Exclusive
'Hannam Neighborhood Park Virtually Scrapped': Seoul City Unable to Proceed with Land Expropriation

[비즈한국] With the expiration of the implementation plan for the Hannam Neighborhood Park project in Yongsan-gu, Seoul, approaching this June, BizHankook's investigation has confirmed that it is virtually impossible for the Seoul Metropolitan Government to proceed with the expropriation of the site. The city won a final legal victory this past March in a lawsuit against the landowner, Booyoung Housing, regarding the validity of the project plan; however, it is reported that the land compensation costs, totaling 460 billion won, have become a major obstacle to the actual execution of the project. The Hannam Neighborhood Park development plan appears to be effectively scrapped, and the city plans to explore alternative measures, such as introducing public facilities to the site in the future.

According to a Seoul city official, it is virtually impossible for the city to apply for land expropriation for the park by June, when the implementation plan for the Hannam Neighborhood Park project expires. Although the city has explored options for expropriation, the inability to resolve budget and financial issues is cited as the primary reason. It is reported that Seoul City is now looking into urban management plans, such as introducing public facilities to the site, following the expiration of the Hannam Neighborhood Park development plan.

The validity of the implementation plan for Hannam Neighborhood Park ends this coming June. Under the National Land Planning and Utilization Act, if a developer of a long-term unimplemented urban planning facility fails to apply for expropriation of the project site within five years from the date of the public notice of the implementation plan, the plan loses its effect. The implementation plan for the Hannam Neighborhood Park project was publicly notified on June 25, 2020, and will lose its validity on June 25 of this year. The designation of this urban planning facility, which has been in place for over 20 years since its initial public notice, will also lose effect simultaneously with the expiration of the implementation plan in accordance with the National Land Planning and Utilization Act.

An official from the Seoul City Park Creation Division stated, "(Applying for expropriation by June) seems practically difficult," adding, "Since this was an area intended for a park, we intend to consult (with the landowner) from an urban management perspective to prevent haphazard development."

This decision by Seoul City is interpreted as being due to the massive costs required to secure the site. According to documents obtained by BizHankook through a public information disclosure request earlier this year, Seoul City estimated that the Hannam Neighborhood Park project would require 460 billion won in land compensation costs and 200 billion won in construction costs. To proceed with the project, the city would essentially have to pay roughly four times the 120 billion won price Booyoung Housing is known to have paid for the land over a decade ago. Seoul City had initially even considered issuing municipal bonds to secure funding for the land compensation.

The Hannam Neighborhood Park site is considered prime real estate north of the Han River. Spanning 28,197 square meters in the area of 670 Hannam-dong, Yongsan-gu, Seoul, it is located next to Hannam The Hill, which held the title of the nation's most expensive apartment complex for seven years starting in 2014, and is adjacent to Nine One Hannam, which has since succeeded it. While the government-assessed land price of the park site last year was around 6.07 million won per square meter, apartment prices in the area approach 200 million won per 3.3 square meters (pyeong). Booyoung Housing acquired approximately 97% of the project site's ownership in 2014 for residential development purposes.

The area was designated for park development as far back as the Japanese colonial period. The Japanese Government-General of Korea designated the areas of Hannam-dong, Bogwang-dong, and Itaewon-dong as general parks via a public notice in March 1940. Following liberation, the area was used as a base and barracks for U.S. Forces Korea, and remained as an empty lot after the U.S. military withdrew in 2015. Although the Ministry of Land, Infrastructure and Transport (then Ministry of Construction) determined the urban planning facility development plan for the current scale in April 1979, the site was eventually discussed as a candidate for de-designation after the government established guidelines for releasing long-term unimplemented urban planning facilities (sunset provision) in 2015.

The Hannam Neighborhood Park project took concrete shape 10 years ago. Despite arguments to scrap the park project, Seoul City decided on a development plan for the 28,197 square meter area of 677-1 Hannam-dong in September 2015 and notified the topographical map. In April 2020, after completing public viewings, the city approved the implementation plan for the urban planning facility project, which detailed the development plan that June. This implementation plan included provisions to expropriate and use the land owned by Booyoung Housing for the park.

Booyoung Housing filed a lawsuit in 2015 seeking to cancel the park development plan designation. While the first-instance court ruled in favor of the plaintiff, Booyoung Housing, the appellate court overturned the decision and ruled against them. Although Booyoung Housing immediately appealed, the Supreme Court dismissed the case in 2018, confirming the defeat. Undeterred, Booyoung Housing filed another lawsuit in 2020 seeking to invalidate the implementation plan approval that had detailed the park project. However, they lost in the first instance in April 2023, the second instance in November last year, and finally lost at the Supreme Court this past March.

Once the implementation plan for Hannam Neighborhood Park expires, Booyoung Housing will effectively achieve the same result as a victory. As the validity of the park development plan will disappear entirely, they will be able to re-examine the utilization of the site from scratch. Although Seoul City requested that Booyoung Housing submit a business plan for the site last year, it is reported that Booyoung Housing has not yet submitted any such proposal. A Booyoung Housing official commented cautiously, "Nothing specific regarding plans for the site has been finalized yet."