Park-PFI and the Municipal Assembly — When Ordinance Revision Is Required and How to Explain It [2026 Edition]

The implementation process for Park-PFI (the Public Solicitation Management System) involves assembly participation at multiple stages. One of the most common oversights among staff is failing to clarify "when and what type of resolution is needed," which can disrupt the deliberation schedule.

The three primary stages at which assembly approval is required are as follows.

Stage 1: Establishing the Placement and Management Permit Ordinance (Resolution for Ordinance Enactment/Amendment)

To utilize the publicly solicited management system based on Article 5-2 of the Urban Park Act, it is necessary to establish an ordinance (or regulation) defining the solicitation standards, procedures, and permit conditions.

Most municipalities revise their existing "Urban Park Ordinance" or "Urban Park Management Ordinance" to add relevant provisions. However, some municipalities enact a standalone "Placement and Management Permit Standards Ordinance." The appropriate approach is determined through coordination with the existing ordinance structure and the legal affairs division.

Since ordinance amendments and enactments require assembly resolutions, it is advisable to begin coordination with the legal affairs section and the assembly secretariat at least six weeks before the plenary session.

Stage 2: Designated Manager Appointment Resolution (When Combined with Designated Manager System)

When Park-PFI is implemented in combination with the Designated Manager System (as in the Koriyama City Kaiseizan Park model), the appointment of a designated manager requires an assembly resolution under Article 244-2, Paragraph 6 of the Local Autonomy Act.

When solicitation for designated managers and Park-PFI are conducted as a single integrated process, the timing of presenting selection results to the assembly is critical. It is common practice to submit supporting documentation including the basis for management fee calculation and projected business financials.

Stage 3: When Urban Planning Changes Are Involved (e.g., Building Coverage Ratio Relaxation Zone Designation)

When the designation of a "Specific Park Facility Placement and Management Zone" — which raises the building coverage ratio to a maximum of 12% — requires an urban planning change, deliberation by the urban planning committee may be needed in addition to explanations and reports to the assembly. Prior coordination with the urban planning division is essential.

→ For details on the three special exemptions under Park-PFI, see the Complete Guide to Park-PFI.

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Ordinance response related to Park-PFI falls into three broad patterns. The appropriate pattern varies depending on the municipality's size, existing ordinance structure, and the policy of the legal affairs division.

Pattern A: Partial Amendment of the Urban Park Ordinance

The most common approach is to add provisions relating to the public solicitation management system to an existing "Urban Park Ordinance" or "Urban Park Management Ordinance."

Key provisions typically added:

• Application requirements for placement and management permits
• Basis for establishing a selection committee
• Obligations for delivering designated park facilities
• Provisions on permit cancellation and modification

Since this approach amends an existing ordinance, it is easier to frame for the assembly as an "expansion of the existing system" rather than "introducing something entirely new." Coordination with the legal affairs division tends to proceed relatively smoothly.

Pattern B: Establishment of a New Placement and Management Permit Standards Ordinance

A standalone ordinance dedicated to Park-PFI is enacted separately from the Urban Park Ordinance. This approach is more commonly chosen for large-scale projects requiring a high degree of procedural transparency or for package-style projects spanning multiple parks.

While assembly deliberation tends to be thorough, the precision requirements for ordinance text are high and legal drafting takes time. Consistency with existing ordinances must also be verified. A minimum preparation period of three to four months should be anticipated.

Pattern C: Amendment of the Designated Manager Ordinance (Integrated Solicitation Type)

When Park-PFI is implemented in an integrated manner with the Designated Manager System, it may be necessary to revise the existing "Designated Manager Ordinance" or "Public Facility Management Ordinance." The typical form is adding provisions specifying that the Park-PFI operator also serves as designated manager.

Comparison of the three patterns:

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The most important aspects of assembly deliberation are clearly explaining "why Park-PFI is necessary," "how it affects municipal finances," and "what justifies leasing public assets to private entities." These are organized along three axes: fiscal neutrality, private investment recoverability, and public benefit requirements.

