The following is an unauthoritative personal translation of an essay by someone who has some expertise on real estate problem in Korea after visiting the Myungdong district 3 redevelopment site to help readers understand why redevelopment problems happen again and again in Korea. As such, this post can be removed immediately by the request of the original author of the essay. The original essay which contains informative pictures (especially the first one about Yongsan disaster in 2009) can be viewed at the link listed at the bottom of this post.
Last Jan. 20, 2009, early morning, there was a tragic disaster on the top of Namildang building in Hangang-ro, Yongsan-gu, Seoul, South Korea, where 5 residents of demolition area and 1 riot police member died due to an explosion of inflammable materials in a watch tower built by the protesting residents during a police suppression operation.
Media calls this accident as ‘Yongsan disaster’ and it marks one of the most poignant experiences in modern Korean history. However, in year 2011 just over 2 years since that disaster, there’s another place that makes people concerned to encounter another Yongsan disaster at the heart of Seoul, Myungdong.
It’s the ‘Myungdong district 3 redevelopment area’ around 161-1, Ulji-ro 2-ga, Jung-gu, Seoul.
From a place that will be redeveloped into a financial building with 6 stories underground and 25 stories above ground, some tenants of shopping mall left after receiving compensation funds of 3.7M ~ 17M KRW (3500 ~ 16000 USD) but 11 tenants are not leaving yet.
They cannot leave because of premiums they paid.
If you would rent a unit in a nice location, they ask you to pay a premium. The premium which is also called a location fee can be from several thousand USD up to as much as several hundred thousand USD. The trouble is that the company that is in charge of the redevelopment would like to pay the tenants of Myungdong district 3 who paid premiums to rent their stores only relocation funds designated in the law without paying those premiums. Because of that, tenants who had paid hefty premiums to get their stores there met big troubles.
In fact, Mr. Park (61) who has been running a restaurant here for 9 years said “I spent 300M KRW (290K USD) as premium, interior design cost, and deposit but they would compensate me with only 14M KRW (13K USD). I guess all this fuss will end only when we all die.” As such, it is quite understandable that tenants who would suffer tremendous property losses revolt to the whole compensation scheme.
The Yongsan disaster in Jan. 20, 2009, took place also due to this premium.
Although 2 years have passed since that tragic disaster, the compensation policy for shopping mall tenants did not change anything.
Under this circumstance, the company in charge of redevelopment rather tried to execute demolition unilaterally by deploying demolition men and excavators last Jul. 18 and created highly volatile situation.
(Below are translations of sentences below pictures of original article.)
I hope project body, construction company, and administration authority would refrain from resorting to coercive measures but make reasonable compensation agreement with remaining shopping mall tenants to avoid another Yongsan disaster.
This banner in Japanese and English caught my eyes when I got Myungdong district 3 yesterday for the first time.
This is Cafe Mari that became the holy place for Myungdong district 3 tenants.
Inside Cafe Mari. Walls were covered with various slogans, notices, and posters. In a hot summer day, only a handful fans were working and I felt very hot in there.
Unexpectedly, many young people were inside Cafe Mari. They looked like volunteers to support tenants.
Most stores of Myungdong district 3 already left there so there were only a few people passing by even in the lunch time where alleys should be packed with diners.
Those colorful banners seem to show bare frustrations felt by tenants.
Pictures displayed alongside the road showing confrontations between tenants and demolition men so far.
One female tenant who seems worried about her uncertain future is lost in thoughts.
Behind the Hyangrin church which sits inside Myungdong district 3 and acts as anchor of remaining tenants rises the building of Industrial Bank of Korea (IBK), the redevelopment project body. Due to its overhanging height, the IBK building looked quite high-handed.
Epilogue: Looking at the pains of shopping mall tenants struggling in Cafe Mari which was not well air-conditioned in hot summer weather myself, it was really heartbreaking. If I can make a suggestion, I would consider increasing floor area ratio of current building that is supposed to be 6 stories underground and 25 stories above ground by constructing more units to basement or 1st floor and allotting some units to tenants.
If they can expend slightly more than the construction cost they’ve already put aside, it can solve the whole problem with very small cost.
- The original article is located here: http://board.realestate.daum.net/gaia/do/estate/knowHow/read?bbsId=knowhow&articleId=11064&nil_profile=estatetop&nil_communitysubright=estatedebate5