The execution agreement for the Jamsil sports and convention (MICE) complex project (Jamsil MICE), which Seoul Mayor Oh Se-hoon has pushed as a flagship initiative, has been pushed into the new year. Oh has pursued developing Jamsil MICE, including turning the current Jamsil Baseball Stadium at the Jamsil Sports Complex into a domed stadium. The goal was to sign the execution agreement by the end of 2024, but negotiations with the Hanwha consortium, the preferred bidder for the private investment project, dragged on, pushing the execution agreement to next year. There is also a possibility the execution agreement will not be signed before the local elections in June next year. It has effectively been five years of talks since the Hanwha consortium was selected as the preferred bidder in 2021.
☞On May 14, our paper reported: "To build a Jamsil dome stadium 'twice the size of Gocheok Sky Dome,' project cost to rise 15%… Seoul city-Hanwha discuss 2.5 trillion won"
According to the Seoul Metropolitan Government and the preferred bidder Hanwha consortium on the 10th, the two sides are negotiating with the goal of signing the execution agreement for the Jamsil sports and MICE complex in the first half of next year. A Seoul city official said, "We are negotiating to sign the execution agreement in the first half of next year," and added, "The design changed as we are converting Jamsil Baseball Stadium into a dome, and construction costs also increased, which delayed the talks somewhat."
The project will build a convention facility three times the size of COEX in Samseong-dong, along with a baseball stadium and multi-purpose sports facilities, on a 357,576-square-meter site around Jamsil Sports Complex in Songpa District.
Centered on the Korea International Trade Association, a development concept emerged in Oct. 2016, and in Dec. 2021 a Hanwha consortium led by Hanwha Group (39% equity), including Hanwha's construction division, and HDC Holdings Co. (20%), was selected as the preferred bidder. The total project cost was presented at 2.1672 trillion won at the time. The consortium also included Hana Financial, Shinhan Bank, Jungheung Group, WOOMI Construction Co., and Kumho E&C, and it planned to operate for 40 years to recoup its investment.
However, Oh Se-hoon returned as Seoul mayor in the 2021 by-election and then won a fourth term in the following year's local elections, and as he vigorously pushed a plan to convert Jamsil Baseball Stadium into a domed stadium in consideration of requests from the baseball community, including the KBO, the negotiations entered a prolonged phase. Building a domed stadium requires a complete redesign and increases both construction costs and the construction period.
Oh proposed converting the current open-air Jamsil Baseball Stadium into a 76-meter domed stadium and increasing the number of seats from the current 25,000 to more than 30,000 (33,000–35,000). As a result, the project cost is expected to rise to 2.5 trillion won, about 15% higher than the initial plan. In Dec. 2023, the city announced interim agreement results reflecting these details and said it would complete the execution agreement by June 2024.
With negotiations taking longer than expected, there is a possibility the execution agreement will only be reached after the local elections in June next year. To sign the execution agreement, the Seoul city government and the Hanwha consortium must negotiate the project cost and then pass the Ministry of Economy and Finance's Private Investment Review Committee (PIRC). The PIRC is a committee that reviews and resolves major agenda items for public-private partnership (PPP) projects that build social overhead capital (SOC) such as roads, railways, and schools by attracting private capital. It conducts a final review of the project's feasibility and contract terms and decides whether to proceed. Because the review period varies widely by project, it is difficult to predict when the Jamsil MICE project's PIRC review will conclude.
A development industry official said, "Even if the Seoul mayor changes in the local elections, it will be difficult to halt the Jamsil MICE project," and added, "However, if the mayor changes as a result of the local elections, there is a possibility the new mayor will take credit for the outcome."
Seo Jin-hyeong, a professor in the department of real estate law at Kwangwoon University, said, "Because the Jamsil MICE project is a large-scale development project in the Jamsil area, the government should proceed after thoroughly reviewing the investment's validity, regardless of who becomes the Seoul mayor," and added, "If the government judges the city's project with political considerations, the development project could drift."