Issue Focus

The current urban regeneration initiative (URI) in Korea is designed for recovering vitality of the private sector and for attracting private sector investment by providing intensive public investment within designated areas. In this area-based initiative, the public investment is designed to play a role of ‘priming water’ or ‘leverage’ in attracting private investment. However, the practice of the URI in Korea has been highly criticized due to the failure of the role of levering private investment. In this research, in order to examine the ‘levering effect’ of the public investment in practice and to find out ways to improvement, the author investigated 28 areas where the economy-based or city center type URIs have been conducted in large cities (population larger than 500 thousand). Moreover, the author chose three cases of public-private partnership (PPP) projects within the 28 areas and conducted qualitative case study. As a result of the investigation, it was found that very little amount of the ‘levering effect’ was identified. In 14 out of 28 areas, no private investment has been attracted but URIs are conducted only with public projects. Throughout the investigation, this research suggests seven ways of enhancing PPP projects in the Korean URI. Accusation of appropriate public land for PPP projects: throughout the research, it was found that acquiring appropriate land is a core element of for public sector-led PPP projects. Three ways for acquiring public land were suggested. Undertaking PPP projects by using private land: most land suitable for property development belongs to the private sector. In this research, two ways to use private land and proceed PPP projects are suggested. Increase viability for attracting private investment: the main reason for the little private investment is low viability of projects in declined cities. Therefore, seven ways for increasing viability was suggested. Make the budget transfer easy: delays occur often in PPP projects where counter-partners exist. Therefore, it is necessary to make the budget transfer easy in order not to make unexpected inefficiencies. Importance of pragmatic thinking and not to adhere too much to the normative ideas: pursuing too much publicness may harm the public interest as a consequence. Flexible and pragmatic approach are required to accomplish the purpose of projects and the URI. Consisting of governance structure that can reflect people’s opinion in a balanced way: not only reflecting opinions of active participants, but also reflecting opinions of silent majority and stakeholders whose interest is indirectly related to the project is also important. Performing the role of public sector as a trustable partner to the private sector