Lotte Department Store Gwangbok reopens after agreement

Industry

Published: 02 Jun. 2022, 17:36

Lotte Department Store Gwangbok reopens after agreement

From left: Lotte Shopping CEO Jung Jun-ho, Busan Mayor Park Heong-joon and Lotte Corporation CEO Song Yong-dok pose for a photo after signing a memorandum of understanding Thursday at Busan City Hall. [BUSAN METROPOLITAN CITY]

Lotte Department Store’s Gwangbok branch reopened its doors Thursday after being closed for a day, with the company promising make good on obligations dating back more than a decade.

The branch, located in Busan, was operating under a one-year temporary permit from the city government that was extended every year since 2009. It had to temporarily close Wednesday because this year's extension was rejected.

The city of Busan rejected the extension due to Lotte Shopping, which runs Lotte Department Store, not showing progress in the construction of a 107-story Lotte Tower. It had promised to build a Lotte Tower near the department store when it bought the 195,690-square-meter (2.1-million-square-feet) plot of land in 1995.

On Thursday, a temporary four-month extension to operate the Gwangbok branch was given by the city of Busan under the condition that Lotte Shopping makes progress on the construction plan.

Lotte Department Store's Gwangbok branch in Busan. [YONHAP]

Lotte Shopping will be able to operate the department store until Sept. 30, and will have to get another extension before the four-month period ends.

In exchange for the permit, the city of Busan, Lotte Corporation — which owns 40 percent of Lotte Shopping — and Lotte Shopping signed a memorandum of understanding on Thursday.

Under the terms of the agreement, Lotte Shopping promised to build Lotte Tower in Busan by end of 2025, a year earlier than the original goal of 2026. Busan-based companies will be prioritized when choosing contractors to build the venue, and signatories will help Busan host the World Expo 2030.

Lotte Shopping started the construction of the Lotte Tower in Busan in 2013, but construction has been halted. The company wanted to allocate a part of the tower for residential unit to improve profitability through rent, but met opposition from civic groups.

“Many citizens are waiting for the construction of Lotte Tower to be carried out, which has been pending for some 20 years,” said Busan mayor Park Heong-joon. “We want to express our gratitude to Lotte, which reassured us of its strong intent to complete the construction of Lotte Tower in Busan.”

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]