Osaka Prefecture and Osaka City have officially announced a consortium comprising MGM Resorts and Japanese finance giant ORIX Corp as their preferred partner to develop an integrated resort.
According to information released by authorities on Tuesday, the Osaka Prefecture IR Evaluation Committee gave MGM and ORIX a total score of 788.5 points from a possible 1,000 under its RFP scoring system, with the prefecture and city subsequently determining that the consortium qualified as a partner to develop and operate an integrated resort.
“Currently, the global expansion of the coronavirus pandemic is having a serious impact on socio-economic and tourism-related industries, but the proposal from the MGM/ORIX consortium shows a deep understanding of the purpose of this project,” Osaka said in announcing the results.
“Looking ahead to post-corona, the realization of a growth-type IR that makes use of the tourist attractions of Osaka/Kansai and the potential of industrial and cultural resources will become the engine of economic growth in Osaka/Kansai. The urban brand of Osaka will become a new internationally competitive city brand. It is a very ambitious proposal aimed at raising [Osaka] to the next level.
“In the future, we will steadily proceed with the project in full cooperation between Osaka Prefecture, Osaka city and related parties to … form an international tourism base in Yumeshima and revitalize the Osaka Bay area.
“It is expected that the Osaka IR will contribute to the growth of the Osaka/Kansai economy and the [ramping] up of the tourism industry, as well as the introduction of tourism and economic promotion across Japan as a whole.”
MGM/ORIX consortium final RFP scoring results:
|Criteria||Actual score||Maximum score|
|Excellent concept with overwhelming originality||204.0||260|
|Implementation system and financial strength||254.5||300|
|Creation of high-quality, unique international tourism bases||152.5||200|
|Attractiveness and sustainability of IR, contributing to community||76.0||10|
|Countermeasures for concerns, strong cooperation with government||101.5||140|
The decision, although widely anticipated given MGM-ORIX was the only participant in the RFP process, makes Osaka the third and final of Japan’s known candidate locations to name its partner after Wakayama selected Clairvest Group in June and Nagasaki chose Casinos Austria in August.
Osaka said it will now look to sign a Basic Agreement and prepare an area development plan, including the implementation of public hearings, between October 2021 and 4 January 2022, and from February to March 2022 will seek consent regarding the area development plan from the Osaka Prefectural Assembly and Osaka City Council. An application will then be made to the central government before the 28 April 2022 deadline.
Osaka is looking to develop a world-class integrated resort on Yumeshima, a 390-hectare man-made island located alongside Osaka Port and site of the 2025 World Expo.
The development is estimated to cost around JPY 1 trillion (US$9.1 billion) with an opening date currently planned for sometime in the late 2020s. MGM CEO and President Bill Hornbuckle stated recently that he expects the company’s initial contribution to total no more than US$2.5 billion, likely spread over three years from 2024 to 2026. The remainder of the financing would presumably come from consortium partners and debt.
“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.”