From the liberation of Korea to 1976, the policy on state-owned land has remained passive and limited to the sale-oriented policy for provision of financial demand. As the financial demand has become gradually more appropriate through taxation, the po...
From the liberation of Korea to 1976, the policy on state-owned land has remained passive and limited to the sale-oriented policy for provision of financial demand. As the financial demand has become gradually more appropriate through taxation, the policy was turned into the management of maintaining and preserving the land until 1993. Though the introduction of trust law in 1994 led to quite a trial to develop the state-owned land, all of them have been canceled due to business problem.
In 2004, the development of state-owned land started with three pilot projects of small-scale shopping malls and the consignment development of state-owned land was institutionalized through the revision of the State Property‘Act, by which the development of the Namdaemun Tax Office site was started on the state-owned land as the Nara Kiumjadong Building. Since then, as of the end of 19 years, 26 projects(953.2 billion won) were conducted and 25 projects(1793.2 billion won) are underway.
As a result of the increased development of consignment, LH Corporation was added to as a consignment developer with the existing the Korea Asset Management Corporation. In 2011, the development methods of the state-owned land were diversified by the introduction of fund development and private participation development. However, the development of consignment development and fund has not been activated though 9 years have passed since the institution was introduced.
This study indicates three improvements through the understanding of situational improvements and empirical studies on employees in the field of land development and investment.
First, because the general office is required to select private business operators of private participation development in the state property law, and further the construction plan, budget, and preliminary feasibility study of what to build in the project site are completed in advance, the workload on the officials in charge is considerable. Even worse, the public officials performing the work are not only performing the work but also performing many other policy tasks.
In addition, even if there is a good land to develop, it is difficult that the private sector can participate in and develop because the agency that will perform the actual administrative work is not specified in the State Property Act.
It is expected that the private participation development of the state-owned land will be more activated in practice if the grounds are set up to separately determine the institutions that will carry out the administrative affairs of the private participation development under the State Property Act.
Second, the structure of private participation is only PFV, which is possible under the State Property Act, so it is not enough to accommodate the needs of various investors.
In the case of private participation in foreign countries and local governments, various ways are being utilized according to the conditions of investors.
Therefore, in order to combine the characteristics of state land with those of private capital, the door should be open to more diverse financial structures.
In that way, if the State Property Act is revised so that a variety of vehicles such as REIT’s, REF, SPC are activated, various private participation will be possible.
Third, the long-term lease system, which is active in local governments or several advanced countries such as Japan and the United States, is only possible through the sale to PEV in private participation development under the State Property Act.
If special purpose companies such as PFV established for private participation are able to lease state land for a long time, it will be possible to provide an opportunity to revitalize private participation of state land.