Revenue Opportunities from Value Capture
A joint session by APTA and JITI hosted during APTA's 2019 Rail Conference
Tuesday, June 25th, 2019
Sheraton Centre Toronto Hotel
123 Queen St W, Toronto, ON M5H 2M9, Canada
Summary of the event
In October 2018, at the headquarters of the American Public Transportation Association (APTA) in Washington D.C., a meeting was held between Mr. Shukuri, the Chairman of JTTRI and JTTI in Washington, D.C., and Mr. Skoutelas, Chairman of APTA. An agreement was reached on strengthening cooperation between the two organizations. This co-hosted session was the first project that came into reality from this idea.
In the United States, cities have been formed with a dependence on cars due to the abundance of land and a historical progression towards building roads for motor vehicles. However, in recent years railways have been developed from the perspective of improving urban sustainability, advancing countermeasures for traffic congestion, and so on. Public transport-oriented urban development, such as railways, has been advocated and put into practice (Transit-Oriented Development, TOD). In addition, Value Capture, or the usage of development profits for transportation advancement, has been attempted in various ways as a part of TOD. In this co-hosted session, we took the opportunity of APTA's 2019 Rail Conference to invite railway operators from Japan and North America, and discussed successful cases of urban railway and rail-side development, and the challenges for business promotion.
Mr. Yuji Murakami from East Japan Railway Company and Mr. Kantaro Yamaguchi from Tokyu Corporation gave talks on the development of the areas along the railway lines and around the stations, and also plans for the future.
[Main points of the lecture by Mr. Yuji Murakami, Manager, Life-style Business Development Headquarters (Shinagawa and Large-Scale Developments Department), East Japan Railway Company]
After giving an introduction of the East Japan Railway Company, Mr. Murakami explained about the organizational set-up, outline and vision for growth of their stations’ yard businesses, shopping centers, offices, hotels, advertising businesses, and life service businesses, including revitalizing local cities around stations.
In addition, he used JR East’s work at Tokyo Station as an example of Value Capture. In order to restore the 100 year old historical Marunouchi station building, they transfered usage of the surplus space above the station to the surrounding buildings. Then they used profits gained from this transfer for the restoration efforts.
Furthermore, he also used the Shinagawa development project as an example. As a means for public transport-oriented city development, he talked about JR East’s ①development of public transportations, such as building the new Takanawa Gateway station and the creation of connections to buses and taxis, ②building of a pedestrian deck to improve walkability, and ③promotion of the development of complex urban functions such as offices, commercial facilities, hotels and convention buildings.
[Main points of the lecture by Mr. Kantaro Yamaguchi, Manager, Urban Management Strategy Headquarters, Tokyu Corporation]
After giving an introduction of Tokyu Corporation, Mr. Yamaguchi explained that there is a large number of public transport users in Japan, as is evident in the fact that in a ranking of the world’s stations with the most passengers, Japanese stations are listed in 17 of the top 20 stations. This, in addition to railways being profitable and having a positive impact on real estate businesses, are reasons why private railway operators in Japan can promote sustainable development along the railways.
Also, with respect to the redevelopment of Futako-tamagawa Station, which is one of the largest projects led by private companies in the Tokyo metropolitan area with a total area of approximately 11 hectares, new functional spaces, such as places of work and recreation, were added to excellent businesses and housing. This resulted in greater improvements in many ways, such as in higher asset values, profit, and increases in the number of transit personnel.
Furthermore, using Shibuya Station as an example, which has expanded with the addition of 4 companies and 9 lines, redevelopment was carried out to solve various problems such as transfers, traffic squares, and city divisions. He also talked about the progress of the development of places and communities where diverse people meet.
【Main points of panel discussion】
An active exchange of ideas took place, including discussion on measures to reduce the risk of fluctuations in the real estate market for railway operators, how railway operators provide for affordable housing, the importance of dialogue between railway operators, local public organizations, private operators, etc. in rail-side development and other projects.
On the day, Ms. Jane Williams, Acting Administrator, Federal Transit Administration and Ms. Takako Ito, Consul-General of Japan in Toronto, made Honorable Guest Remarks. The event was attended by approximately 140 people, including guests from the U.S. Department of Transportation (DOT), the Consulate General of Japan in Toronto, public transportation organizations in North America and Japan, and members of the Toronto Japanese Association of Commerce & Industry members.