Government Policy on Metropolitan Area under Controversy

The distribution complex project, jointly initiated by department store chain Shinsegae and U.S. retailer Chelsea, is now on the brink of collapse after the promulgation of the government’s policy to regulate the metropolitan area.

It is expected that the controversy surrounding the validity of the government’s regulatory policy on the metropolitan area will increase once Shinsegae’s plan to build the distribution complex are disrupted. This follows the recent decision by the government to ban Hynix Semiconductor from establishing any new plants in Icheon.

The Ministry of Construction and Transportation (MOCT), Gyeonggi Province and Yeoju-gun, said that the MOCT was informed of the violation of the high-end clothing discount store “Shinsegae-Chelsea,” currently under construction in the Yeoju distribution complex in Yeoju-gun, under the Seoul Metropolitan Area Readjustment Planning Act.

Once the project is found to have violated the Act, Yeoju-gun, which authorized the project, will most likely demand that the companies downsize their plans or repeal its initial building authorization.

The MOCT cited the fact that it is forbidden to build a store with total floor area exceeding 15,000m² (4537.5 pyeong) in the nature protection zone, as a reason for the breach.

Discount store Shinsegae-Chelsea comprises two buildings with total floor area of 14,352 m² (4341.5 pyeong) and 12,637 m² (3822.7 pyeong), respectively. Each store is bigger than the old building that housed Shinsegae’s main store (around 3,000 pyeong), located in Chungmuro, Jung-gu, Seoul.

MOCT official, Park Moo-ik, stated, “The two buildings should be considered as one building since they have same owner and are connected. For this reason, the store size exceeds the gross floor area limit.”

However, Gyeonggi Province and Yeoju-gun oppose the MOCT’s stance, noting that, “It is unreasonable to consider the two buildings as one because a four-lane road with a width of 20 meters will be built between the two buildings.”

Yeoju-gun requested that the Ministry of Legislation (MOL) interpret the constitutional and statutory aspects of MOCT’s argument. The MOL convened an inquiry commission to interpret the constitutional provisions, but decided to postpone the announcement of their final decision until March 6, due to differing opinions among members.

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