Yokohama city council approved a budget of JPY 1.74 billion for fiscal year 2020, of which JPY 400 million (US$3.6 million) is earmarked for IR promotion.
The city will now start work on recruiting an IR operator partner while developing an improvement plan in 2020 to develop the area as part of an application to the government to be certified for an IR. However, there is persistent opposition to the plan and citizen groups have begun asking for a referendum on whether or not an IR bid should go ahead.
The budget was approved by majority of the LDP and Komeito parties. In addition to a focus on childcare and welfare, the city has also set aside JPY 200 million for a new theater facility.
Yokohama city has been holding briefings for residents since August 2019 when Mayor Fumiko Hayashi announced the project. The city will formulate an implementation policy in June, as announced in December 2019, based on public comments received by April. The IR operator will be recruited and selected within the 2020 fiscal year by the selection committee.
Despite the budget being approved, there still remains a cautious attitude to an IR. The second Constitution/National Forum opposes the bid, stating, “We regard that this budget solves problems. IRs should not be permitted at all.” The Forum has requested the removal of the budget item.
On the floor, observers shouted, “Don’t make fools of the residents.”
There was confusion when the chairman asked them to leave, and there was a temporary suspension of the meeting shortly before the vote.
Las Vegas Sands, Galaxy Entertainment Group, Melco Resorts & Entertainment and Wynn Resorts are among those to have expressed their interest in a Yokohama IR. It is expected that these operators, along with local firm Sega Sammy, will apply.
However, the spread of the novel coronavirus has resulted in a sharp decline in inbound foreign tourists and the global economy has severely deteriorated. The environment also changed drastically overnight with the postponement of the Tokyo Olympics and Paralympics for 12 months until the summer of 2021.
The Tokyo Metropolitan Government is considering an IR facility and the postponement of the Tokyo Olympics is likely to be a tailwind for Yokohama, but if the economic downturn continues there may be increased uncertainty about whether an overseas IR operator and domestic real estate and tourism industries can actively invest.
In the city of Yokohama, it will be important to select a stable operator and create an environment that will attract private investment.