Following the abrupt end of the Wakayama IR bid, governor Yoshinobu Nisaka has offered some insight as to what may have brought these events around. Originally, Wakayama was one of the favorites to bid for an integrated resort project on its territory, seeing it as a vital part of its further economic development and a good short-term way to restore parts of its infrastructure.
These ambitions though came short of the mark after the Wakayama IR project was voted as a no-go due to fears over the lack of clarity in financial details presented by the contractors hoping to gain access to the development project through Wakayama. Nisaka explained that the prefecture was unable to proceed and thus had lost a JPY470 billion (roughly $3.6 billion) project.
He argued that this missed opportunity had the potential of increasing Wakayama residents’ income by 10% annually. Nisaka admitted that there was a division in the Wakayama Assembly, with half of the representatives voting for, but the other half and a few more opposing the idea altogether.
The Canadian investment firm Clairvest had failed to provide sufficient proof that it would be able to finance the project adequately and on time. Clairvest had argued that even though some of the documentation was lacking, it was well on track to securing the capital it needed to see the project through.
Clairvest also has a proven track record in developing projects on such scales. However, Nisaka argued even the reputation of Clairvest, and Credit Suisse, could not sway the opposition because of some lacking last-minute details that representatives wanted to see.
Clairvest did provide a commitment letter, but those against the arrangement said that this letter is not legally binding and "cannot be trusted." Nisaka regretted this as he had assurances that both Credit Suisse and Clairvest were already ahead of schedule in securing the funding and negotiating the initial amounts that would be needed to begin development.
Nisaka though thanked Clairvest for the tremendous efforts done to see the Wakayama bid through, even if it fell short of the mark for the first round of license applications. There will be a total of three license applications in Japan, with the next projects coming over the years. While Wakayama won’t be applying for the first round, Nisaka is hopeful that the $3.6-billion project may one day reach the prefecture.
While he admits to some legal challenges in implementing the project, he also acknowledges that a $3.6-billion investment of any type but an integrated resort in Wakayama would be impossible.
Image credit: G3 Newswire