Cutting-edge knowledge industrial center constructed with private funding expected to lead restructuring/full-scale renovation of and become a landmark in an aging industrial complex
Daegu Metropolitan City (DMC) gained a contract for a private knowledge industrial center (KIC) worth KRW 900 billion (size: 27 floors, 4 buildings) for the objective of transforming Seongseo Industrial Complex into an innovative place where people want to work, have fun, or relax. Plans are underway to cultivate the KIC into a hub of Korea’s innovation industry and use it to accelerate large-scale renovation of existing aging structures in Seongseo Industrial Complex.
The new KIC will be constructed in Seongseo 3rd Industrial Complex at the former site of Heesung Electronics’ Factory 1. Under the motto “landmark knowledge industrial center that meets all business needs,” a budget of KRW 900 billion will be invested to construct a group of four buildings with a total floor area of (approx.) 280,000 square meters and each with two underground floors and 27 ground floors. They will house diverse facilities other than manufacturing companies (e.g. work/cultural/convenience spaces, studio apartments) in a creative layout/design, with over 5,000 people employed by 700 companies. After obtaining the necessary permits and completing the blueprint this year, construction is slated to begin in late 2024 and be completed by 2028.
The KIC will be a cluster that is at the forefront of inter-industrial endeavors and Korea’s future innovation-related industries. Another benefit is the provision of a sophisticated and trend-sensitive work environment, which is expected to be popular with young workers. Ultimately, it will serve as a “landmark zone” that merges industrial and urban functions in an attractive way: namely, by serving as a workspace during the day and source of culture, entertainment, and everyday conveniences in the evenings and weekends.
DMC will be providing administrative support to ensure that the private investment is processed in a timely manner. Attention will be given especially to properly managing the KIC an example of successful private investment and sign contracts for follow-up projects. All of these efforts aim to rid Seongseo Industrial Complex of its image as an aging compound while making it youth-friendly and city-friendly to make it, once again, a leading player of the local economy.
The investor, Sina Inc., has previously brought about the construction of KICs in Seoul/Gyeonggi-do, Busan and Daejeon, after which it succeeded in gaining (voluntary) follow-up investment from the private sector.
According to Sina, KICs in Seoul/Gyeonggi-do play a vital role in creating jobs for young people and integrating new industries, while those in Daegu are largely failing to be revitalized because they cannot keep up with demands for technological expertise and other needs of the local community. Currently, in Daegu, supply is adequately meeting demand for KICs.
※ Of 1,464 KICs nationwide, 1,143 (78%) are in the Seoul/Gyeonggi area, 62 (4.2%) in Busan, and 35 (2.3%) in Daegu. (source: Korea Industrial Complex Corporation, Dec. 2022)
Thus far, Seongseo Industrial Complex had the undeniable merit of job-housing proximity due to its presence in the city. Once it start to age, however, a vicious cycle began of decreased corporate competitiveness, avoidance by young workers, and lack of office space for startups due to costly rent. Based on a growing number of voices on the need to re-design it to be conducive to future industries, then-mayoral candidate Hong Joon-pyo pledged the reconstruction of aging urban industrial complexes with a focus on high-density, multi-lateral development.
To draw more private investments, DMC will be posting a call for blueprints by December on designing the lot as a multi-purpose (as opposed to industrial facility) lot. It is also working on amending the relevant ordinance on re-investment of development profit so that the burden is not excessively allocated to the private investor.
Ahn Jung-gon, head of DMC’s Economic Affairs Division, said, “The KIC will address the many problems that Daegu’s aging urban industrial complexes are prone to as well as improve the competitive edge of our city. We hope to significantly step up voluntary and creative investments from the private sector as preparation for the future of industry and transformation of Daegu into a place where the industrial and the urban can coexist.”