STORY OF GOVERNMENT
Part 1
Achieving the Dream of Acquiring Government Building
: From the opening to Pyeongchon government building
Fueling the motivation to come up with government building
Since the opening of the Korea Research Institute for Human Settlements (KRIHS) in 1978, the employees’
long lasting dream had been to come up with their own independent government building. However, without sufficient funds or adequate site, it was merely a dream. KRIHS started off from Geukdong Building in Toegye-ro, subsequently moving to Daejun Building in Gangnamdae-ro and then SBS Building in Yeouido before conceiving the thought of securing a government facility which was ther the Teacher’s Pension Building.
In 1988, Huh Jaeyoung, who was nominated as the 4th president, requested a meeting with me (Park Heonju), who was working at the President’s Office at the time, and Won Insik, the chief of administration. After being reported about the overall situation of KRIHS, President Huh wanted to know what the employees wanted the most. I said it was to get our own government building. After the inauguration ceremony, President Huh promised the employees that he will do his best to come up with the government building. We were all delighted, but it seemed like a vague hope. I learned later that the labor union also proposed having the independent
government building as KRIHS’ top priority, showing that the whole employees were united together in acquiring the government building.
As I thought about how we were going to get a site, and how we were going to raise tens of billions of wons for construction cost, I had a guilty conscience
that this might raise false hopes among the employees.
Fortunately, the newly appointed president had lots of experience in construction and real estate. He immediately contacted the government agencies to secure a site. After identifying that there was an appropriate site near the Government Complex in Chapter 5 STORY OF GOVERNMENT BUILDING
098 40-Year History of KRIHS
Completion Ceremony of KRIHS Pyeongchon government office building (1994. 4. 27)
Gwacheon, he made preparations to get it. Of course, it was not an easy job. Luckily, the government at the time had set up the plan to construct 2 million houses in order to resolve the serious housing problems, by constructing five new cities in the Seoul metropolitan area. KRIHS had played a leading role in carrying out this plan. We planned the Pyeongchon Newtown, with the Korea Land & Housing Corporation as the implementer. During the process of planning the newtown, we discussed with the Korea Land &
Housing Corporation to secure the site for KRIHS’
government building.
Constructed the Pyeongchon government building to make the dream come true
After securing the site in Pyeongchon Newtown, we promised to pay for the purchase of the site later, and we began to work towards achieving our dream of constructing our own government building. At the time, KRIHS’ entire fortune was only a total of 24 houses it received during its foundation, including Daechi-dong Eunma Apartment, Sincheon-dong Jangmi Apartment, Seocho-dong Woosung Apartment and Apgujeong-dong Hyundai Apartment, as well as the deposit of Yeouido government office. Even if we added up the entire fortune, it was far from enough to pay for the construction cost. The support fund that the government gave for the construction of the government building was a total of KRW 6.4 billion over a five year period. Even if we sold off all of the apartments we owned and added the government’s support fund, it was still not enough to pay for the construction cost. Then things turned around when the 5th President Lee Sangryong was appointed.
In order to come up with the lack of finance, he consulted with the Ministry of Construction &
Transportation and recieved KRW 4 billion of private contributions from four affiliated public enterprises (Korea National Housing Corporation,
Korea Land and Housing Corporation, Korea Water Resources Corporation, and Korea Expressway Corporation). It was under the condition of getting an advance payment on these public enterprises’
entrusted research projects for the next ten years.
The research projects for which we didn’t get paid with personnel expenses made it difficult to compile the working budget. For about 10 years, this kind of research works not only brought great difficulties to the researchers, but also to the entire organization.
It required the employee’s sacrifices, including pay cuts for employees and reduced welfare. In order to build the government building, all research had to be carried out with the minimum expenses.
After the government allocated contributions in constructing the government building, it called for the employees to share the burden, so that the President and the newly hired employees in 1994 all had a wage freeze. Therefore, you can say the Pyeongchon Government Building is a building built on the joys and sorrows of all employees.
