2023-12-31 05:01:02
Eunpyeong Daejo District 1, the biggest redevelopment area in Gangbuk
Hyundai Engineering & Construction “Completely suspend construction from January 1”
22% of the construction fee is not being received.
Due to internal strife in the union, the union president position is vacant and negotiations are not possible.
Union members take action due to rapid increase in delay costs
Enlarge photo The redevelopment site in Daejo District 1, Eunpyeong-gu, where construction has been suspended since January. Senior Reporter Seo Chan-dong
“Construction has continued for the past year without receiving construction costs, but it is difficult to proceed any further.”
The large-scale redevelopment project in Gangbuk, Seoul suffered the disgrace of having its construction halted for the first time in the new year. Although the structural work is already in full swing, the construction fee cannot be paid due to internal conflict within the union. As the construction company has announced that construction will be suspended from January 1, concerns are growing that the burden on union members, including moving costs, may increase significantly.
Daejo District 1 (Hillstate Mediale), Eunpyeong-gu, which I visited on the 28th, was a 10-minute walk from Bulgwang Station. About 10 tower cranes were still in operation, but the on-site brokerage office was deserted with few people visiting.
An official at a real estate agency said, “As general sales continue to be delayed, investor interest is waning and the burden on union members is increasing,” and “Currently, union members are unable to predict when general sales will be possible.”
Daejo District 1 is a large-scale redevelopment project that will build a total of 2,451 households in 28 buildings with a maximum height of 25 stories. Of these, 483 households, excluding 1,500 households for union members, are sold to the general public, and 368 households are provided for lease.
If you look at the location, it is excellent in the northwestern part of Seoul. Right next to Daeun Elementary School is the ‘Chopoomah’ complex, and the Miseong Apartments across the street are undergoing reconstruction. In addition, Seoul Innovation Park near Bulgwang Station is scheduled to be developed by the Seoul Metropolitan Government as a commercial, office, and residential complex, and GTX-A Yeonsinnae Station, scheduled to open at the end of 2024, is also within walking distance.
Hyundai Engineering & Construction began construction in October 2022, and the progress rate has already exceeded 20%. However, not even a portion of the invested cost of 180 billion won (total construction cost of 580.7 billion won) was received, increasing the burden on the construction company.
An official from a construction company said, “In addition to the construction cost, the cooperative also provides a joint guarantee of 300 billion won for the project cost borrowed from financial institutions, so if construction is stopped, we are also victims.”
Enlarge photo The redevelopment site in Daejo District 1, Eunpyeong-gu, where construction has been suspended since January. Senior Reporter Seo Chan-dong
Daejo District 1 has a different character from other business sites where construction was halted due to ‘construction cost conflicts’. It is said that the project has been delayed since the beginning due to internal conflicts in the union, such as the adoption of finishing materials.
After the union’s former executives were suspended from carrying out their duties due to a lawsuit last February, the acting president of the union attempted to proceed on his behalf, but the court issued a preliminary injunction to suspend this, leaving the executive branch virtually empty.
For this reason, Hyundai Engineering & Construction plans to completely stop construction from January 1 and exercise lien rights to prevent third parties from stepping forward.
A Hyundai Engineering & Construction official said, “The absence of the union’s executive branch continues, so there is no subject to discuss,” adding, “Currently, it is impossible to schedule a sale or proceed with the business normally to secure project finances.”
As work sites suspend construction starting from the first day of the new year, the maintenance industry is concerned that the maintenance business will further slump.
Dunchon Jugong, whose construction was halted in April 2022 due to a conflict between the contractor and the construction cost, resumed construction in October 6 months later. However, the move-in period was delayed by regarding two years, and the construction cost increased by more than 1 trillion won, increasing the burden on union members.
Fortunately, the sales of Dunchon Jugong were closed early, but the business feasibility of Daejo District 1 is lower than that of Dunchon Jugong and the sales market is frozen, so the sales results cannot be optimistic.
An official from the Daejo District 1 union said, “We are in a frustrating situation as the compensation for delay in construction costs continues to increase due to the union members not being able to make member contracts or general sales,” and added, “We are working hard to hold another general meeting as soon as possible and form an executive branch.”
An official in the maintenance industry said, “The Dunchon construction work was stopped when the process was 52% complete, which put a greater burden on the construction team.” He added, “Hyundai Engineering & Construction took action to prevent damage from long-term construction interruptions like the Dunchon construction incident last year.” “It was analyzed.”
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