Tue, Oct 03, 2000 page2

• Construction project stirs controversy

  DEVELOPMENT The builder, in seeking to have the site included in the city's urban development plan, has earned the wrath of councilors who say inclusion should not be granted to projects in affluent areas

  • By Ko Shu-ling / STAFF REPORTER
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  As the first phase of demolition of the Regency Hotel (財神酒店) was completed in August, Taipei City residents were guaranteed a fresh look for the site of the old hotel that had been abandoned for over 18 years.

  Standing at one edge of the Jenai Circle, the once-renowned 14-storey, five-star hotel had begun to be seen as a city eyesore.

  Financial problems suffered by the hotel's successive owners over the years had made attempts to reopen the ill-fated hotel futile.

  

  The site where the Regency Hotel used to be, now empty after completion of demolition work.

  PHOTO: GEORGE TSORNG, TAIPEI TIMES

  Although the current owner seemed poised to transform the area into a 31-storey commercial and residential building, the project became enmeshed in city government red tape while awaiting approval for inclusion in the latest urban development project.

  If the request is granted, the owner may be entitled to an extra 700 percent of floor space in the original 8,000-ping (26,400m2) lot. This may not be a scenario welcome to many city councilors.

  An ill-fated history

  

  The Regency Hotel, as it looked prior to demolition.

  TAIPEI TIMES FILE PHOTO

  The fate of the Regency Hotel has changed many times.

  Completed in 1978, the hotel was at that time owned by more than 300 investors, most of whom were either retired civil servants or housewives.

  The hotel's busiest period was between 1980 and 1982, when monthly revenues reportedly reached between NT$5 million and NT$6 million.

  After it reached this peak, however, there seemed only one way to go. The large number of investors made management of the hotel difficult. In 1982 the hotel was shut down due to financial difficulties.

  It remained closed for six years until 1988 when the new owner, the Hungyuan Investment Group (鴻源投資集團), purchased the hotel for NT$1.5 billion in the hope of reopening it.

  Hungyuan planned to spend one year renovating it, but the project was stymied when the group was caught in a financial scandal, eventually declaring bankruptcy in 1991.

  As the project was tabled, the hotel was taken over by the city's Bankruptcy Management Committee and was to be auctioned off by the courts.

  After three failed auction attempts, the city finally sold the land in 1997 to the only bidders, Reihoting Construction Company (瑞和庭建設公司) and its affiliate Raychang Development Company (恆昌置地公司).

  The first phase of the demolition work involving the 14 floors above ground started in July this year and was complete by the end of August.

  The second phase, involving the two storeys underground, is expected to be completed by early 2001.

  The companies have earmarked over NT$6 billion and three years to rebuild 31 stories above ground and six stories underground.

  A place of blessings

  While most businesses had shown little interest in the hotel, Ho Po-wen (侯博文), chairman of the Reihoting Construction Group, took a substantial risk by purchasing the hotel, hoping to prove false the widely held suspicion that poor fengshui was responsible for the hotel's unhappy lot.

  A life-long volunteer of the Buddhist Compassion Relief Tzu Chi Foundation (慈濟功德會), Ho said he had been inspired by Master Cheng Yen (證嚴法師) of the Tzu-chi Foundation who had told him that the best way to dismiss the "groundless rumor" was to transform the hotel into a "place full of blessings."

  Whether he would succeed, however, depended on whether the city would include the area in its urban development plan.

  In June this year, the city announced its intentions to incorporate 131 sites in its latest urban development plan, in which incentives are offered to land owners in order to encourage them to take part in the city's reconstruction programs.

  The Urban Renovation Law stipulates that land owners are allowed to build a percentage of additional floor space equivalent to the original cubic capacity of the building, up to a certain percentage.

  For example, if the original floor space of a building is 700 pings, the owner is allowed to build 700 percent more of the original floor space should it decide to reconstruct the building.

  Lured by this prodigious offer, in August this year the company filed an application for inclusion in the urban development plan.

  The city is still considering the application. If granted, the company may be entitled to as much as 700 or 800 percent more than the original floor space.

  In addition, the building may become the first to be rebuilt under the revised Urban Renovation Law, which went into effect in April of this year.

  Opposition from city councilors

  While the city is still examining the case, city councilors have already voiced their opposition.

  Both New Party City Councilor Chung Hsiao-ping (鍾小平) and DPP City Councilor Yeh Hsin-yi (葉信義) not only called on the city government to reject the company's application, but also threatened to appeal to the Control Yuan should the company's wish be granted.

  Councilor Chung said that the area itself simply does not merit incorporation in the urban renovation project.

  "Renovation incentives should be prioritized to those areas where urban development is little and slow, such as the city's Wanhua, Chungshan, and Tatung districts, not affluent commercial downtown areas like Ta-an district where the Regency Hotel is located," he said.

  Chung claimed that the new hotel owner might profit by as much as NT$4.5 billion should it win the city's approval.

  "Businessmen, as smart as they are, don't buy out the place for charitable purposes. They do it for money," he said.

  "Imagine this: its location alone is bound to attract many corporate investors and well-off individuals to begin with. If it costs around NT$900,000 per ping to rent an office and NT$850,000 per ping for an apartment, how much do you think the owner will pocket?" he said.

  "Don't forget, moreover, about the additional 700 percent of floor space to which the owner may be entitled," he added.

  The first seven floors of the 31-storey building are slated to be offices and the remaining 24 to be residential.

  Councilor Yeh said it would be ironic to see the city granting the company's application.

  "During the 1998 mayoral election, Taipei Mayor Ma Ying-jeou (馬英九) raised questions about the possibility that the city sought to reward vested interests," Yeh said.

  "It would be preposterous to see the Ma administration realize a proposal of the sort which he once so robustly condemned," he said.

  For your information

  The checkered history of the Regency Hotel

  * 1975 Construction of the Regency Hotel begins * 1978 Construction completed. The hotel was owned by more than 300 investors, most of whom were either retired civil servants or housewives * 1982 The hotel went belly-up due to financial difficulties. It was boarded up for the following six years * 1988 The Hungyuan Investment Group purchased the hotel for NT$1.5 billion in the hope of rejuvenating it within a year * 1991 The group was caught in a financial scandal and eventually had to declare bankruptcy. The hotel remained closed for another six years * 1997 Taipei City sold the land to the only joint bidders: Reihoting Construction Company and its affiliate Raychang Development Company * 2000 The first phase of the work to demolish the building was completed two months ago Source: Taipei Times
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