We also had a difficult time securing financial resources for the government building. The total financing that we obtained was KRW 22.1 billion, including KRW 3.91 billion for selling the apartments, KRW 6.4 billion from government contributions, KRW 4 billion from private
contributions (KRW 1.3 billion from Korea Land Corporation, KRW 500 million from Korea Land &
Housing Corporation, KRW 700 million from Korea Water Resources Corporation, and KRW 1.5 billion from Korea Expressway Corporation), KRW 2.4 billion from rental deposit, KRW 4.8 billion from selling land, and KRW 637 million from retained earnings carried forward. The expenditures included KRW 5.62 billion for the purchase of the site, KRW 12.23 billion for construction costs, KRW 1.8 billion for electric construction, KRW 1.43 billion for government contribution material costs, KRW 214 million for design costs, KRW 225 million for construction supervision and contract commission, KRW 335 million for incoming construction costs, KRW 121 million for construction-related taxes, and KRW 101 million for land-related taxes. The design was done by Wondoshi Architects Group, the constructor by Tae Heung Construction &
Industrial, and the construction supervision by the Public Procurement Service. At the time, when a public enterprise built a new government building, there was a government ordered construction system so that all constructions ordering was done by the Public Procurement Service, and the construction supervision had to be dispatched and managed by the Public Procurement Service. Therefore, in Chapter 5 STORY OF GOVERNMENT BUILDING
100 40-Year History of KRIHS
case of an important decision made during the construction process, one person from the ordering organization was also available on the site. The current team leader of the new building management team, Lee Pansik, was hired at the time as the construction supervisor of the construction site.
Later, the employee in charge of the construction of incoming electricity and mechanical pipes also supervised the construction.
Due to lack of funds, the construction didn’t go smoothly. Even though the depositing concrete for the basement floor was completed, the completed amount wasn’t paid because of no financial resources. It almost brought the construction to a halt, but we promised that although the payment might be a little late, it will be made without any default. We asked for the constructor’s understanding to ensure the construction went on, and the constructor accepted this and we were able to finish frame construction with difficulty. Even then, we couldn’t pay for any of the completed portion of the construction, so the construction was stopped for a couple of days. After the supervisor from the Public Procurement Service persuaded the constructor, we were able to carry on with the construction. On April 26, 1994, the construction of the government building was completed. After that, we suffered from
failing to pay some of the cost of construction, but we partially borrowed from the retirement fund after much deliberation. Also, we sold some of KRIHS’
site in order to pay for the remainder. On April 26, 1994, we left the rented government office in Yeouido to move into the Pyeongchon government building and opened the era of Pyeongchon.
Ending the era of nomad for government building
Finally, on May 12, 1994, the opening ceremony of the Pyeongchon government building was held. At the time, President Lee Kunyoung, Vice Minister Ryu Sangyoul, former Minister Huh Jaeyoung, for mer President Rho Yunghee, and for mer President Kim Uiwon attended the ceremony, along with many guests from relevant authorities.
Afterwards, on July 13, 2007, the opening of the Road Policy Research Center took place, with the signboard hanging ceremony held with the President at the time, Choe Byungsun, and the Minister of Construction & Transportation at the time, Lee Chunhee, in attendance.
Something that could not be laughed at happened as well. About two months before the completion of the construction, the Space Arrangement Committee kept changing the partition so that the construction
didn’t run smoothly, and even though the actual measurement of the furniture had to be done before going into the new office, it could not be done due to the partition construction. As a result, there was a lack of time to produce furniture and it had to be done based on the initial floor plan. Afterwards, the partition construction was completed, but the furniture was bigger than the partition for the private room so that it had to be reconstructed after we moved there in order to place the furniture.
