MGM Resorts International is eyeing central Tokyo’s Tsukiji market as a possible site for a destination resort if the government legalizes casinos.
It’s reported that CEO James Murren visited the district to survey the sprawling warren of fish stalls there on about 231,000 square meters of land the city may sell after its vendors relocate. It would be one of the largest parcels ever offered for redevelopment in the Japanese capital, and though its land costs would be higher it’s gifted with an ideal location near the luxury shopping enclave of Ginza and readily accessible by mass transit.
CLSA analyst Jay Defibaugh said Tsukiji could be an alternative to the Odaiba district that is seen as the top contender for a gaming resort even though land prices in the Tsukiji area cost about JPY1.39 million per square meter (US$13,400), while the cost of property in Odaiba, on reclaimed land in Tokyo Bay, is about JPY956,000 per square meter ($9,200), according to the land ministry.
“Tsukiji, in terms of accessibility, is almost unrivalled in Tokyo,” Defibaugh said, and even with the higher costs, casino operators would find the site “very appealing”.
The fish market draws 42,000 visitors daily, many of whom come to see the early morning auctions where JPY420 billion worth of seafood, including some of the world’s most expensive tuna, is sold each year. The eating stalls around the almost 80-year-old covered market are popular destinations for freshly caught sushi breakfasts.
The Tokyo government decided in 2001 to relocate the market from Tsukiji to a less cramped facility being built on reclaimed land in Tokyo Bay about four kilometers away. The move has been delayed in part because of toxic soil that needs to be removed from the new site.
Tokyo may sell the Tsukiji parcel, about double the size of the area being redeveloped at the Hudson Yards site in Manhattan, after most of its 780 fish and vegetable vendors move to the new site, which is scheduled to be completed by early 2016, according to the city office that manages the market.
Ed Bowers, MGM’s senior vice president for global gaming development, said the company would need at least 30 acres to build a casino resort. He declined to discuss any specific sites, saying Odaiba and Tsukiji were among several locations that have “surfaced,” with Tokyo’s city government seeming to favor the area of reclaimed land in Tokyo Bay.
Odaiba, which lies about five kilometers from the business district around the city’s main train station, features shopping malls, the Tokyo Big Sight convention center, a 115-meter-tall Ferris wheel and the futuristic headquarters of Fuji Television Network. Tsukiji is more centrally located, near more train lines and adjacent to the Shiodome skyscraper district, where companies including Softbank and All Nippon Airways have their headquarters. It’s also adjacent to Hama Rikyu park, one of Tokyo’s most-visited traditional gardens.
“Tsukiji is closer to town, It’s Ginza, basically,” said Kenji Okamoto, managing director for Japan of Spectrum Asia, a gaming consultant. “Odaiba sounds more like Disneyland. It’s out there, but you can have all the fun there.”
Another big difference is that ownership of the developable sections of Odaiba is divided among several companies, while the Tsukiji parcel is wholly owned by Tokyo’s government.
“Land that’s owned wholly by the city that’s big enough may take less time to assemble than a piece of land that’s owned by multiple parties,” Bowers said.
Las Vegas-based MGM is among an A-list of global casino operators—Las Vegas Sands, Wynn Resorts, Melco Crown Entertainment and Caesars Entertainment among them—that have said they are prepared to spend billions to build a casino in the world’s third-largest economy.
It’s believed that bidders will all partner with Japanese companies, a list of prospective contenders that continues to grow. The latest to join it are Railway Keikyu Corp., which has set up a project team and is looking at Yokohama or Odaiba, and pachinko operator Dynam Japan Holdings.
Prime Minister Shinzo Abe’s Liberal Democrat Party is looking to pass a casino legalization bill during a special session of the National Diet this fall. If that happens it’s expected that follow-up legislation will be framed to create a licensing, regulatory and taxation framework for governing the industry in those cities and regions that express interest in hosting casinos. Reports are that three to five casinos will be licensed initially, one each in Tokyo and Osaka, the others allocated to tourist areas in economic need. Analysts believe the market could generate upwards of US$40 billion in gaming revenue out of the gate.
