Exclusive
Groundbreaking for Gyeongpo Olympic County, involving Mona Yongpyong, delayed for the second year

[비즈한국] It has been confirmed that the scheduled groundbreaking date for the Gyeongpo Olympic County, planned to be built in Gangneung, Gangwon State, has been postponed. Gyeongpo Olympic County is one of the Winter Olympic Special Zone projects, involving the construction of a large-scale accommodation facility with 4 underground floors, 22 above-ground floors, and 581 rooms. It is being developed as a private project and was initially scheduled to begin construction in early 2024.

The project developer for Gyeongpo Olympic County is the special purpose company (SPC) Gyeongpo Olympic County Co., Ltd. Three companies are participating in Gyeongpo Olympic County Co., Ltd.: Mona Yongpyong070960, UM6, and Stamm & Co. Among them, Mona Yongpyong is the largest shareholder, holding 62.10% (including preferred shares) of Gyeongpo Olympic County Co., Ltd. The ownership stakes of UM6 and Stamm & Co. in the company are 21.18% and 16.72%, respectively.

Contrary to the initial plan, construction for Gyeongpo Olympic County has not yet begun. A Gangneung City official stated, “The delay is continuing due to the real estate market downturn and financial difficulties,” adding, “The developer currently expects construction to start in the first half of 2026.”

The problem is that there is no guarantee the financial difficulties will be resolved by next year. According to the audit report, as of the end of last year, the total capital of Gyeongpo Olympic County Co., Ltd. was minus (-) 2.25757 billion KRW, indicating a state of complete capital impairment. It is also difficult to consider the finances of Mona Yongpyong, the largest contributor to the SPC, as robust. As of the end of last year, the total liabilities of Gyeongpo Olympic County Co., Ltd. stood at 67.7 billion KRW, while Mona Yongpyong’s current cash and cash equivalents are around 40 billion KRW.

However, Gyeongpo Olympic County Co., Ltd. stated that funding is not the issue. A representative for the company explained that the reason for the delay is “not due to a lack of funds,” while adding, “It is difficult to disclose the specific details to the public.”

Even if Gyeongpo Olympic County is completed, profitability is not guaranteed. According to the Korea Tourism Organization’s DataLab, the number of tourists visiting Gangneung was: 31,213,630 in 2020; 30,439,048 in 2021; 35,738,924 in 2022; 34,210,099 in 2023; and 33,233,340 in 2024. The number of tourists in Gangneung has been on a decline since 2022. Given the COVID-19 pandemic in 2020-2021, it is difficult to consider the increase in visitors in 2022 as significant.

Another variable is the recent proposal of a ‘Unification Church Special Investigation Act’ in the National Assembly. With allegations that the Unification Church provided bribes to certain politicians, some in the political sphere have even mentioned the potential dissolution of the Unification Church. The largest shareholder of Mona Yongpyong is the Unification Foundation (Foundation for the Support of the Holy Spirit Association for the Unification of World Christianity).

However, because Mona Yongpyong is not directly related to the bribery allegations and the Unification Church is not directly participating in the Gyeongpo Olympic County project, the atmosphere in Gangneung City suggests that the impact on the project will be minimal.

The Gangneung Winter Olympic Special Zone project is an initiative launched following the 2018 PyeongChang Winter Olympics to build large-scale cultural and accommodation facilities across two special zones and five project districts in Gangneung. As part of this, the 5-star hotel Shilla Monogram Gangneung was opened.