Masanhaeyang New City 5th Preferred Negotiator Cancellation Developer: "First Trial Verdict Unacceptable, Will Appeal"

The private developer who lost an administrative lawsuit after contesting the cancellation of its designation as the preferred negotiator for the 5th public offering of the Masanhaiyang New City private mixed-use development project has reiterated its intention to appeal.

On June 24, Kim Joonghyup, CEO of Hubex PND of the HDC Hyundai Development Company Consortium, held a press conference at the Changwon Special City Hall press center and stated, "The first trial verdict is utterly incomprehensible from a common-sense perspective."

HDC Hyundai Development Company Consortium Hubex PND CEO Kim Joonghyup is stating his position regarding the cancellation of the designation as the preferred negotiator for the 5th public offering of Masan Marine New City. Photo by Lee Seryung

Kim said, "The first trial ruling only cited Changwon City's one-sided claims, which our company cannot accept at all," and added, "We intend to have the errors in the first trial verdict corrected by the High Court."

He argued, "The most important reason for filing the administrative lawsuit is that Changwon City's attitude during the implementation negotiations over the past year, since the inauguration of the 8th popularly elected mayor, was completely different from before."

He added, "It was as if the city was trying to exclude our consortium, making unreasonable demands for public contributions to the extent that it was impossible to proceed with the project." He continued, "We accepted 11 out of 12 negotiation items requested by Changwon City, and while we were internally coordinating to accept the final issue regarding the residential-type accommodation facility, we suddenly received a notice of cancellation of our preferred negotiator status."

HDC Hyundai Development Company Consortium Hubex PND CEO Kim Joonghyup is holding the Changwon City audit report related to the 5th public offering of Masan Marine New City. Photo by Lee Seryung

He also claimed that Changwon City had accused the consortium of becoming the preferred negotiator through improper means, citing the fact that Hyundai Development Company did not submit a letter of intent to participate in the public offering and therefore was not eligible to participate.

Kim stated, "We have already submitted an appeal to the Busan High Court," and emphasized, "The re-evaluation process for the 4th public offering project should not proceed while the final judgment has not yet been made."

He further urged, "It is reasonable to immediately suspend the 4th re-evaluation process and at least defer it until the appellate court has made its decision."

Masanhaiyang New City project site. Provided by Changwon Special City

The Masanhaiyang New City development project involves attracting private investment to construct apartments, tourism and cultural complex facilities, and commercial facilities on an artificial island created by reclaiming public waters of Masan Bay with earth and sand generated during the construction of Gapo New Port.

Since 2015, Changwon City has held five public offerings to select a private developer for the development of the 642,167-square-meter artificial island, but the project has been adrift for ten years due to ongoing lawsuits and conflicts without a developer being selected.

Previously, the HDC Hyundai Development Company Consortium was designated as the preferred negotiator for the 5th public offering of Masanhaiyang New City, but after 13 rounds of negotiations over more than two years, it failed to narrow differences with Changwon City over key issues such as changing the use of residential-type accommodation facilities.

Ultimately, Changwon City determined that further negotiations were meaningless and, after holding a hearing, canceled the consortium's status as the preferred negotiator.

Hubex PND, a member of the consortium, contested this decision by filing both an administrative appeal and an administrative lawsuit to cancel the cancellation of the preferred negotiator designation. However, the administrative appeal was dismissed in June last year, and the administrative lawsuit was lost on June 12.

Disagreeing with the first trial verdict, Hubex PND submitted an appeal to the Busan High Court on June 18.

Recently, Changwon City announced a re-evaluation of the GS Consortium, which had participated alone in the 4th public offering for Masanhaiyang New City but was eliminated from preferred negotiator status due to failing to meet the minimum score.

Saekyung Industrial Development, a member of the consortium, filed an administrative lawsuit against Changwon City after being eliminated from the public offering, claiming it received unfair scoring and evaluation. The company lost in the first trial but won on appeal and at the Supreme Court, and is currently urging for the re-evaluation to proceed.