Before moving to the Pyeongchon government building, the Employee Association showed high expectations and hopes by saying that if we moved to the new place, there would be lots of welfare benefits since it was an independent government building. For instance, we would be able to save a considerate sum of money per person as the Employee Association’s fund, and we would get high-quality meal of around 8,000~10,000 won by paying just 2,500 won for lunch because we don’t have to pay rent for the cafeteria. However, it wasn’t long before employees were met with a sense of disenchantment. Not only was there no accumulated money, but also the food quality at the cafeteria did not meet our expectations. Nevertheless, we were pleased to have ended the era of nomad and to have settled in a government building.
Pyeongchon government building was the foundation of the government building in Sejong After I returned from studying abroad, a ten-story modern building in the middle of Pyeongchon welcomed me back. I was deeply moved by how I played a part in establishing this magnificent government building even though there was insufficient funds and without a single land.
At the time, the only national policy research institute that had their own independent government building was the Korea Development Institute.
All of the other national policy research institutes, including the Korea Rural Economic Institute, the Korea Transport Institute, and the Korea Institute of Public Finance, were using others’ building for free or at a low rental cost. During the Asian financial crisis, the Korea Institute of Public Finance purchased a building that came out at a cheap price with their reserve fund for building the government building, which was the only case of an institute trying to get their own government building. The Pyeongchon government building was an incident that showed KRIHS’ reserved strength at home and abroad. It would have been impossible without the 4th President Huh Jaeyoung’s wisdom and the employees’ devotion to building their own government building.
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With a drastic cut in government contributions due to the Asian financial crisis in 1997, we had to carry out entrusted research tasks from public enterprises under the Ministry of Construction &
Transportation without being paid for personnel expenses. Also, we had to continuously pay back the fund received to build the government building despite the difficult financial situation.
In 2003, I was appointed as the head of the Office of Planning and Coordination. 10 years have passed since we received the contributions from the public enterprises affiliated to the Ministry of Construction
& Transportation in order to build the government building. Most of it had been used to pay off the personnel expenses of our research. However, in the case of the Korea Expressway Corporation and the Korea Land & Housing Corporation, even though we had carried out researches without being paid with personnel expenses for 10 years, there were still unpaid amount remaining. In order to seek ways to resolve the financial difficulties in providing for the government building, I held individual meetings with the person in charge at each institution. We reached an agreement to write off debts we received to support building the government building by conducting one or two research tasks instead of carrying out several to suit the personnel expenses.
We still had to persuade the researchers, but we were able to resolve the issue. Looking back, I am grateful for their understanding on the issue.
In 2004, the Pyeongchon government building became the government building completely owned by KRIHS. Afterwards, we were able to conduct research by getting the full payment of personnel expenses from the public enterprise under the Ministry of Construction & Transportation, which improved the financial situation of KRIHS. Of course, it made the compilation of the working budget more flexible.
I would like to extend my appreciation to the former presidents of KRIHS and the employees in charge who worked hard for 16 years from 1988 to 2004 to construct the government building, as well as the researchers who worked hard in their position despite the difficult situation.
Thanks to all of the efforts put into the Pyeongchon government building, KRIHS has moved into the most outstanding government building in Sejong National Research Complex, which still serves to date as a clear demonstration of our united efforts.
Part 2
Opening the Era of Sejong
: Government building in Sejong
Relocation policy of public institutions to local areas is suggested
Since 2003, in order to achieve win-win development for the Seoul metropolitan area and local areas and a balanced national development, the Korean government has been focusing on the relocation policy of public institutions and central administrative organs located in the Seoul metropolitan area, including the construction of the administrative city and innovative cities. In 2005, 47.9% of the population was concentrated in the Seoul metropolitan area, which was only 11.8% of the national land area, with 85% of public institutions, 91% of the top 100 companies, 70% of venture companies, 57% of manufacturers and 67% of financial loans all concentrated there.
Like this, the economic gap with the provinces increased further because various economic activities were focused in the Seoul metropolitan area, including the private companies and public institutions that
act as the backbone of the national economy. Since 1960, the population in the Seoul metropolitan area continuously increased, which substantially increased after industrialization began in the 1970s when it was 28.3%. In 2004, it reached 47.9%.
