Osaka Prefecture and Osaka City have privately accepted the MGM Resorts-ORIX Corp consortium as their preferred partner to develop an integrated resort on Yumeshima Island and will make official announcement later this month, according to a report by Japanese media outlet Nikkei.
The report says the Osaka Prefecture IR Evaluation Committee made its decision on Thursday, with the Prefecture and City almost certain to accept their recommendation and proceed with signing a formal agreement with the operators.
If true, the decision to name MGM-ORIX as preferred partner comes as no surprise given they were the only consortium to take part in Osaka’s RFP, although it does represent na significant milestone on the path to IR development. Assuming a Basic Agreement is signed, Osaka and MGM-ORIX will present their joint bid to the national government by the 28 April 2022 deadline and, if approved for a license, are expected to complete the first phase of development by the late 2020s.
Osaka is the only metropolitan Japanese city, and MGM the only internationally recognized IR operator, still in the race to develop one of Japan’s first IRs following the recent withdrawal of Yokohama, which ended the pursuit of Genting Singapore and Melco Resorts in that city, although both companies still hold a long-term interest in operating an IR in Japan.
The MGM-ORIX IR is estimated to include an initial investment of JPY 1 trillion (US$9.1 billion) with MGM CEO and President Bill Hornbuckle stating recently that he expects the company’s contribution to total no more than US$2.5 billion, likely spread over three years from 2024 to 2026.
“The program with ORIX is 40-40-20, meaning a consortium with other Japanese companies will make up the 20%. If not [MGM and ORIX] both fill to 50%,” Hornbuckle said.
He also accepted that further investment would follow, stating, “There is a commitment we are making to Japan and to Osaka that we would be a true partner in this.”