By Kim Tae-gyu
Lotte Group’s bold plan of establishing the Universal Studios Korea Resort (USKR), near Seoul is threatening to collapse since they failed to secure the lands to build the fancy theme park and other facilities.
Universal Parks & Resorts (UPR) President Thomas Williams visited Korea this week to meet Lotte Group Chairman Shin Dong-bin and Gyeonggi Province Governor Kim Moon-soo to confirm their commitment to the $3 billion project.
Despite this, watchers are pointing out that the future of the USKR is uncertain as developers struggle to buy the necessary land in Hwaseong, south of Seoul, from the state-run Korea Water Resources Corp. (K-Water).
``Developers headed by Lotte vowed to start the construction of USKR early last year when they signed the memorandum of understanding (MOU) with UPR in Jan. 2010,’’ said a source familiar with the issue.
``They have not started construction. Worse, they have yet to purchase the land in Hawseong from K-Water. You don’t know for sure about the future of the USKR project.’’
If completed, USKR would be the world’s sixth Universal Studios theme park and the fourth in Asia following Japan, Singapore and Dubai. Its projected size of 530,000 square meters would be the largest in Asia.
When the ambitious scheme was first announced in 2007 under the strong support of Gyeonggi Governor Kim, it was supposed to open in 2012. But the schedule was delayed due to the financial crisis.
The next goal of 2014 came when the MOU was signed in early 2010 but now the consensus is that they cannot finish before 2016.
When contacted, K-Water said that developers were unable to meet the requirements to buy the land in Hwaseong.
``They have to release the finalized blue print for the project but they didn’t. They need to be designated as a foreign-invested entity to buy the Hwaseong lands based on an exclusive contract with us but they are not,’’ a K-Water insider said.
``Accordingly, we are not allowed to negotiate with them on selling the land.’’
In order to be designated a foreign-invested outfit, it must attract more than 10 percent of its funds from outside of the country. But the developers’ consortium is composed of just domestic players including the largest shareholder Lotte and POSCO.
Observers say Williams’ comments may have something to do with the 10-percent obligation. He said that the UPR might think of investing in the consortium.
In this climate, even Lotte officials say that the USKR project might stall.
``What we have in our hands is just the MOU, which is not binding. We do not have the land to construct the theme park and other resort facilities. We cannot say that it’s a done deal,’’ said a Lotte official who asked not to be named.
Another source pointed the finger at Gyeonggi Province.
``We heard from developers that Gyeonggi promised to offer land for free or at almost give-away prices. But Gyeonggi has no such right to do so. It has complicated things enough to cause the current disruption,’’ he said.