The Seoul city government decided not to allow an upgrade of the land use zoning for Hyundai Department Store's Apgujeong main store. Hyundai Department Store had planned to change the third-class general residential zone to a quasi-residential zone and expand the Apgujeong main store building. If it becomes a quasi-residential zone, the floor area ratio increases, allowing the building to be built higher.
According to the Seoul city government on the 29th, deliberation on the "detailed development plan decision for Special Planning Zone 7 (Hyundai Department Store) within the Apgujeong apartment district" was put on hold at the Urban Architecture Joint Committee held in Dec. last year. A Seoul city official said, "When drafting a district unit plan, we set uses for each parcel of land, and the Hyundai Department Store site within the Apgujeong apartment district was designated as a third-class general residential zone and a special planning zone," adding, "The committee determined there was little reason to change the zoning while breaking existing planning guidelines."
The Hyundai Department Store site is located around 429 Apgujeong-dong, Gangnam-gu, and covers 10,473 square meters. In a third-class general residential zone, large commercial facilities with a total floor area exceeding 2,000 square meters cannot be built, but the city applied an exception when creating the district unit plan.
Hyundai Department Store moved to upgrade the zoning because, as reconstruction of the Apgujeong apartment complex accelerates, the need for development such as reconstruction and expansion is increasing. Apgujeong Zone 2 (Shin-Hyundai phases 9, 11 and 12), which abuts the Apgujeong main store, is set to be transformed into apartments up to 65 stories with a total of 2,571 households. Reconstruction is underway in all the remaining zones as well.
If the zoning is upgraded, the floor area ratio is eased, making it possible to expand the building. The legal maximum floor area ratio for a third-class general residential zone is 250%, but it rises to 400% if it becomes a quasi-residential zone. Hyundai Department Store is said to have submitted to the city a plan to expand the building applying a floor area ratio of around 400%. Applying a 400% floor area ratio and a 50% building coverage ratio would allow the number of floors to be raised to eight. The current maximum is five floors. This area is designated as a scenic corridor specialized landscape district.
However, with the city's disapproval making a zoning upgrade difficult, a change to the reconstruction plan for Hyundai Department Store's Apgujeong main store has become inevitable. The key issue appears to be public contributions. Public contributions refer to setting aside part of the revenue from redevelopment or reconstruction for the public, such as building roads and parks or paying equivalent cash. Under the Seoul city local government ordinance, even for buildings within a scenic corridor specialized landscape district, expansions up to eight stories are possible if, after review by the Architecture Committee or Landscape Committee, they are deemed to meet urban landscape, aesthetics and public interest. Hyundai Department Store said it would make a contributed acceptance of 7.5 billion won for road construction and 122.8 billion won for building installation and provision, but the city recommended reconsideration.
A real estate development industry official said, "A quasi-residential zone allows for mixed-use near stations, officetels and shopping areas, so it has higher commercial utility and the land price is more expensive," adding, "From a long-term perspective, a quasi-residential zone is considered far more useful for complex development, which is why they appear to have pursued a zoning change."