HDC Hyundai Development Company Fails to Win Bangbaeshinsamho Reconstruction Contract as Contractor Selection Vote Rejected

Selected as Preferred Negotiator for Bangbaeshinsamho Reconstruction Project
Failed to Secure Majority Approval at General Meeting, Leading to Unsuccessful Bid

HDC Hyundai Development Company has failed to win the contract for the reconstruction project of Bangbaeshinsamho Apartment in Bangbae-dong, Seocho-gu, Seoul.

The day before the general meeting to select the construction company for the reconstruction of Bangbae Shinsamho, HDC Hyundai Development Company lined up to greet the association members. Photo by HDC Hyundai Development Company

According to the maintenance industry on July 27, the Bangbaeshinsamho reconstruction association held a vote the previous day to decide whether to select HDC Hyundai Development Company as the contractor through a private contract. Out of 410 votes, 228 were against, resulting in the rejection of the proposal.

HDC Hyundai Development Company was the sole bidder in the contractor selection bidding held in May, but the bidding failed consecutively. Afterwards, the company was designated as the preferred negotiator and had been negotiating the contract with the association.

According to current law, if the contractor selection for a maintenance project fails twice, a private contract becomes possible. However, since the proposal did not secure a majority of votes from association members at the general meeting, HDC Hyundai Development Company failed to win the contract.

HDC Hyundai Development Company proposed the complex name "The Square 270" (THE SQUARE 270), and presented the following business terms: construction cost of 8.76 million KRW per 3.3 square meters, business loan interest rate of CD+0.1%, additional relocation loan LTV of 100%, and 200 billion KRW in self-funded project acceleration costs. However, the proposal was not chosen by the association members.

Bangbaeshinsamho Apartment was completed in 1981 and consists of 6 buildings with a total of 481 units. It was designated as a maintenance area in September 2016 and received approval for association establishment in March 2019. After reconstruction, it will be transformed into a complex with 6 buildings, ranging from 5 underground to 41 above-ground floors, and a total of 920 units.