Incheon Free Economic Zone Authority seeks to buy land in Golden Harbor

Golden Harbor Project Background [Image captured from Incheon Port Authority]

The Incheon Free Economic Zone Authority (IFEZA) submitted a letter of intent to the Incheon Port Authority (IPA) to purchase the entire 11 lots of land in the Golden Harbor in Songdo International Business District due to the lack of sites to attract investments in the area.

The IFEZA submitted the intent on March 27 to purchase the 427,000 square meter land in consideration of the lack of sites to attract investments in Songdo, which was built on reclaimed land along Incheon‘s waterfront west of Seoul, according to IPA on Tuesday.

The IFEZA plans to draw up a supplementary budget in the second half of this year to first purchase two lots of land in the Golden Harbor, which covers 99,000 square meters. It plans to purchase the remaining nine plots in stages. The total cost of purchasing the land is estimated to be 1.1 trillion won ($833.93 million).

It remains to be seen whether the IFEZA’s plan can be materialized, however. In order for the authority to purchase land, it has to go through a review by the Incheon Metropolitan Government and a resolution by the Incheon Metropolitan Council, but it is difficult to remain optimistic about the outcome.

“The IFEZA is said to be pushing to purchase land worth 1 trillion won, but we have not received any reports regarding that,” said Jeong Hae-gwon, chairman of the Industry and Economy Committee of the Incheon Metropolitan Council, who is in charge of the IFEZA.

Insiders at the Incheon Metropolitan Government point out that purchasing the Golden Harbor site, which is subject to facility transfer and lease regulations under the Harbor Act, requires a careful preliminary review of the feasibility of development. There are even calls within the port authority that the land owner should carefully examine whether IFEZA can afford to purchase the land.

IPA plans to engage actively in land sale consultations with the IFEZA to repay its debts worth 1.3 trillion won. “In 2018, the IFEZA tried to buy an 825,000 square meter complex in northern Incheon owned by IPA for 220 billion won, but failed to get approval from the city council,” a port authority official saidl. “So, we plan to prepare for a public offering for investors as well to remove potential risks.”

IPA initially planned to develop the Golden Harbor site, which was created in February 2020 as a marine tourist attraction by hosting hotels, shopping malls and resorts, but failed to attract investments for more than three years due to port facility regulations. Currently, the process of revising related laws is underway to improve regulations, but the timing of completion has not been confirmed.