Incheon set to take back land sold in a 2012 deal

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Incheon set to take back land sold in a 2012 deal

The Incheon Metropolitan City Government announced that it plans to repurchase land previously sold to a private company.

The city government announced on Thursday that it is determined to take back part of the land the regional government sold in 2012 to a Kyobo Securities consortium.

The return will reportedly cost 590 billion won ($490 million), which includes 72 billion won in interest. The buyback will be made by Sept. 7.

The city government and the company made the deal in 2012, when Kyobo Securities bought three blocks called A1, A3 and R1 in the sixth and eighth construction areas in the Songdo International Business District.

The agreement was made based on the rule that, after striking a deal, the land buyer could still return the land to the original seller. In such cases, the seller would be required to pay the principal at a high interest rate.

In the 2012 deal, Kyobo paid about 850 billion won for the blocks on that condition.

With the Incheon Asian Games two years off, the municipal government was struggling financially at the time, having had 440 billion won seized by the bank.

According to the city government, the return includes A1 and R1, as construction is already under way in the A3 area.

The company reportedly decided to return the land after the city government refused its rezoning demand and rejected increasing the number of households in new apartment buildings slated to be built in A1 and R1.

In March, the city government increased the number of households in the A3 area from 2,180 to 2,708.

Following Thursday’s announcement, all the deals made by the city government and the Incheon Development and Tourism Corporation (IDTC) on the same condition fell through.

Still, the city government said it will benefit once it sells A1 and R1 to the IDTC.

The IDTC will seek a land trust company to take the areas.

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