The Roh Moohyun administration recognized the polarization of the territory due to the limitation of the growth strategy that focuses on inputting production factors like labor and capital, as well as the recession in the provinces and the overpopulation in the Seoul metropolitan area. In order to ease these problems, we implemented the relocation policy of public institutions as one of the major balanced national development policies in order to change from the single structure concentrated in the Seoul metropolitan area to a multi distributed structure. In April 2003, the participatory government inaugurated the Presidential Committee for Balanced National Development. In June 2003, the committee announced the three principles and the seven tasks Chapter 5 STORY OF GOVERNMENT BUILDING
104 40-Year History of KRIHS
for the balanced national development, and suggested the relocation policy of public institutions as one of the major national strategies.
Projects on relocation of public institutions
In 2004, the Korean government announced the roadmap with the basic principles and implementation directions of the relocation of public institutions, together with the enactment of the Special Act on Balanced National Development, which is the legal and institutional basis for the relocation of public institutions. According to the act, on May 25, 2005, the government announced the public institutions subject to the relocation through the report by the Land Infrastructure & Transport Committee. At the time, the nation had 410 public institutions across the nation. Among them, 346 institutions were located in the Seoul metropolitan area. The government classified 177 that were subject to relocate in the provinces. Later, 22 will be reclassified and assigned fairly by taking into consideration the connectivity with the regional strategic industry and the level of regional development by city and province.
In May 2005, the government and 12 cities and provinces signed the Basic Agreement Between Central and Local Governments. In June 2005, the deliberation of the cabinet meeting and the signing of
the Basic Agreement Between Labor and Government took place. On June 24, 2005, the announcement of the relocation of public institutions plan was made, including the designation plan of 176 public institutions by city and province, excluding those that put the decision of relocation on hold at the cabinet meeting, including the Institute for Unification Education. According to reports, the government used the principle of assigning public institutions subject to relocation by taking into consideration the efficiency, such as the conditions of the region. As a result, 14 research institutes belonging to the National Research Council for Economics, Humanities and Social Sciences, including the Institute for Unification Education, moved to Sejong City.
Sell off of the Pyeongchon government building After the approval of the relocation plan, according to Article 43 of the Special Act on Innovative Cities, the plan for handling the previous real estate has been submitted to the Minister of Land, Infrastructure and Transport within three months. Therefore, the plan for handling the previous real estate went through the resolution of the Sejong Relocation Committee, and on February 16, 2011, it was submitted to the National Research Council for Economics, Humanities and Social Sciences. After going through the Board of
Directors, it was submitted to the Ministry of Land, Infrastructure and Transport. It was approved by the Ministry of Land, Infrastructure and Transport to sell it off by the first half of 2011.
In order to move to Sejong City, KRIHS set up the Sejoing Relocation Committee to review overall matters including selling of the government office, design and construction of the new government building, construction supervision and welfare system.
First, the appraisal and assessment showed KRW 76.2 billion by the appraiser in order to sell off the Pyeongchon government building. We participated in the investment briefing five times to sell off the Pyeongchon government building, and we proceeded with competitive tendering process four times to the Korea Asset Management Corporation but failed to sell it. In order to move to Sejong City as soon as possible, KRIHS asked for the purchase of the Pyeongchon government building by the public institution that purchases the previous real estate, but we were notified that they had no intention of purchasing. On July 11, 2013, we reported the change in urban planning for the previous real estate at the 2nd Trade & Investment Promotion Meeting, and agreed to the alteration of use with Anyang City.
Anyang City requested KRW 2.54 billion in return for the rise in value from the alteration of use. After
deciding to change the use through consultation with Anyang City, the result of the appraisal by the appraiser was KRW 78.9 billion. Afterwards, we failed to sell it in three competitive tendering process. We held another competitive tendering after lowering the price by 5%, but could not sell it three more times.
Lastly, we lowered the price by 10% and held an open competition. It did not sell in the first round but we finally signed a contract in the second round on November 26, 2014.
Location of KRIHS (living zone 4-1)
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