Three Ways to Solve Urban Park Aging with Private-Sector Involvement [2026 Edition]

The majority of Japan's urban parks were built in concentrated waves during the high-growth era (roughly 1960s–70s). Facilities constructed during this period — restrooms, gazebos, playground equipment, management buildings, drinking fountains, and more — are showing clear signs of age, and many have now reached the point of requiring large-scale renovation or replacement.

According to the Ministry of Land, Infrastructure, Transport and Tourism, there are approximately 110,000 urban parks across Japan, covering around 130,000 hectares of land. The cost of maintaining and renewing this enormous stock of infrastructure is placing a severe burden on municipal finances.

The root cause of the severity of the aging problem is the concentration of the original construction timeline. Facilities built in large volumes over a defined period reach their renewal date simultaneously. As a result, large-scale replacement demand across parks nationwide is expected to converge during the 2020s and 2030s.

Yet maintenance budgets at many municipalities are chronically insufficient, and facility deterioration continues to advance without timely repair or replacement. Cases of aging playground equipment creating safety hazards have increased, and municipal staff are caught in the dilemma of ensuring park safety while working within severe fiscal constraints.

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Three approaches have proven effective in practice for addressing urban park aging through private-sector involvement.

Approach 1: Park-PFI (Public Solicitation Management System)

Park-PFI is a system established under the Urban Park Act (amended in 2017) in which private operators are permitted to install revenue-generating facilities (cafés, restaurants, sports facilities, etc.) in exchange for covering part or all of the construction cost of designated park facilities (restrooms, paths, plazas, etc.).

Key characteristics:

• A self-financing public-private partnership in which revenue from private facilities funds park improvements
• The installation permit period is extended to a maximum of 20 years (versus the standard 10 years), enabling long-term private investment
• Building coverage ratios are relaxed to up to 12% (versus the standard 2–5%), allowing the installation of meaningful-scale facilities

Best suited for:

• Parks with high visitation or strong footfall potential
• Locations with anticipated private-sector demand for food service, sports, or recreation
• Parks where aging facility renewal costs exceed what the municipality can cover alone

Basic cost-sharing structure (Koriyama City model): In the Kaiseizan Park project, Koriyama City adopted a structure in which the municipality covered up to 90% of designated park facility construction costs (approximately JPY 700 million), with the private sector bearing the remaining 10% or more. Revenue facilities (cafés, etc.) were funded entirely by the private sector.

Approach 2: Enhanced Designated Management

The designated manager system is a framework (Article 244-2, Paragraph 3 of the Local Autonomy Act) under which private businesses and NPOs are entrusted with the management of public facilities. "Enhancement" means evolving beyond conventional designated management (operations only) by incorporating private-sector investment in facility renovation and renewal.

Key characteristics:

• Develops from standard designated management (operations only) into a model that incorporates private investment in facility improvements
• Extending the designated management period (to 10–15 years) makes it possible for private operators to recover their investment
• A "cost reduction" variant exists in which the private sector bears renovation costs in exchange for a reduced designated management fee

Best suited for:

• Parks that already operate under the designated manager system
• Parks where private commercial demand is limited but management efficiency can be improved
• Smaller parks that lack the footfall potential needed for Park-PFI

Important note: The designated manager system is based on the Local Autonomy Act, not the Urban Park Act. As a result, the statutory special exemptions available under Park-PFI (20-year permits, relaxed building coverage ratios) do not apply. The conditions needed to incentivize private investment must be designed through individual agreements, requiring careful structuring.

Approach 3: Comprehensive Maintenance Outsourcing

Comprehensive maintenance outsourcing refers to the practice of consolidating park management functions — cleaning, landscaping, equipment inspection, repairs, etc. — that were previously contracted out separately by facility type and vendor, into a single contract with one company (or group).

Key characteristics:

• Eliminating fragmented contracting and centralizing comprehensive management reduces administration and operational costs
• Because the contractor manages facilities from a "preventive maintenance" perspective, there is a long-term effect of reducing repair costs
• Using a dialogue-based proposal process (proposal-based procurement) to select contractors allows municipalities to leverage private-sector expertise

Best suited for:

• Multi-park contexts where economies of scale apply
• Parks with high current management costs and significant room for efficiency improvement
• Groups of parks that lack the site conditions for private commercial facilities and are not well-suited for Park-PFI

Typical cost reduction range: Multiple municipalities that have introduced comprehensive maintenance outsourcing report 10–30% cost reductions compared to their previous fragmented contracting arrangements. However, the initial investment in specifications development and contractor selection does involve some upfront cost.

