Admission Revenue Only 26.8 Billion Won in 5 Years, Land Sales Reach 800 Billion Won
Vacancy Rate in Commercial Areas Hits 87%
"Merchants Are Suffering While Developers Reap Profits"
Controversy Over Hasty Permits and Suspicions of Zoning Changes
Promised 1,400 Direct Jobs, But Only Double-Digit Employees Now
"Second Baekhyeon-dong" vs. "Not an Achievement, Just Attraction Mentioned"... Political Strife Continues
The Turtle Island project in Siheung, Gyeonggi Province, is shaking up the presidential election landscape. The controversy began on May 24, when Lee Jae-myung, the presidential candidate of the Democratic Party, mentioned attracting Wave Park during a campaign event in Siheung. He stated, "We all stepped up and made it happen, so it only took two years to complete the permitting and construction." Following this, a series of issues emerged, including a profit structure centered on real estate, a dismal vacancy rate in local commercial areas, and suspicions of hasty zoning changes. Political strife continues, with Kwon Seong-dong, co-chair of the People Power Party’s election committee, and Kim Eun-hye, chair of the special committee investigating alleged corruption related to Lee Jae-myung and the Turtle Island project, both casting early votes at Turtle Island. The fact that the majority of revenue came from "land sales" has also drawn criticism, with many pointing to it as an example of the pitfalls of government-led development.
96% of Revenue from Real Estate vs. 3% from Admission Fees
Wave Park is the world’s largest artificial surfing facility, launched through a memorandum of understanding (MOU) signed in 2018 by then-Gyeonggi Governor Lee Jae-myung, Siheung City, Korea Water Resources Corporation, and Daewon Plus Construction Group. However, the project became focused on real estate development rather than tourism. Daewon Plus Construction, the parent company of Wave Park, sold land or pre-sold commercial and accommodation facilities on 17 plots around Siheung Culture Park supplied by the water resources corporation, generating approximately 800 billion won in revenue (from land sales and pre-sales) over five years from 2020 to last year. During this period, land sales related to real estate development and sales amounted to 694.4 billion won, and pre-sale revenue reached 109.1 billion won, totaling 803.5 billion won.
While "land sales" were highly profitable, the actual performance of the tourism facility was lackluster. According to financial disclosures filed with the Financial Supervisory Service, Wave Park’s admission revenue was only 26.8 billion won, or just 3% of its total revenue of approximately 834.1 billion won over the five-year period from 2020 to last year. In contrast, real estate-related revenue from land sales and pre-sales accounted for more than 96% of the total.
Wave Park’s cumulative net profit over five years was 87.4 billion won, more than eight times its capital of 10 billion won. Since 2023, when development was completed, admission revenue has not been sufficient to cover operating costs, resulting in a deficit. Net losses amounted to 17.6 billion won in 2023 and 68 billion won last year. Selling and administrative expenses were 25.1 billion won in 2023 and 21.1 billion won last year, with fixed costs far outweighing revenue.
The deterioration of Wave Park’s performance has also become a burden for its parent company, Daewon Plus Construction. Wave Park is a wholly owned subsidiary of Daewon Plus Construction. Daewon Plus Construction recorded consolidated sales of 76 billion won last year, a 47.6% increase from the previous year, but posted operating losses for the second consecutive year. The company recorded an operating loss of 20.2 billion won in 2023 and a further loss of 7.3 billion won last year, with Wave Park’s poor performance directly impacting the parent company. However, Daewon Plus Construction’s debt ratio (total liabilities divided by total equity) stands at 96%, which is considered sound.
Daewon Plus Construction is a comprehensive development company established in 1999. It has previously undertaken high-end residential and tourism infrastructure projects, such as Doosan We’ve The Zenith in Haeundae, Busan, and the Songdo Marine Cable Car. Its headquarters is located in Doosan We’ve The Zenith in Haeundae. It is one of the affiliates of Daewon Plus Group, a mid-sized private developer focused on construction and real estate development through subsidiaries such as Daewon Plus Development, Hyunwon Development, Geumgwang Construction, and Daewon Plus Industry.
"Merchants Are Suffering While Developers Pocket the Profits"... Suspicions of Hasty Zoning Changes
Doosan We’ve The Zenith in Haeundae, where the headquarters of Daewon Plus Construction, the parent company of Wave Park, is located.
Suspicions of "hasty permits" and "preferential treatment" have also been raised regarding the development of commercial land, including the Wave Park site. Through a district plan change approved by the Seoul Regional Land Management Office, land originally zoned for mixed-use residential complexes was converted to commercial and office use, and the height limit for some commercial areas was relaxed from 15 to 45 floors. Some businesses, such as karaoke bars and massage parlors, which were originally restricted in the public offering guidelines, were also permitted. As a result, private developers are believed to have maximized profits from "land sales" by changing land use designations.
Meanwhile, according to the National Pension Service’s workplace registration records, Wave Park had only 36 employees as of April. This is a stark contrast to Gyeonggi Province’s initial projection of 1,400 direct jobs and 8,400 indirect jobs at the time of opening. The economic revitalization effect for the local area claimed by Lee Jae-myung has also come under criticism, as the actual occupancy rate of nearby commercial areas stands at 13%, with a vacancy rate of 87%.
The dispute over the truth and responsibility surrounding the Turtle Island development is expected to continue for some time. The People Power Party has labeled Turtle Island as "the second Baekhyeon-dong incident," emphasizing Lee Jae-myung’s responsibility. The party is pressing for a parliamentary investigation and the enactment of a special law to uncover the truth. In contrast, the Democratic Party maintains that "Lee Jae-myung has never boasted about the Turtle Island project as an achievement," and that "Wave Park was attracted to Turtle Island in a situation where there were no tourist attractions, and this was mentioned during the campaign."
Amid political strife, merchants who opened businesses in Turtle Island with high hopes are suffering daily. Recently, some buyers of a commercial property filed a fraud complaint against a sales agency, claiming they were deceived by false and exaggerated advertising. Police have launched an investigation, and the alleged damages are reported to be around 80 billion won.
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