How a local community redeveloped and revitalized a much-loved and historic shopping district.
One of the indicators of life in a local city is the vibrancy of its central shopping area: the shopping street is the face of the city.
Many shops on shopping streets have shut down due to the economic slump. The sight of darkened arcades and rows of vacant stores provides evidence of the loss of vitality in regional cities.
However, there is one exceptional shopping district that was revived and emerged from the crisis of shutting down. It is Marugame-machi in Takamatsu, Kagawa Prefecture, on the island of Shikoku.
Along the arcade with its glass-covered roof, luxury brands, fashionable variety stores and branches of national chains stand side by side. I felt as if I were strolling around chic Aoyama in Tokyo.
In 1988, Marugame-machi shopping district started taking on a challenge.
At the peak of the bubble economy, the shopping area was performing well and enjoyed ever-increasing sales. During that time, when everyone undoubtedly believed in a bright future, one man felt a strong sense of crisis.
Kaniwa Yukio, the owner of a bag shop, served as president of Takamatsu Marugame-machi Shopping Street Promotion Association at that time.
Since there were no ways other than vessels to transport products between the main islands of Shikoku and Honshu, general merchandise stores funded by the major brands had not advanced to Shikoku. But in 1988, the Great Seto Bridge opened. Then Kaniwa started thinking differently from the past; that the shopping area could lose business to possible competitors.
Kaniwa gradually got two young men involved.
One man was Furukawa Kozo, executive director of the Shopping Street Promotion Association (current president) and the second son of the owner of Nodaya Electric, an old electronics store, who had returned to his hometown after working in another city. The other man was Akashi Mitsuo, director of the Shopping Street Promotion Association and the son of a shoe store owner, who would then change his job to an udon noodle shop owner. They played a key role in the revitalization of Marugame-machi shopping street.
As Kaniwa predicted, the number of passersby in Marugame-machi shopping street drastically declined in the 1990s and sales dropped by more than a half. In response to this situation, the shopkeepers took a stand.
The three men established Takamatsu Marugame-machi Town Development Company based on the Central City Invigoration Law that came into effect in 1999. It was the first initiative of its kind in Japan.
The Shopping Street Promotion Association paid 95% of the cost, and reduced the investment ratio by Takamatsu City to 5%, which helped it to maintain independence from residents.
One groundbreaking aspect was that they developed a mechanism to separate the right of property from the right to use the land in the shopping area.
First, the jointly funded company of each town unit established by the landowners of the shopping area signed a fixed-term leasehold contract with the landowners and acquired the right to use the land over the next sixty years. In other words, instead of building every single building in the redevelopment program, they jointly planned how to use the land and constructed a commercial building, with an aim to create an attractive town.
They collectively entrusted the business, such as the maintenance of the commercial building, a reasonable tenant mix and efficient operations, to the Town Development Company as the expert group.
Furukawa and the others’ biggest difficulty was fighting against regulatory barriers, such as the City Planning Act, Building Standards Act, Road Traffic Act and Investment Act.
Although they asked Takamatsu City Office for consultation about the redevelopment of the shopping area, they were turned away at the door with a parting shout of, “No revitalization plan is needed!” They brought the case to the Prefectural Government Office, but the officers refused to listen to their idea. Then Furukawa dared to visit the Ministry of International Trade and Industry (the current Ministry of Economy, Trade and Industry).
Fortunately, young bureaucrats at MITI showed an interest and introduced him to first-line specialists with novel ideas as well as academic experts from various fields, such as urban planning, commerce, distribution and finance.
Included were Saigo Mariko, an urban planner specializing in the management method of resident-driven town development, Kamata Kaoru, current president of Waseda University who provided the idea of a fixed-term leasehold, Matsushima Shigeru, the former chief of the Policy Planning Division, Small and Medium Enterprise Agency, who introduced the concept of the Town Development Company and later became a professor at Tokyo University of Science.
With the support of this group of people, they came up with the redevelopment plan for Takamatsu Marugame-machi shopping district in 1990. They divided the shopping street with a total length of 450 meters into seven districts, from A to G, and worked on the development in a stepwise fashion. In 2006, they finally reached the point where they could unveil A block, reminiscent of Aoyama, as mentioned above.
In addition to the revitalization of the shopping area, they established Marugame-machi Hospital, a clinic operated by the residents’ association, on the 4th and 5th floors of the building. They invited doctors from Jichi Medical University to create a mechanism to provide home care to residents in the condominiums.
We have much to learn from the Marugame-machi system. The leaders boldly took on challenges to voluntarily redevelop the town through continued resident-driven efforts, instead of entrusting it to major developers who have traditionally prioritized efficiency and sought economic justification.
KATAYAMA Osamu is an economics journalist and representative of K-Office. He has published extensively, including Sumato kakumei de seicho suru Nihon keizai (Growing the Japanese Economy with the Smart Revolution), and Naze Za Puremiamu Morutsu ha uretsuzukeru noka? (Why does The Premium Malt’s beer sell so well?). Recent publications include Samsun kuraishisu (The Samsung Crisis).