Jung-gu District Office Warned Seoul Govt of Good Morning City

The Jung-gu District Office in Seoul urged Good Morning City not to sell the rights to run stores in a large shopping mall it allegedly planned to build downtown Seoul as the real estate company began to sell the rights to investors even before it won approval. The district office also asked the Seoul city government to address the loophole that allows such risky behavior, according to sources close to the case on July 9.

▽District Office Sensed Something Wrong

At the office of Good Morning City Investors Association located at Jeil Bank Building in Euljiro Sixth Street in Jung-gu, Seoul, some 100 investors who bought the rights to run stores were sighing.

Some 3,000 people invested 347.6 billion won to buy the rights to run stores in the planned 23-story large shopping mall at the center of Dongdaemun Shopping Town. With the company filing for bankruptcy, however, they will find no way to get the money back.

Chairman of GMC Yoon Chang-yeol, who is currently under custody, began to sell the rights in September 2001 even before the company won approval from the district office for building a large shopping mall.

The Jung-gu district office, fearing that if the plan was delayed or hit a snag it would lead to great deal of financial losses of investors, asked the Seoul city government to stop the company from selling the rights and set a plan to protect investors in November 2001.

Then the Seoul government amended the related law in January last year to require real estate developing companies to get concessions from more than two thirds of land owners to apply for building a new structure, and later in August required companies building houses and officetels to sell the rights after they win approval for construction. Yet, business buildings were not subject to the revised law.

Having seen investors feverishly rushing to buy stores in the planned shopping mall, the Jung-gu district office urged twice on January 16 and April 1 last year GMC to stop selling the rights, while asking the Seoul government to take due measures to protect investors. The demands were never met, however.

▽GMC Gets Approval in Dubious Way

GMC managed to win approval for construction from the Seoul city construction and transportation planning panels in June and August last year respectively, inviting suspicions.

The construction planning committee began to review the proposal in April last year. Of 43 committee members who are city officials, professors and architects, about two thirds opposed the plan. ˝We were surprised to hear the plan to tear down a 16-story building nearby to build the shopping mall,˝ said a member of the committee who was a part of the review team. ˝The building was less than 10 years old and we thought it was waste of resources.˝

The committee looked into the proposal three times and passed it in the final deliberation on June 12, unable to find a way to stop the plan. Reconstruction of apartment buildings is allowed only when they are more than 20 years old, but no such rules exist for business buildings.

˝The news that some of members who earlier opposed the plan changed their mind and okayed the proposal raised suspicions,˝ said Yoo Sang-oh, senior researcher at urban planning team of the Korea Housing Corporation who wrote an article against the demolition of the 16-story building.

The transportation committee also passed the proposal in September last year after two times of deliberation sessions. The committee looks into only effects on the city`s transportation system apart from construction itself, said a Seoul City official, indicating that the decision by the transportation committee was legitimate.

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