Unhealthy competitionThere seems to be no end to the competition to build luxury offices among regional governments.
In one of the latest instances, Anyang in Gyeonggi recently announced an ambitious plan to build “the world’s best and tallest office.” The city said it would spend more than 2 trillion won ($1.7 billion) to build a 100-story skyscraper. Seongnam and Yongin cities, both in Gyeonggi, were criticized for building luxury offices, but their efforts pale in comparison to Anyang.
During a press conference, Anyang Mayor Lee Phil-woon said the city will break ground in 2014 and finish construction of the 100-story building by 2018. The building will house the city hall, the city council chambers, a business center, a convention center and a hotel as well as cultural areas and apartments, Lee said. To fund the development, the city will sell the apartments in the building.
Anyang intends to demolish its primary city administrative office, which stretches eight stories above ground and two floors underground. The building is 14 years old, and there aren’t any major problems with it. The 63.9 billion won used to build the existing structure will go to waste if the new building is constructed.
There are also questions about the feasibility of the project and whether there’s enough demand to sell the apartments. A 47-story apartment building in front of the current city hall, for instance, isn’t full at this time. It’s unrealistic to think that many residents in this small city of 610,000 people will be willing and able to invest in the project and buy the new apartments.
Lee said the building will generate 347 billion won in the first five years after it opens. However, this is nothing but a simple estimate of what a 100-story building would create.
Aside from these concerns, people are most suspicious of Lee’s real intentions. There is a regional election on June 2, and Lee’s current term is almost up. Some people have therefore openly questioned whether this is a project aimed at getting Lee re-elected.
Looking at the nature and size of the project, it is not appropriate to announce such a development at this time.
The heads of regional governments should compete in taking good care of the people they represent rather than competing for projects like building luxury offices. The central government should put the brakes on these types of projects by cutting the flow of tax money.