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Hyundai Motor offers W1.7 tln to city for headquarters construction
By KH디지털2Published : June 23, 2015 - 10:30
Hyundai Motor Group, the world's fifth largest auto-making giant, said Tuesday that it has offered to pay about 1.7 trillion won ($1.54 billion) in public contribution to the Seoul city government in connection with the construction of a 115-story new headquarters building.
In September, the parent group of Hyundai Motor Co. and Kia Motors Corp. purchased the 79,345-square-meter piece of real estate that previously housed the main headquarters of state-run Korea Electric Power Corp. in Gangnam, the wealthy southern part of Seoul.
The purchasing price for the land, estimated at 10.55 trillion won, was close to triple its appraised value, drawing flak that Hyundai spent too much on the site. The group earlier said that it will invest a total of 49.1 trillion won in building the headquarters and other facilities over the next four years.
On June 11, the auto giant submitted detailed development plans for the project to the city government that proposed constructing a 115-story headquarters building.
The 571-meter building will be made up of offices, a convention center, hotel and shopping area.
The group also offered to pay 1.7 trillion won in public contribution to the city government on condition that the city changes the use of the land site from "residential" to "commercial," a major process needed to get the construction project off the ground.
Builders here are required to contribute a certain amount of funds to a municipal government to carry out construction in return for requesting cooperation and deregulation, a practice partly aimed at sharing development profits with the public.
Based on the offer, the city and the group will hold negotiations to finalize the contribution ratio.
Market watchers expect that the two will wrap up their talks within this year and complete all necessary permit and documentation procedures by the end of next year. Construction is expected to start in early 2017.
"A fast completion of development of the KEPCO site is expected to boost other private and public projects in its neighborhood," a city official said.
"To help create jobs and economic growth, we will actively cooperate with Hyundai Motor Group and carry out the related administrative and negotiation process in the most effective manner," he added.
Hyundai Motor Group said that the new headquarters building will have the production inducement effect worth 262.6 trillion won and help create 1.32 million jobs over the next 20 years. (Yonhap)
In September, the parent group of Hyundai Motor Co. and Kia Motors Corp. purchased the 79,345-square-meter piece of real estate that previously housed the main headquarters of state-run Korea Electric Power Corp. in Gangnam, the wealthy southern part of Seoul.
The purchasing price for the land, estimated at 10.55 trillion won, was close to triple its appraised value, drawing flak that Hyundai spent too much on the site. The group earlier said that it will invest a total of 49.1 trillion won in building the headquarters and other facilities over the next four years.
On June 11, the auto giant submitted detailed development plans for the project to the city government that proposed constructing a 115-story headquarters building.
The 571-meter building will be made up of offices, a convention center, hotel and shopping area.
The group also offered to pay 1.7 trillion won in public contribution to the city government on condition that the city changes the use of the land site from "residential" to "commercial," a major process needed to get the construction project off the ground.
Builders here are required to contribute a certain amount of funds to a municipal government to carry out construction in return for requesting cooperation and deregulation, a practice partly aimed at sharing development profits with the public.
Based on the offer, the city and the group will hold negotiations to finalize the contribution ratio.
Market watchers expect that the two will wrap up their talks within this year and complete all necessary permit and documentation procedures by the end of next year. Construction is expected to start in early 2017.
"A fast completion of development of the KEPCO site is expected to boost other private and public projects in its neighborhood," a city official said.
"To help create jobs and economic growth, we will actively cooperate with Hyundai Motor Group and carry out the related administrative and negotiation process in the most effective manner," he added.
Hyundai Motor Group said that the new headquarters building will have the production inducement effect worth 262.6 trillion won and help create 1.32 million jobs over the next 20 years. (Yonhap)