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The table below compares the three approaches across five dimensions: municipal cost burden, timeline, required private-sector demand, risk, and primary use case.

Combining Approaches

The three approaches are not mutually exclusive and can be combined. As demonstrated in Koriyama City, integrating Park-PFI (revenue from commercial facilities) with the designated manager system (overall park management) is particularly effective for large parks.

For smaller municipalities, a phased approach — first reducing costs through comprehensive maintenance outsourcing while simultaneously conducting market sounding to explore future Park-PFI adoption — is also a viable strategy.

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Park-PFI Success Case: Kaiseizan Park (Koriyama City, Fukushima Prefecture)

Over approximately four years starting in 2020, Koriyama City implemented a Park-PFI project at Kaiseizan Park (approximately 30.3 hectares), achieving the renewal opening of the western zone in April 2024.

The project selected "Kaiseizan Frontier Partners" — a consortium led by Daiwa Lease Group with three local firms — to operate a park that attracts approximately 1.4 million visitors annually. The municipality covered 90% of designated park facility construction costs (approximately JPY 700 million), with the private sector bearing the rest. Revenue facilities (five outlets including a café, bakery, and ramen restaurant, plus a multipurpose space) were funded entirely by the private sector.

Success factors: The three-stage sounding process (trial → preliminary → market) was instrumental in identifying motivated private operators early and refining the business conditions to reflect actual market demand. The bonus points awarded for sounding participation reinforced this early-engagement dynamic.

Enhanced Designated Management Case

An increasing number of municipalities are incorporating facility investment into long-term designated management contracts (10–15 years). Private operators managing facilities from a preventive maintenance perspective help avert large-scale emergency repairs, achieving both long-term cost reduction and sustained facility quality.

Comprehensive Maintenance Outsourcing Case

Several cities have introduced "cross-sector" comprehensive maintenance outsourcing — spanning parks, roads, drainage, and other facility types — achieving significant cost reductions. In addition to direct cost savings, cross-sector comprehensive outsourcing can have an organizational restructuring effect, enabling integration of the municipality's separate management divisions.

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Step 1: Understand the Current State of Your Park

Begin by assessing the current condition of the target park. Key information to gather:

• List of aging facilities and urgency of action (renovation cost estimates)
• Current visitor numbers and trends over time
• Breakdown of current management costs (direct management costs or designated management fees)
• Surrounding private-sector facilities and competitive environment

Step 2: Select an Approach

Use the following decision flow to select an approach:

Is private commercial demand for the park high?
  ├─ Yes → Annual visitors > 3 million → Park-PFI (large-scale model)
  │         ├─ Annual visitors 1–3 million → Park-PFI (standard model)
  │         └─ Annual visitors 0.5–1 million → Park-PFI (small-scale) — confirm with sounding
  └─ No  → Is a designated manager system already in place?
              ├─ Yes → Consider enhancing designated management (longer term + investment integration)
              └─ No  → Start with comprehensive maintenance outsourcing

Step 3: Confirm Market Viability through Market Sounding

For both Park-PFI and enhanced designated management, confirming private-sector appetite for entry through advance market sounding is essential.

A two-stage sounding process is recommended (in line with MLIT guidelines):

1. Stage 1 (concept development): Present the park's overview and challenges; gather private-sector ideas and gauge interest in participation
2. Stage 2 (project planning): Present a draft business scheme and solicitation conditions; confirm specific entry requirements

→ For detailed guidance on how to conduct market sounding, see Park-PFI Market Sounding Practical Guide.

Step 4: Engage an Advisory Firm

Exploring Park-PFI or enhanced designated management requires specialized PPP/PFI expertise. Even smaller municipalities can engage consultants using national government support programs (such as national support for public-private partnership feasibility studies).

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Guidelines for Improving the Quality of Urban Parks through Park-PFI (Revised May 30, 2025) (2025)

MLIT Park-PFI Utilization Page (Case Studies and Usage Data) (2025)

Koriyama City Park-PFI Project (Kaiseizan Park) (2024)

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• Complete Guide to Park-PFI — Overview of the mechanism, special exemptions, and full process
• How to Write Park-PFI Solicitation Guidelines — From the ten required legal items to using the MLIT template
• Park-PFI Full Process Roadmap — A four-year timeline from concept to opening
• Park-PFI vs. Designated Manager System — Detailed criteria for choosing between the two systems