Euljiro's last stand: Redevelopment rips through historic manufacturing hub

Decades-old industrial supply stores and factory workshops are torn down at an industrial district in the Euljiro area, Jan. 4. Korea Times photo by Shim Hyun-chul

60-year-old Euljiro industrial district being torn down to make way for high-rise apartments

By Lee Suh-yoon

For seven weeks, Lee Bae-woong, 75, and his son have been trying to salvage what they could from their 38-year-old hardware store in Euljiro, downtown Seoul. With excavators due in a week, they were running out of time.

"The construction company will bury me under lawsuits if I don't move out by Sunday," Lee lamented as he looked at the remaining clutter on the store's floor and shelves, Jan. 3. Much had already been carted off to scrap yards.

A "bolt" shop, even a small one like this, requires at least three months to pack up, Lee says. If anything is not sorted and labeled first, parts with miniscule differences in size and shape can get mixed up, making it impossible to choose the right one for customers ― or "no better than junk" as Lee puts it.

A view of the disappearing area in the Euljiro manufacturing district from above.

Around the corner, a towering mound of shredded wood, steel and concrete ― the remains of shops already demolished ― was blowing hazardous clouds of dust into the street.

When The Korea Times covered the area in September, Euljiro was a dynamic ecosystem of hardware stores, garage-sized factories and eateries that fed some 50,000 shopkeepers and technicians. It still is, but chunks of it are now being razed by developers to make way for high-rise apartments.

A silent fear gnaws at those left in Lee's block, located just west of Sewoon Electronics Plaza and south of Cheonggye Stream. Dubbed Sewoon District 3, this area encompassing some 400 stores and workshops was chosen as the first demolition site after Jung-gu Office and the city government gave Hanho Construction the final go-ahead for the Euljiro redevelopment project in October.

Lee Bae-woong, 75, and his son Lee Jung-hun pose inside the Kwangil Bolt Shop at the hardware market next to Cheonggye Stream, Jan. 3. Neither have had a day's rest for weeks, working on Christmas and Jan. 1, to meet the eviction deadline.

Half of the shops in District 3, most around 30 to 60 years old, have been gutted, with the rest of the tenants expected to be pushed out by the end of January.

The tenants, making up 90 percent of the working population in Euljiro's industrial district, say their rights were ignored throughout the murky process.

"The developer, Hanho Construction, completely bypassed the coalition of tenants that make up 90 percent of the working population here," said Kang Mun-won, a hardware shopkeeper from a neighboring district who now heads the emergency committee of shopkeepers in Euljiro.

"What they were doing was like guerilla warfare, going after each tenant one-by-one from behind with eviction letters and lawsuit threats."

Subcontract workers under Hanho Construction survey a demolition site, Jan. 4.

The quiet assault began a year ago, fueled by a steady barrage of eviction letters, damage claims ranging from 300 million won ($267,000) to 500 million won for "causing delays," and even demands for rent that were double the original level from Hanho Construction itself, according to files reviewed by The Korea Times.

By law, developers can start redevelopment with the consent of just three-quarters of the landlords in the rezoned area, usually divided into administrative subunits that make it easier to get the 75 percent consent rate.

Here, Lee and his four employees received up to 50 customers a day. He expects his business to be much slower at the new hardware supply building in Guro-gu, southwestern Seoul, where he is moving.

A sign directs visitors to an "exploration path through the alleys of the Euljiro area, Jan. 4.

"The Cheonggye Stream area is a good commercial district for customers to reach by foot on their way somewhere. Guro is different. Who will come all the way to Guro to buy a bolt?" Lee said. "Also, over half my business was with other supply stores or small factories in Euljiro."

Knowing this, others in District 3 are trying to keep their foothold in Euljiro.

Kim Ki-cheon, 58, who specializes in selling chains, gears and motors, is moving into a storage room at another shop in Euljiro where the excavators have not yet arrived. He also has to share the cramped space with another displaced shopkeeper.

Activists for the preservation of the Euljiro manufacturing district march through its back alleys, strewn with metal bits that fell off moving carts, Tuesday.

"I threw out one ton of perfectly good supplies because there won't be much space now," Kim said with a bitter smile. "I'm being chased out like a dog."

The exodus from District 3 as well as 5 and 6 has added previously nonexistent premiums to the rent at other districts, even for shops in the narrower alleys.

With the odds of survival slim, some shops are simply closing down.

"Business won't be as good as before inside a small alley, not to mention the high rent," said Hong Sung-chul, owner of a soon-closing supply store Pyung-An Corp. in District 3 directly across Cheonggye Stream.

A worker is on his way to pick up supplies near Cheonggye Stream, Tuesday. Bikes are a common mode of transport in the area.

Hong's father opened the store in 1958, the year he was born. Hong, too, wanted to pass the shop down to his sons.

"Thinking back, even the IMF crisis (Asian Financial Crisis) was not this bad. At least then, I still had a store, a means of living, to weather through the tough times," he said with a sigh. "I'm going to try to keep afloat by setting up an online channel and supplying to my regular customers."

This is not the first time people have been displaced around Cheonggye Stream. In 2003, about 40,000 local traders and street vendors were ushered out of the area as an elevated highway was taken down to "reopen" the stream underneath. This urban renewal project is still considered one of the greatest feats of then-Seoul Mayor Lee Myung-bak.

