction cost increase stating "no further increases" as the basis. GS Construction reduced the requested increase to 16 billion KRW due to opposition from association members and sent an additional burden statement reflecting this to the members in June. Along with this, they notified that "payment of the revised burden is required for move-in." The contractor usually provides entrance door keys to members and prospective residents before move-in but stated they would withhold the keys.

As move-in approached, members worried about disruptions and requested mediation from the Seoul City maintenance project coordinator. The association demanded that move-in be possible regardless of construction cost negotiations, but this was not accepted. At the first meeting after Seoul City’s mediation, GS Construction lowered the demand by an additional 2 billion KRW to 14 billion KRW. After two more negotiations, the city coordinator proposed 11 billion KRW, and GS Construction and the association agreed, finalizing the amount.

The association stated they agreed reluctantly. Chairman Choi Myung-woo said, "There was great concern about move-in. About 100 members had planned to move at the end of this month, and if they cannot move in on time, they would have to be homeless," adding, "We agreed reluctantly due to move-in concerns, but it is true that we feel unfair."

Mia 3 District has seen construction cost increases five times since the first contract in 2014. The cost rose from the initial 198 billion KRW to 280 billion KRW. If the recent 11 billion KRW increase is covered solely by members’ contributions, each member is estimated to pay an additional burden ranging from a minimum of 6 million KRW to a maximum of 100 million KRW. To reduce the burden, the association decided to sell a 300-pyeong religious site in front of Building 108. It is reported that a public dormitory (Happy Dormitory) for university students was planned on this site.