Even though an early end to the COVID-19 pandemic cannot be expected, foreign investment in development of the resort area of Kutchan Town is maintaining momentum. It seems that development movements looking ahead to the next few years have become particularly active in recent months. The building regulations, which the town is currently considering and plans to begin enforcing as early as next summer, require that the two challenges of landscape conservation and sustainable development be met simultaneously.
This year, there has been a constant stream of large-scale development plans in the town, including a project by Suncity Group—a major casino operator in Macau—to build a hotel and villas on a 20-ha site in the Yamada district, and a plan by Hong Kong-affiliate real estate developer Super Okusan to build a new hotel on the site of the former Niseko Weiss Hotel. In most cases, the opening of such facilities is scheduled for two to four years from now. The competition to acquire guests following the end of the COVID-19 pandemic has already begun.
The town’s consideration of tightening building regulations is proof that pressure from developers is increasing more than expected, as seen through the regional expansion of development and the increase in investment, which have become apparent in recent years.
Going forward, the town plans to concentrate resort facilities around ski resorts as bases. As for the Hirafu District, which has up until now been the center of development, plans are in place to encourage domestic and foreign investment in rebuilding aging accommodation facilities to improve the quality of the area as a tourist destination.
Meanwhile, the policy for districts that are undeveloped and have an abundance of nature is to reduce the construction volume by setting an upper limit on the total floor area. This is to prevent sprawl and strengthen social infrastructure in the central area as well as to preserve the landscape, which is a regional characteristic.
Nearly 10-billion-yen worth of infrastructure projects are planned for the next few years. The water supply facilities in the Yamada district are slated to be enhanced by FY 2027 at a cost of 7,226 million yen. The national treasury subsidy is assumed to be about 20%, and the rest is expected to be covered by the issuance of water services enterprise bonds. For the reorganization of the Hirafu first parking lot, which is positioned as a symbol gate, the possibility of introducing private-sector vitality, such as PFI, is being explored. The project is estimated to cost billions of yen.
The burden is heavy for a municipality with a population of 15,000 and whose financial base with an initial budget of 12 billion yen is by no means strong. It will be important to put an end to sprawl with new building regulations and promote intensive infrastructure development.
Meanwhile, it is not desirable for development investment to decline more than expected due to excessive regulations. Achieving both conservation of the natural environment and sustainable development is a challenge for many international resorts. The town must set an optimal standard that will make it possible to solve the issue while referring to the opinions of local residents, the tourism industry, and developers.
(Excerpt from an article on September 8, 2021)
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