A hotel stuck in limbo

Building a hotel with a traditional Korean theme in Jangchung-dong, central Seoul, has been the center of Hotel Shilla’s expansion plan since 2012.

But the project has been caught in a regulatory and legal struggle from the start. Compounding the mess are contradictory signals from the central and Seoul city governments, which worry other players in the industry hoping to build hotels.

Last week, the Seoul Metropolitan Government once again nixed the hospitality and travel retail unit in the Samsung Group’s fourth application to expand, in this case by building a hotel in the style of hanok (a traditional Korean house) that includes a park and duty free shop, citing concerns about cultural heritage sites nearby.

The hotel operator said it addressed most of the suggestions the Seoul government made to an earlier proposal.

“We have amended the hotel project several times over the past years to clear the issues raised by the city government,” said a spokesman of the Hotel Shilla.

Located near the Fortress Wall of Seoul built in the Joseon Dynasty (1392-1910), the Jangchung-dong site that already houses the Shilla Hotel is designated as a special landscape area.

The city government demanded that any new hotel building blend in with the stone wall and surrounding landscape. It specifically rejected the height of the plan.

In the latest proposal, Shilla reduced the height and the number of floors from four floors to three, lowering the property’s highest point to 11.9 meters (39 feet) from a previous 15.9 meters. The operator also increased the distance from the fortress from 20.5 meters to 29.9 meters and revised the design.

Despite the rejection, Shilla said it has greater hopes for the next review.

“This is not a rejection of the plan,” the spokesman said, “The city government postponed the decision and we will keep cooperating with the officials to work out the issues.”

Shilla’s attempt to build a new hotel in the area dates to 2011 when it proposed a low-tier business hotel. It changed the plan to a traditional-themed hotel the following year since the regulations for those type of buildings is less strict. Hanok-style accommodation may also appeal to foreign tourists who want something exotic.

Approval was put off again in 2012 by the city government. Unfazed, Shilla tried again in 2013 with revised plans but the government again put off a decision.

The city government’s actions contrast with the Park Geun-hye administration’s desire to ease regulations on hotel developments, causing confusion in the industry.

The government announced that it will work toward relaxing regulations to allow tourist hotels to be built near schools, which has not been allowed in the past.

Under current laws, hotels are not allowed to be built within 200 meters (655 feet) of a school. The restriction is aimed at protecting children. But the Park administration maintains that unlike betting centers or motels, a high-end hotel is unlikely to harm the environment around a school.

The move will benefit Korean Air, which wants to build a luxury hotel near Gyeongbok Palace in central Seoul. The project was stalled because it was near a school.

The Federation of Korean Industries, the country’s largest business lobbying group, suggested last year that the government remove restrictions banning hotel construction near schools. Their call came as the tourism industry suffered from an outbreak of Middle East respiratory syndrome.

But civic groups voiced concerns. “The regulation is the border line to protect children from potential harmful effects,” said the Citizens’ Coalition for Economic Justice in a statement.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]