*********** +++++++++++++++++++++ 111294B.ENG + Source: ONR Asia + *********** +++++++++++++++++++++ Country: Japan From: Japan Times 28 October 1994 p. 2 KEYWORDS: Japan, Tokyo Bay; Shoreline development, Tokyo World City Expo '96 +++++ TOKYO BAY DEVELOPMENT FACES DOUBTFUL FUTURE By KAORUKO AITA Staff writer Dark clouds hang over the future of the 10 trillion Yen Tokyo Bay waterfront development project, despite a showy ceremony Thursday to kick off construction at the site of the 1996 international exposition to mark the area's opening. Some fear that after the World City Expo Tokyo '96 Tokyo Frontier, which will run for 204 days from March 24, 1996, Tokyo Teleport Town, which is to occupy the fair site, may be nothing but a wasteland. "The site will be a vacant lot after the exposition, which is being held to pave the way for permanent buildings built by companies leasing land from the Tokyo Metropolitan Government," said an official in charge of the project. "But we have no specific plan as yet for when to invite firms to participate in competitive bidding to be tenants at the site, because of the current economic climate," he said. Planned at the peak of the late 1980s economic boom, Tokyo Teleport Town, occupying a 448-hectare man-made island about 6 km southeast of Tokyo Station, was envisioned as a futuristic community of 63,000 residents with a day-time commuting population of 106,000. Tokyo Gov. Shunichi Suzuki launched work on the project in a bid to create a "city of dynamism and spiritual richness " and a model of an international information-intensive city. The local authority, which has already poured 1 trillion Yen into the infrastructure, planned to carry out the project in four stages over two decades. The expo, which will be held on the main part of the development area, was to celebrate the debut of the first major section. Tokyo Waterfront Development Inc., established in 1988 by the metropolitan government in partnership with the private sector, is currently constructing three model office buildings at the site. But as office vacancies increase in the metropolis amid the current recession, many believe the firm may have a hard time finding tenants for the buildings, which are to be completed next October. Rent in the buildings, originally set at around 40,000 Yen per 3.3 sq. meters on the basis of construction cost estimates, is now considered exorbitant for an area so far from the city center. Average rent for 3.3 sq. meters of office space in Tokyo's 23 wards was about 26,000 Yen as of September, according to a survey released Oct. 24 by Ikoma Data Service System Co. in Minato Ward. Office vacancies have increased by 9 percent over the past four years, leading the firm to predict that average rents will stay around this level for several years to cothe. "No one will rent space in the model buildings unless the rent goes down to around 20,000 per 3.3 sq. meters, considering the location," said another metropolitan official in charge of the project. "Monthly rent of at least l5,000 Yen per 3.3 sq. meters will be required just to pay the interest on loans for construction of the buildings," he said. Executives of Tokyo Waterfront Development Inc. say they are confident the buildings will be leased without the owners having to haggle over rents, because the structures will be equipped with the latest intelligent functions to support modern businesses. "In addition, the economy is believed to have hit bottom," one executive said. Several metropolitan assembly members say the project should be reviewed to bring it more in line with the current socioeconomic situation. "Priority should be given to paying back loans borrowed for construction at the site," said Kiyoshi Tabata, secretary general of the Japan New Party's Tokyo chapter. "Otherwise, the huge investment for the future will leave an unprecedented burden on Tokyo taxpayers," he said. The metropolitan government said in September 1993 that the project would become profitable in 2026, 13 years later than originally planned, due to revenue. shortfalls from repeated re- ductions in rents for plots of land in line with falling land@ prices. Because of the reductions, the waterfront development is now expected to pull in only 2.8 trillion Yen over 30 years from 1992 - a decrease of about 4.6 trillion Yen from the original plan. Minoru Shimada, secretary-general of the Social Democratic Party of Japan's Tokyo chapter, said the party will soon start discussing the necessary changes to the project. Even the Tokyo chapters of the Liberal Democratic Party and Komeito, both of which have actively promoted the plan, recently said the development should be carried out step by step in accordance with socioeconomic changes. "If we take more time to create Tokyo Telport Town, paying careful attention to each aspect of the development, it will be a wonderful town, which will give Tokyoites will be able to take pride in," said Tatsujiro Hashimoto, secretary general of Komeito's Tokyo chapter. Yoki Kimura, leader of the Japanese Communist Part's Tokyo chapter, which has opposed the development from the beginning, said the metropolitan government should give Tokyo residents and opportunity to consider the best way to utilize the land to minimize losses from the project. Other assembly members predict the project will be reviewed by the next governor, who will be elected next April. Suzuki, 83, is not expected to seek a fifth term. CMR Disclaimer================================================== This document contains information all or part of which is or may be copyrighted in a number of countries. 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