Gyeonggi-do, extremely strong in financial crisis... Review of ‘Sale of Gwanggyo Government Complex’

Gyeonggi Province is considering the ultimate solution of selling the government building to overcome the financial crisis.

Although it is still at the level of internal review, it is extremely rare for local governments to sell their government buildings to overcome financial difficulties, so attention is focused on whether this will lead to the decision to actually put the provincial government building up for sale on the market.

According to Yonhap News coverage on the 9th, Gyeonggi Province recently planned a plan to secure available resources by selling the Gwanggyo Government Complex and began basic research.

The sale target that Gyeonggi Province has in mind is land and buildings owned by the province, including the provincial government building and parking lot in Gyeonggi Convergence Town, 30 Docheong-ro, Yeongtong-gu, Suwon.

The property price (standard price) considering the publicly announced land price and the standard market price of the building is estimated to be approximately 290 billion won.

The estimated appraisal value, which is usually 2.5 to 3 times the standard price, is estimated to range from a minimum of 720 billion won to a maximum of 870 billion won.

It has been reported that if the sale actually goes through, it could be traded for up to 1 trillion won due to premiums such as its core location in Gwanggyo New Town and revitalization of surrounding commercial districts.

Gyeonggi Province believes that selling the government building is the only way to secure this amount of financial resources in a relatively short period of time.

Accordingly, a review of laws such as the Public Property and Goods Management Act has begun.

It is known that once the sale is made, a plan to move into the Gwanggyo government building as a lease and pay rent is also being discussed.

However, it is unclear whether the sale plan will be put into practice because several procedures, such as approval from the provincial council regarding changes to the public property management plan, must be completed, and there is no precedent for selling a key building.

In particular, in the case of Gyeonggi Province, less than five years have passed since the relocation from the old building in Hyowon-ro, Paldal-gu, Suwon-si, was completed on May 29, 2022, so the fact that the province is considering the sale itself is expected to cause controversy both internally and externally.

An official from Gyeonggi Province took a cautious stance, saying, “It is true that it is being considered as one of various ways to secure finances, but it has not yet been confirmed and a specific sale plan has not been established.”

Gyeonggi Province is facing a serious financial crisis, with accumulated debt exceeding 7 trillion won due to a sharp decline in local tax revenue and the subsequent issuance of local bonds and fund borrowing.

Accordingly, Governor Choo Mi-ae declared a 'fiscal emergency' on August 5, about a month after taking office, and is carrying out intensive expenditure restructuring along with expanding revenue from various angles.