MGM Resorts Japan confirmed this week that its subsidiary Osaka IR (SPC) has signed the Osaka/Yumeshima Area Specified Complex Tourist Facilities Development Basic Agreement with Osaka prefecture and city. The company has also completed drafting of an area development plan.
In a statement, MGM said that Osaka IR (SPC), an entity jointly established by MGM Resorts Japan and its main consortium partner ORIX to operate an IR in Osaka, has concluded a Basic Agreement with Osaka.
“MGM and ORIX hope to contribute to sustainable economic and tourism growth for Osaka, the greater Kansai region, and Japan as a whole, through this project,” MGM’s statement said. “We will continue to work with both public and private sectors to promote the processes to make this goal a reality.”
The objective of the basic agreement is, “To establish that in the event of area approval, SPC shall be the operator, and at the same time stipulate the obligations of Osaka prefecture, Osaka city and SPC as well as the required procedures in order to ensure a smooth start in the application for certification and when concluding the implementation agreement.”
The agreement stipulates that not only shall the business schedule be strictly adhered to, but also lists a performance bond of JPY 650 million (US$5.6 million).
SPC’s share of costs is broken down as JPY 20.25 billion (US$174 million) in infrastructure development, JPY 125 million (US$1.1 million) in “selection costs” and JPY 70 million (US$609,000) in environmental assessment costs.
Measures for various land issues that Yumeshima Island, the planned location of Osaka’s IR, is currently facing – such as removing underground obstacles and land pollution countermeasures – are to be covered by Osaka city on the condition that taking on this obligation is approved at an upcoming Osaka city council session.
The total cost of developing the Osaka IR is currently estimated at JPY 1.08 trillion (US$9.4 billion).