Osaka’s IR Project Gets Support from Political Heavyweight

The final leg of Japan’s integrated resort (IR) plans is rapidly approaching. With only a few months remaining until proposals must be submitted, Osaka is bringing in a well-connected individual. City and prefectural authorities have appointed Hiroto Izumi, a former adviser to two Japanese prime ministers, as their aide in Osaka’s urban planning. This includes the development of a casino resort, which if approved by Japan’s national government, might be launched in 2029.

Osaka Finds High-Profile Support

Osaka’s online comment phase for its casino proposal will run from January 21 to February 21 of next year. The national government will decide by the end of April on any submissions made by local governments in order to host an IR.

Local media reports that Mr Izumi will serve as an advisor for the period January 1, 2022, through March 31, 2023. He is a former official of Japan’s Ministry of Land, Infrastructure, Transport, and Tourism. According to GGRAsia, Izumi served as an adviser to former prime ministers Yoshihide Sug and Shinzo Abe. Both were supporters of Japan’s casino liberalization policy.

Osaka’s authorities intend to submit the final draft for its District Development Plan, including its proposed casino scheme in Yumeshima, to the prefectural assembly in February and March of next year. Osaka would then submit its proposal to the Japanese Diet in April, ahead of the April 28 deadline.

Osaka Has High Hopes for IR

Yumeshima is an artificial island in Osaka Bay that will house both the casino resort as well as the expo. A 40% equity stake in the IR scheme will be held by casino operator MGM Resorts International and Orix Corp, its main consortium partner. A total of 20 local companies, including railroad operators Kintetsu Group Holdings Co Ltd and Hankyu Hanhin Holdings Inc, will each hold a 20% share in the IR scheme.

Recently, Osaka has had to combat an increase in local resistance to the IR plan. Osaka Mayor Ichiro Matsui became a target after he revealed that local taxpayers would be paying an additional ¥80 billion ($700 million) bill to clean up land earmarked for the project.

Matsui stated, “It is natural that the city—the landowner—should bear the cost of providing safe and secure land to the business operator which will rent it.”

After arsenic, fluorine and other contaminants were detected in Yumeshima’s soil, this extra cost was necessary. In the event of a major earthquake, the land could be susceptible to liquefaction.

Critics argue that although warnings have been given for years about these issues, Matsui previously dismissed them and insisted that local taxpayers would not be subject to an additional financial burden.

Matsui responded to such criticisms via Twitter by declaring that the economic impact of the IR would be ¥1.2 trillion ($11 billion) per year, that the contribution of the casino partners is ¥55 billion ($500 million) each year in Osaka, and that the land lease fee is ¥2.5 billion ($22 million) every year.

He added, “I consider it an investment when considering the returns of the IR business.”