Osaka city mayor Ichiro Matsui has proposed the city consider renting the land upon which an integrated resort would be built rather than selling it outright. The candidate location for Osaka’s bid is Yumeshima in Osaka Bay.
“We believe nothing short of a post-war economy can keep an Osaka IR from being successful,” said Matsui. “The council is expressing concern about mitigating the risk of IR operations not going well [due to the operator], and asking for a plan.
“In the event the operator has business troubles due to failure in other regions or operations, Osaka (city/prefecture) would remain silent if the operator owned the land. However, if the land is being rented, we will be free to seek out a different operator, direct the overall town building on Yumeshima and rebuild.”
Matsui went on to emphasize the advantages of renting, stating, “This is a long-term business model, so a long lease will eventually exceed the sale price.
“The sale price of the IR facility land is around the JPY60 billion (US$554 million) mark. Operators are also looking to minimize the initial land investment. A 30-year lease at JPY2.5 billion (US$23 million) per year will be JPY75 billion. Considering the various risks, we think renting is the way to go and plan to draft the IR implementation plan based on rented land.”
