The execution agreement for the Jamsil sports and exhibition-convention (MICE) complex project (Jamsil MICE), which Seoul Mayor Oh Se-hoon has pushed as a flagship initiative, has been delayed into the new year. Oh has pursued the Jamsil MICE development, including turning the current Jamsil Baseball Stadium at the Jamsil Sports Complex into a domed stadium. The goal had been to sign the execution agreement by the end of 2024, but negotiations with the Hanwha consortium, the preferred bidder for the private investment project, have dragged on, pushing the agreement into next year. There is also a chance the execution agreement will not be signed before the local elections in June next year. It will be the fifth year of negotiations since the Hanwha consortium was selected as the preferred bidder in 2021.
☞Our May 14 article "Twice the size of Gocheok Sky Dome" to build a Jamsil domed stadium, project cost to rise 15%… Seoul city-Hanwha in talks over 2.5 trillion won
According to the Seoul Metropolitan Government and the Hanwha consortium, the preferred bidder, on the 10th, the two sides are negotiating with the goal of signing the execution agreement related to creating 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, "As Jamsil Baseball Stadium is being converted into a dome, the design has changed, and construction costs have increased, which has slowed the negotiations somewhat."
The project aims to 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-gu.
Led by 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 at the time was presented as 2.1672 trillion won. The consortium also included Hana Financial Group, Shinhan Bank, Jungheung Group, WOOMI Construction Co., and Kumho Engineering & Construction, 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 won a fourth term in the following year's local election, strongly pushing a plan to convert Jamsil Baseball Stadium into a domed stadium, sending the talks into a prolonged phase. Building a domed stadium requires a full overhaul of the existing design, as well as increased construction costs and a longer construction period.
Oh has proposed converting the open-air Jamsil Baseball Stadium into a 76-meter domed stadium and increasing seating from the current 25,000 to more than 30,000 (33,000–35,000). As a result, the project cost is expected to rise by about 15% from the initial plan to 2.5 trillion won. In Dec. 2023, the city announced an interim agreement on this plan and said it would complete the execution agreement by June 2024.
As talks have stretched longer than expected, there is a possibility the execution agreement will be reached only after the local elections in June next year. To sign the execution agreement, the Seoul Metropolitan 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 deliberates and decides on key agenda items of 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 to decide 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 be completed.
An industry source said, "Even if the Seoul mayor changes in the local elections, it will be difficult to halt the Jamsil MICE project," adding, "However, if the election results change the mayor, there is a possibility the credit for the project will be taken by the new mayor."
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 in the Jamsil area, the government should carefully review the investment feasibility and push ahead regardless of who becomes Seoul mayor," and added, "If the government weighs political considerations in judging the city's project, the development could drift."