[Why&Next] "Government Guarantee First" vs. "Select Site First"... Gwacheon Racecourse Relocation at an Impasse
Relocate Gwacheon Racecourse to Build 8,000 Homes
Potential Legal Liability Over Revenue Declines Also an Obstacle
Talks Stall, Delaying Board Review of New-Site Solicitation Plan
The relocation of Seoul Racecourse Park (Gwacheon Racecourse), which the government is pursuing under its “Jan. 29 Housing Supply Measures,” is failing to gain momentum. The Korea Racing Authority (KRA) and the government remain at odds: the KRA wants the government to explicitly guarantee funding for the relocation, while the government wants to select a new site first. As a result, an agenda item setting out the criteria and schedule for soliciting proposals for a new site has not been brought before the KRA board.
A KRA labor union official said on Oct. 16, “The KRA board usually meets on the last Thursday of each month, which would be around Oct. 29 this month, but I haven’t heard that an agenda item on soliciting proposals for a new site will be brought forward. We are consulting with relevant ministries, including the Ministry of Economy and Finance and the Ministry of the Interior and Safety, led by the Ministry of Agriculture, Food and Rural Affairs, but we have yet to conclude discussions on funding for the relocation.”
On Jan. 29 this year, the government announced its “Plan to Expand and Expedite Urban Housing Supply,” which calls for building 9,800 homes using the sites of Gwacheon Racecourse and the Defense Counterintelligence Command. It said 8,000 homes and 1,800 homes would be built on the respective sites after the racecourse and the command are relocated. In June this year, the KRA drew up and submitted to the government a “Review Plan for the Sustainable Development of the Horse Industry and the Relocation of Seoul Racecourse Park.” The KRA estimates that relocating Gwacheon Racecourse will require at least 2 trillion 387.9 billion won and has sought measures to secure funding, including a 50% reduction in the leisure tax, abolition of the local education tax, and an increase in the limit on horse-race betting purchases.
However, the Ministry of Agriculture, Food and Rural Affairs has only agreed to raise the horse-race betting purchase limit from 100,000 won to 200,000 won and allow remote registration for electronic betting tickets. Measures such as reducing the leisure tax and lowering tax rates remain blocked by opposition from other ministries. An official from the ministry said, “We are continuing discussions with the relevant ministries, led by the Office for Government Policy Coordination. I cannot provide details yet, but we have narrowed some of our differences.”
Another point of contention is whether the government will guarantee its support. As a precondition for proceeding with the relocation, the KRA says that “the government requesting the relocation must cover all associated costs” and has asked the government to guarantee its support. The Ministry of Agriculture, Food and Rural Affairs, meanwhile, wants to begin soliciting proposals for a new site first, arguing that the existing site must be appraised after a new site is selected so that the difference in value—and thus the relocation cost—can be calculated.
The KRA is asking the government to explicitly pledge funding for the relocation because of potential legal liability down the road. A union official said, “After the relocation support plan is finalized, it will take at least 16 years and nine months to solicit proposals for a new site and build a racecourse there. The KRA will inevitably bear full responsibility for charges such as breach of trust and claims for damages resulting from a decline in revenue during that period.”
At a recent meeting with KRA board members, Minister of Agriculture, Food and Rural Affairs Song Miryeong reportedly said, “I understand the concerns and anxiety about legal liability. I will do my utmost to ensure the KRA can develop and relocate in a stable manner without hesitating to make decisions because of legal liability.” In response, the board has asked the ministry to “spell out specifically what it can do.”
Hot Picks Today
'Big Investor' NPS Has Already Cut Its Losses... Sold Department Store Stocks in Q3 Despite Strong Earnings Outlook
- "There's a Drink Like This?"... Chinese Beverage With "Korean" in Its Name Rakes in 85 Million Won in Monthly Sales
- "Bump," Then "My Phone's Broken"... Man in His 20s Arrested for Scamming 22 Million Won in Repair Costs
- "I Put in 10 Million Won, but Only 2 Million Won Is Left" ... 77% Plunge Leaves Retail Investors in Samsung Electronics and SK hynix Leveraged ETFs Crying Out
- "The leggings are all see-through. It's so embarrassing to look at," complaints prompt Lululemon to fire development staff.
Park Geunmun, head of the KRA labor union, said, “Even discussions between the relevant ministries on tax support and other measures have yet to make progress, but the government is simply telling the KRA to proceed with soliciting proposals unilaterally. The KRA has asked the government to guarantee its support, but the government keeps repeating, ‘Trust us.’ In the end, that is no different from telling the KRA it will have to bear the responsibility later.”
© The Asia Business Daily. All rights reserved. Unauthorized AI training and use prohibited.
