Gimhae City in South Gyeongsang Province has issued a direct rebuttal to the allegations raised the previous day regarding the Pungyu General Logistics Complex development project.
On August 5, Mayor Hong Taeyong held a press conference at the Gimhae City Hall press center and stated, "The project is proceeding legitimately and in accordance with proper procedures, without any preferential treatment."
Hong Taeyong, mayor of Gimhae City, Gyeongnam, is addressing allegations related to the development project of Pungyu General Logistics Complex. Photo by Lee Seryung
Mayor Hong dismissed the allegations, saying, "From the official designation notice of the Gimhae Pungyu General Logistics Complex in November 2024 to the application to South Gyeongsang Province on June 13, 2025 for approval of the revised development plan and implementation plan?which includes the donation of a 23,000-square-meter public hospital site and residential complex development?there was no external pressure or concealment whatsoever."
The previous day, Democratic Party lawmaker Kim Jungho, representing Gimhae-eul, and others held a press conference at the city hall press center to formally question Mayor Hong about the changes to the Pungyu General Logistics Complex development plan.
Representative Kim raised several issues: ▲ Why Gimhae City, which has the highest number of unsold apartments in South Gyeongsang Province, is attempting to change the logistics complex development project to an apartment development project despite opposition from the provincial government, which holds the approval authority; ▲ The legal basis for Gimhae City, which does not have the authority to approve logistics complexes, to sign a backdoor contract to change 40% of the logistics facility land to a 2,000-unit apartment development project; ▲ Whether the backdoor contract signed by Gimhae City is valid, given that South Gyeongsang Province requested the developer to submit a revised development plan for the logistics complex excluding residential complexes.
He also raised suspicions that Gimhae City and opposition parties had illegally intervened in the city's urban development projects.
Democratic Party of Korea Congressman Kim Jeongho is raising suspicions related to the development project of Pungyu General Logistics Complex in Gimhae City and is demanding an official response from the mayor of Gimhae. Screenshot from Congressman Kim Jeongho's official YouTube channel
The Pungyu Logistics Complex, designated as a distribution business site under the Act on the Development and Operation of Logistics Facilities, covers 323,490 square meters in the Pungyu-dong area. Although the project has been discussed for over 20 years, it has made little progress due to reasons such as failure to secure land and changes in project operators.
In May 2023, the South Gyeongsang Province review committee conditionally approved the development plan on the condition that the project operator sign a public contribution agreement, which seemed to accelerate the project.
However, in June, the project operator submitted a revised development plan and implementation plan?including the logistics complex, public medical land, and residential complexes?to South Gyeongsang Province, the approval authority, in accordance with a mutual cooperation agreement with Gimhae City. The provincial government, however, rejected the proposal, stating that it did not align with the purpose of the project.
On the day of the press conference, after returning from the Government Complex Sejong, Mayor Hong voluntarily held a briefing to explain the situation.
Mayor Hong said, "The proposed logistics complex site is the gateway to the city and a core location in terms of urban spatial structure. To establish the optimal development plan that aligns with planned urban management and long-term development, we conducted a study and analysis of appropriate development plans for the Pungyu-dong area from August to November 2023."
He explained that the study found that, considering factors such as the function of connecting the old and new city centers, improving citizens' quality of life, enhancing urban aesthetics, and addressing the shortage of public medical services, a mixed development of residential and medical complexes was more appropriate than a logistics complex alone.
Mayor Hong stated, "Rather than having a warehouse-type logistics complex visible at the city gateway, we considered placing the logistics complex on the right side of the main road from Naeoe-dong to Jangyu, and urban development on the left. This decision was unrelated to the project operator's profitability and was made for the location's characteristics and Gimhae's future development."
He added, "We notified the project operator of these study results and accepted the proposed land use plan that included residential facilities, signing a public contribution and mutual cooperation agreement."
He further emphasized, "The promotion of the urban development project is unrelated to the project operator's profitability and is based on the site's location at the gateway and Gimhae's future development."
He also said, "According to Article 2 of the Act on Logistics Facilities and Article 2, Paragraph 4 of the Enforcement Decree, it is possible to include residential complexes for logistics complex workers and users. The appropriateness of the scale and use of residential complexes will be determined by South Gyeongsang Province, which has the authority to designate logistics complexes."
Additionally, he explained, "Gimhae's high unsold apartment rate is largely due to a specific apartment complex with high prices. Sales are currently ongoing, and as Gimhae attracts population inflow from Sacheon and Yangsan, the urban development project will not cause unsold units to persist or surge."
Regarding the change of use for the former Baik Hospital site, Mayor Hong said, "The project operator proposed a district unit plan change that includes full contribution of land value gains, establishment of a pediatric medical institution, parks, and road expansion. A 300-bed public hospital site has been secured within the Pungyu Logistics Complex."
He continued, "After thoroughly reviewing the planned development of a site that had become an urban eyesore after years of neglect, as well as its potential to improve the cityscape, revitalize the local economy, and serve the public interest, we finalized the change. There were no findings of preferential treatment or legal violations in the comprehensive audit by the Board of Audit and Inspection from February to July this year."
Regarding the abandonment of the NHN data center construction project, he said, "After NHN decided not to build the data center, we intended to cancel the permit after a hearing in accordance with the Urban Development Act. However, the project operator, Hyundai Development Company, offered a public contribution of 22 billion won, and we judged that accepting this was more reasonable than leaving the project site idle."
Mayor Hong reiterated, "Our city has conducted administration in accordance with relevant laws such as the Urban Development Act and the Administrative Procedures Act. There has not been a single instance of preferential treatment; all administrative actions have been legal and legitimate."
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