In 2019, SM Entertainment initiated the construction of ‘SMTown LA’ in Los Angeles, aiming to establish a stronghold in the global market.
The prospect thrilled K-pop enthusiasts in LA, leading to the designation of the intersection of 6th Street and S Oxford Avenue in Koreatown as “SM Entertainment Square.”
However, recent revelations indicate that SM’s plans for the SMT LA edifice failed to materialize. The company now faces controversy, with construction halted due to unpaid costs potentially amounting to hundreds of thousands of dollars.
Pub Construction, the primary contractor, is pursuing legal action against SM, alleging non-payment.
Also, the architectural design firm and other entities involved in the project corroborate the lack of payment from SM, signaling potential legal recourse against the entertainment giant.
A representative for the architectural design firm stated,
“This project underwent five changes due to SM Entertainment’s repeated demands, and we were responsible for designing the third and fifth versions.
We are owed tens of thousands of dollars, and I know several other companies involved in the project are also owed significant amounts.”
The unresolved construction expenses are just one of several controversies SM encountered during its efforts to establish SMTown LA.
Significant delays stemmed from SM’s failure to secure necessary permits, and pedestrians faced safety hazards due to construction conditions.
The recent management alterations within SM likely exacerbated the challenges surrounding the SMT LA project.
Pub Construction CEO Chris Yi stated,
“The SMT LA project was virtually halted during the management transition to Kakao, and we are still awaiting a response from SM to resolve the construction cost issue.
SM’s conduct has been exploitative and detrimental, as they continue to transfer their problems to other companies.
We plan to file a formal complaint with the Korean government in the hope that Korean companies will not suffer further losses due to SM’s inaction.”