[Gwangju, From Jeonbang to The Hyundai] How a Mega Complex Mall Is Transforming the Local Commercial District (Part 2)

"30 Million Visitors Forecasted: 'Rosy Outlook' Met With Mixed Reactions"
Merchants and Citizens Divided Over Commercial Area Impact Assessment
Hopes for Jobs and Sales, Yet Tenants and Small Businesses Remain Uneasy

"30 million annual visitors, 2 trillion won in production inducement effect."

The commercial area impact assessment figures released by Gwangju City for the complex shopping mall were filled with rosy forecasts. However, local merchants responded differently. There was backlash, with comments such as "a list of numbers detached from reality" and "at the level of a conglomerate's promotional material." Expectations and concerns, perspectives within the city, remain divided. Some see it as an opportunity, while others see it as a precipice. The gap in the lived reality, hidden behind the numbers, has yet to be bridged.

Bird's-eye view of The Hyundai Gwangju. Provided by Gwangju City

In May, Gwangju City held an interim report meeting for the "Complex Shopping Mall Commercial Area Impact Assessment Research Project" in the city hall's medium conference room, sharing interim results. This research project, commissioned by Gwangju City since August 2023, is being led by Professor Cho Chunhan of Gyeonggi University of Science and Technology. The meeting was attended by Deputy Mayor Kwangwan Ko, deputy district heads from five autonomous districts, merchant organizations, and about 30 citizens. The research team analyzed credit card sales data and compared similar cases in Daejeon, Daegu, and other cities to diagnose the characteristics and impact of Gwangju's commercial area.

Professor Cho diagnosed, "Gwangju's commercial area is domestic demand-oriented, making it highly vulnerable to decline as the population decreases." According to the report, within a 5-kilometer radius of The Hyundai Gwangju, positive effects are expected in sectors such as restaurants, electronics and furniture, clothing and fashion, and supermarkets. On the other hand, the cosmetics, coffee, and confectionery sectors are expected to face potential harm. The research team also proposed coexistence measures, such as expanding special guarantee programs. The number of visitors is estimated at 30 million annually, with 19 million expected to use the surrounding commercial area. The economic ripple effect is projected to be 2.364 trillion won in production inducement and 12,600 jobs created.

Gwangju City held an interim report meeting on the "Complex Shopping Mall Commercial Area Impact Assessment Research Project" on May 14th in the city hall's medium conference room. The meeting was attended by over 30 people, including Deputy Mayor Kwangwan Ko, deputy district heads from five autonomous districts, related officials, the Small Business Association, the Merchants Association, and citizens. Photo by Gwangju City

The commercial area impact assessment for complex shopping malls has always been accompanied by controversy amid inter-regional competition to attract such facilities. In particular, projections for economic effects and job creation can vary greatly depending on the calculation methods and assumptions used. There are also calls to verify the gap between the report's indicators?such as "30 million annual visitors" and "12,600 jobs created"?and reality. A professor of economics at a local university said, "Since these figures are used as policy grounds, the calculation methods must be explained and post-verification must be conducted in parallel."

Along with such criticism, the Jeonnam and Ilsin Textile Site Development Damage Countermeasures Committee recently issued a statement, claiming that tenants who have run businesses for a long time at the Jeonnam Textile logistics center now face closure due to eviction lawsuits and forced execution. They argued, "Gwangju City is handing over a historic site to a conglomerate as a preferential deal, while neglecting measures for actual victims," and added, "Through a citizen signature campaign, we will demand the recovery of development profits and responsible governance."

The Gwangju City Merchants Association also protested, calling the commercial area impact assessment report "at the level of a conglomerate's promotional material." Association President Kim Seungjae pointed out, "The report lacks basic analyses such as impact surveys by radius from the complex shopping mall, cross-analysis of small business sales and population, and complex mall sales. It is merely a simple sales calculation that does not even reflect the disposable income of Gwangju citizens." He also criticized the research firm's statement that "the opening in Buk-gu is a stroke of luck," calling it "an out-of-touch remark that ignores local realities."

Within the distribution industry and related sectors, there are also suggestions that "at the very least, institutional measures should be put in place to ensure that local youth and small business owners do not go out of business." There is a growing call for the establishment of a permanent consultative body involving Gwangju City, Buk-gu District Office, Hyundai Department Store, and small business organizations.

Old Jeonbang and Ilsin Textile Sites, Imdong, Bukgu, Gwangju. Photo by Bohyun Song

In fact, a survey on "Attracting Complex Shopping Malls and Coexistence Measures" conducted by polling agency Poll Insight at the request of the Gwangju City Council in October last year also revealed a clear perception gap between citizens and small business owners. Among 300 small business owners, 40.7% responded "in favor of one, opposed to three," 24.3% were "opposed to attracting any," and 35% were "in favor of all three."

The perceived impact of the complex mall on the local commercial area was 56.4 points on average among citizens and 34.4 points among small business owners. Satisfaction with the project was 58.57 points and 37 points, respectively. Perceptions of sharing the burden of coexistence resources were similar, at 55.11 points for citizens and 55.42 points for small business owners.

On the other hand, the Gwangju Employers Federation evaluated the entry of The Hyundai Gwangju as an opportunity to revitalize the local economy. Vice Chairman Kim Dongchan stated, "It should become a complex cultural space where young people gather and grow together with the region," adding, "Gwangju, which is suffering from severe youth outflow, needs an attractive space like The Hyundai Seoul." He estimated that 2,000 to 3,000 regular staff would be needed after opening, emphasizing that hiring should prioritize local youth. He proposed coexistence measures such as regular job fairs, improved welfare for brand employees, joint marketing, cross-usage of points, shared parking lots, and agricultural specialty product sales halls, stressing, "Coexistence is more about action than words. Institutional measures and local oversight must go hand in hand."

A representative of The Hyundai Gwangju stated, "We can provide more details on employment plans and coexistence measures as the opening date approaches," and added, "Groundbreaking is scheduled for the second half of this year, but the exact timing has not yet been determined."