A customer asks for a specific supply part at an alley store in Euljiro, Jan. 3.

Public sentiment is not particularly in favor of preserving Euljiro, a decrepit neighborhood that becomes deserted at night after the shopkeepers go home.

"Compared to neighboring Jongno with its flashy neon signs and crowds, this run-down area in the middle of Jung-gu may have seemed like an eyesore," Hong admitted. "But this place comes alive during the day, just resting through the night to prepare for the next day."

Remodeling projects that could preserve the area's shops and history, rather than razing it to the ground, would have been better for the city, Hong and other tenants claim.

Experts say the area holds valuable resources for advancing Fourth Industrial Revolution ventures here, despite popular misgivings about the area's backwardness and lack of competitiveness in the 21st century.

Work carries on at a metal-shaping workshop in Euljiro, Jan.3.

"There is a tangible future for the 50,000 traders and craftsmen of Euljiro," said Park Eun-seon, an urban planning researcher and director of Listen to the City, an art-design-urbanism activism collective.

"Having propped up the country's manufacturing industry since the 1960s, they are optimized for the small-scale specialized production needed for the maker movement."

Park says the newly refurbished Sewoon Electronics Plaza, trumpeted as the mecca of the "maker movement" by the city government, will be a mere facade without the surrounding back alley infrastructure of Euljiro.

"When this tight-knit network of talent and resources is gone, who will bring your designs to reality in just a few hours?" she said.

Kim Ki-cheon, 58, a father of three, stands inside his industrial supply store on Jan. 3. "The construction company tried to double the monthly rent I paid to the landlord," Kim said. The shop was shut down a few days later.

What's happening in Euljiro echoes the fate of countless other historic commercial hubs in Seoul beset by real estate speculation.

Though there is enough housing to supply 96 percent of all residing households in Seoul, only about 40 percent of them are occupied by the actual owner, according to 2017 data from the Ministry of Land, Infrastructure and Transport. So over half the homes are owned for investment purposes rather than actual need, driving up demand and price.

As a part of its strategy to cap housing prices, the government is freeing up more areas for high-rise apartment projects. Critics, however, say the supply-centered policy will be insufficient.

Phone numbers of neighboring supply stores and manufacturers, sorted by need, are displayed at a store in the Euljiro area, Jan. 3.

On Tuesday, the Cheonggye Stream Anti-Gentrification Alliance marched through Euljiro's back alleys on its three-kilometer "exploration path" set up by Jung-gu Office in 2016. Young artists, designers, and manufacturing startup owners who have their workshops in Euljiro joined the march, saying the area's unique ecosystem makes their creative projects possible.

"Here, you could realize any of your art or industrial designs within a three-kilometer radius," Lee Young-heon, a young artist who leads the Just Project showroom. "But we're having more trouble with our projects as redevelopment forces our decade-long partner factories and stores to close down or move away."

One of the spots on the Eulji exploration path is Eulji Myeonok, a 33-year-old famed Pyongyang naengmyeon (cold noodle) restaurant next to Euljiro 3-ga Station.

Kim Byung-chul, 79, right, and another shopkeeper reminisce on their moving day, Jan 4.

Lee Yoon-sang, 92, a former trader of car batteries, now owns the building Eulji Myeonok is located in at the stricken District 3. His eldest son runs the restaurant.

He is currently in a legal battle with Hanho Construction, demanding an investigation into the processes that freed the area up for redevelopment last year.

"They sent us official letters telling us the redevelopment permit was not passed through because not enough landlords agreed to it, and suddenly two or three days later, we got a different letter saying it had been passed through by a change of mind of some landlords ― none of it was transparent," Lee said.

"I don't like how this redevelopment plan is being carried out without providing an alternative location for the traders and shopkeepers either."

Hong Sung-chul, 60, left, moves out supplies from his store next to Cheonggye Stream, Jan. 4.

On the second floor of the building, Park Ok-boon, 61, runs Eulji Dabang, a 35-year old coffeehouse listed on Seoul Metropolitan Government's "Oraegage" list of famed historic stores.

"Although my store is an Oraegage, the city government is just looking the other way. I would have been chased out by this month if the Eulji Myeonok owner, my landlord, didn't hold his ground and fight," said Park, currently battling breast cancer.

"We might make it through one more year but after that, how will I pay my medical bills? What about my regular patrons?"

Even Mayor Park Won-soon, a former civic activist who vowed to be different from his conservative predecessors by championing a democratic and people-centered policy of urban regeneration, has turned a blind eye to the woes of Euljiro.

Lee Yoon-sang, 92, stands outside the Eulji Myeonok restaurant, Tuesday. He says landlords here including him were pressured to sign murky contracts with Hanho Construction.

"Even if there are some cultural heritage sites, they might not necessarily be worth preserving over the housing project, as we have been informed by Jung-gu Office that a social settlement was reached," said Kang Maeng-hun, the urban regeneration head at the city government office.

Park Eun-seon says the city government's compliant attitude to Euljiro's demolition reflects a warped view of history centered on the elite.

"The Joseon Kingdom's ruling family is not the only historical heritage we have," Park said. "The stories of common people who provided the foundations of the country's industrial development in the 1960s and 1970s are important too."