Shinsegae uncertain about Starfield Cheongna
Shinsegae Group has recently decided to reconsider its plan to build a Starfield shopping complex in Cheongna International City in Incheon, industry officials said Wednesday.
The move seems to cast further gloom over the future of the free economic zone, which has suffered from declining foreign investment for years.
Last month, the retail giant requested the Incheon Metropolitan Government to delay the deadline for the group notifying its decision on construction until the end of this month.
The postponement will allow Shinsegae to drop its initial plan and come up with a new one. The Seoul-based group will likely delay the beginning of construction as well.
“We have yet to decide anything about Starfield Cheongna,” a Shinsegae Group spokesman said. “Thus, the recent move does not mean a delay of the shopping mall’s opening.”
Earlier this year, Shinsegae asked the Incheon Free Economic Zone Authority (IFEZA) for approval to build the 43,618 square-meter mega shopping mall on 165,000 square meters of land — 1.4 times bigger than Starfield Hanam in Gyeonggi Province.
The group aimed to foster the new mall as a suburban shopping complex with a theme park.
However, the plan provoked a backlash from small retailers in Incheon, who claim that the mega shopping mall will greatly reduce the sales of their nearby stores. The small retailers have urged the IFEZA and the government not to permit the new mall to be built.
Starfield Cheongna could avoid this, because free economic zones establish their urban planning regulations in advance.
Considering the Moon Jae-in administration’s stance of being friendly to small retailers, however, Shinsegae may have felt pressure.
Cheongna International City’s gloomy future is also imposing a burden on Shinsegae as well.
The development of Cheongna’s transport infrastructure has been sluggish, as the business district and research institutes are unlikely to open in the near future.
Easy transportation is one of the most important factors for a shopping mall’s success.
However, the construction of a bridge between Cheongna and Yeongjong; an extension of subway line No. 7 and an adoption of a bi-modality tram called the Guided Rapid Transit have been slowed down.
Some observers have raised doubts about the fate of Starfield itself, citing Starfield Goyang, which will open next month. The second mega-sized shopping mall of Shinsegae was initially planned to open last month, but Shinsegae Vice Chairman Chung Yong-jin changed the plan.
“We found many problems, after we opened Starfield Hanam and while we were preparing for the opening of Starfield Goyang,” Chung said in a press conference last month, “we will reconsider everything.”
A Shinsegae spokesman, however, denied the rumor of risks, saying that Starfield Hanam has had no problem in operation at all, except for a temporary traffic jam that happened at the opening of the mall.