Announcement Archive

A Case of a Super TOD, Tokyo Area Development: Lessons in PPP

Sunday, November 1st, 2015

story from Tokyo Development Learning Center

“This is a super TOD. I have studied and visited many sites of transit-oriented development (TOD) in different countries, but I have never seen a case of TOD like this,” referring to the redevelopment of the Tokyo Station area, said Hiroaki Suzuki, former World Bank Lead Urban Specialist, author of two World Bank publications on TOD and land value capture (LVC), and currently, World Bank Consultant and Lecturer at Tokyo University.

“We will look at the regulatory and institutional frameworks for Private-Public Partnership which enabled the redevelopment of the Tokyo Station area in this session” Daniel Levine, Senior Officer and Acting Manager of the Tokyo Development Learning welcomed the participants to the second session of the knowledge sharing seminar on TOD, “Regulatory and Institutional Frameworks for Private-Public Partnership in the Tokyo Station Area” on October 8, 2015.

How can lessons learned from the Tokyo Station area redevelopment, a unique, large-scale and multi-stakeholder redevelopment project with its magnitude of investment be applied in developing countries? The panelists and participants of the knowledge sharing seminar tried to answer this question.

“Many transit projects provide cities in Asia with opportunities to transform cities by integrating transit and urban development. Despite differences in the stage of economic development and magnitude of investment, the instructional and regulatory framework adopted in the Tokyo Area Redevelopment would remain valuable, with certain adjustment for any urban redevelopment projects in developing countries.” Yasusuke Tsukagoshi, Special Representative of the World Bank Tokyo Office spoke. He also added the timeliness of this seminar series following the Japanese government’s announcement to increase its support to “quality infrastructure” development in Asia and the hosting of the United Nations Sustainable Development Summit, in which the need for increasing access to inclusive, safe, resilient and sustainable housing and transport was explicitly mentioned in the Sustainable Development Goals.

In the beginning of the seminar, Tatsuo Nishimoto, Deputy General Manager of Mitsubishi Estate Co., Ltd, the company that played a leading role in developing the Tokyo Station area, gave a presentation on the history of the area and its redevelopment. He explained how his company and other private landholders and stakeholders formed associations and mechanisms to work together in close collaboration with the Tokyo Metropolitan Government, under a shared vision and transform the area in to one of the most vibrant, multifunctional, environmentally sustainable and resilient public CBDs in Japan.

After describing the changes in Japanese urban development policy and putting it in to a global context, Dr. Miki Yasui, professor at Hosei University introduced the concept of area management—the integration of urban development and management through effective public and private partnership to enable innovative uses of urban space. The redevelopment of the Tokyo station area illustrated a successful case of an “area based entrepreneurship,” which according to Yasui, is “a strength of Japanese area management.” She further explained that the institutional tools used to promote this type of area management was “deregulation.”

A participant working for the Ministry of Transportation in Indonesia joining the discussion via videoconference explained that, there are multiple ministries involved in transit-oriented development in Indonesia. She asked the panelists whether there were specific regulations pertaining to area management.

“Area management is not controlled by the government. It is done through dialogues, discussions, and agreements within the framework of the masterplan. The private sector took a lead and actually, pushed for deregulation of the area,” Nishimoto answered, speaking from his experience. 

Participants connecting from India shared their experience in involving landlords to come together to encourage dialogue, and explained that it is a challenge in their country context. With the exception of some major cities, central business districts (CBDs) are not clearly defined and it involves a great number of property owners who are private individuals.

“What I find quite interesting is the long term perspective of the project.” Gerald Paul Ollivier, Senior Infrastructure Specialist of the World Bank Group commented. He explained that typically in the Bank’s client countries, regulations and limit to capital make it challenging to have a long term perspective. According to Ollivier, developers are usually looking for a return on an investment in the short term. Creating a strong public-private partnership may be challenging because private companies may not be interested in a long term investment or they lack capacity. But he concluded on a positive note that “development of a grassroots ownership, the community or public could be a basis for a long term engagement.” Olliver also remarked that a degree of flexibility in regulations such as floor area ratio transfer is essential in creating value and allowing corporations invest in where it makes the most business sense.

According to Ritsuko Yamazaki, Director at the Policy Bureau of the Ministry of Land, Infrastructure, Transport and Tourism, there are three key elements that make cities successful; growth potential, regulations, and PPP. “If these key features are present, the Japanese model of transit-oriented development can be applied to other cities in developing countries,” she commented.

“In regards to resiliency, I found it very interesting that the buildings in the Tokyo Station area were places to flee to and not evacuate from.” A participant commented and asked further: “what were the best approaches in bringing the expertise to make the buildings and infrastructure resilient? What is the dividend for making the buildings safe and resilient?”

“The most important thing in the CBD area, is business continuity.” Nishimoto answered. He explained that the Japanese people, living on a volcanic island, has always been very keen and has a high awareness of disasters. By making buildings safe and ensuring business continuity, “we can tell corporations to establish their headquarters in Tokyo,” Nishimoto said. 

The Tokyo Station area is not only a diverse-use, resilient, and sustainable area, it is also a “triple hub” located on a loop of transport network inside the Tokyo metropolitan area, a regional railway network, and most likely in the near future, with the aid of the Japanese government, a regional hub in Asia with its connectivity to Tokyo’s two airports. This is a case of a “super TOD,” as Suzuki mentioned.

“Governments in developing countries should use their regulatory power. Connectivity and accessibility creates value, but clients in developing countries don’t see this. Often times, they focus on constructing transit, and don’t consider developing land together.” “This is why we started this seminar series.” Suzuki said.

“Albeit the difference of economic development stage and size of investment, we can draw valuable lessons relevant to, developing countries, from the redevelopment of the Tokyo Station area, First, PPP is indispensable for the success of TOD as the land development eventually depends on the decisions of private businesses and households, while the planning authority belongs to the local governments. Second, the local governments need to incentivize businesses to reinvest in the redevelopment areas by flexibly adjusting the land use regulation, particularly FAR as businesses need to materialize ROE required by their shareholders.” Suzuki summarized. 

“The type of work that Tokyo has been working for decades is the level of work that the cities in developing countries are working on now. It’s very timely and useful to hear about the advanced practices. I see immediate opportunities to apply what I have learned today to my project in Tianjin, China.” Ollivier commented.