Axis 1: Explaining Fiscal Neutrality

The issue council members are most sensitive to is "how public funds are being used." In the case of Park-PFI, it is effective to use charts and comparison tables to illustrate the structure in which private operators bear the cost of park facilities (restrooms, pathways, plazas, etc.) in exchange for permits to establish revenue-generating facilities.

Example document structure:

• Comparison table: "Conventional development (fully publicly funded) vs. Park-PFI (partial cost shift to private sector)"
• Estimate of projected reduction in public expenditure (for restroom construction, the public funding burden of ¥20–40 million per unit is shifted to the private sector)
• Estimate of revenue from placement fees and occupation fees (typically tens of millions to hundreds of millions of yen annually)

Axis 2: Private Investment Recoverability

In preparation for the question "why is a 20-year permit necessary?", prepare materials that explain the private sector's investment recovery model in accessible terms. Compare typical capital investment amounts for cafés and sports facilities (¥5 million to ¥200 million) with projected revenue over 20 years.

Ensuring council members understand the private sector's rationale — that investment is not viable without a long-term permit — forms the justification for the 20-year permit exemption.

Axis 3: Ensuring Public Benefit Requirements

In response to the criticism that "this only benefits the private sector," clearly present the concept of Value for Money (VFM) — a fundamental principle of PPP/PFI — alongside the obligation to deliver designated park facilities as the "public benefit requirement."

Specifically, summarizing in a single diagram "what the private sector will build" (facility list), "how build quality is ensured" (selection criteria and specifications), and "how assets are returned after 20 years" (restoration obligations and rights expiration) tends to deepen council members' understanding.

Recommended Page Structure for Briefing Materials

1. Project Overview (1 page): Diagram of the Park-PFI mechanism. The exchange structure between revenue facilities and designated park facilities
2. Fiscal Impact (1 page): Cost comparison with conventional development
3. Project Schedule (1 page): Timeline from market sounding to opening
4. Permit Conditions and Public Benefit Requirements (1 page): Overview of designated park facility list and selection criteria
5. Examples from Other Municipalities (1 page): Overview of successful cases from comparable municipalities
6. Risk Management (1 page): Response to operator withdrawal, restoration obligations

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Below are frequently occurring question patterns in assembly deliberations and committee inquiries, along with practical response examples.

Q1: "Isn't this crowding out private businesses?"

Response: "Regarding competition with existing private businesses, our market sounding will assess the surrounding commercial environment and establish conditions for business types and locations that avoid competition. The MLIT guidelines also require competition avoidance measures in operator selection, and this will be stated explicitly in the solicitation guidelines."

Q2: "If the operator generates a profit, can the city receive a share?"

Response: "The city receives annual placement and occupation fees as consideration for the permits. Some municipalities have also adopted revenue-linked fee structures (a percentage of sales), allowing the city's share to grow proportionally as revenue increases."

Q3: "Isn't a 20-year permit too long?"

Response: "Capital investment in food service facilities — interior fittings, kitchen equipment, etc. — typically ranges from ¥5 million to ¥20 million, and investment recovery is difficult under a standard 10-year permit. The extension to 20 years is a special exception authorized under Article 5-4 of the Urban Park Act, with a clear legislative basis for enabling long-term private investment."

Q4: "Shouldn't parks be free to use?"

Response: "The basic principle of free park access is maintained. Revenue-generating facilities (cafés, sports facilities, etc.) involve discretionary use for which visitors pay. At the same time, the private revenue is used to raise the overall maintenance standard of the park, improving the quality of free public spaces (restrooms, plazas, etc.) available to all."

Q5: "What happens to park facilities if the operator withdraws midway?"

Response: "Operators are required to restore the premises to their original condition, and designated park facilities (restrooms, pathways, etc.) established by the private sector become municipal property upon the expiration of the permit period. A security deposit (a percentage of the project cost) will also be set to prepare for the contingency of withdrawal."

Q6: "How is transparency and fairness ensured?"

Response: "The solicitation and selection process will be conducted publicly, with evaluation performed by a selection committee that includes at least [X] external experts. Selection criteria, evaluation items, and results will be published, and explanations will be provided to unsuccessful applicants."

Q7: "When will residents be informed?"

Response: "After drafting the solicitation guidelines, we will conduct a 30-day public comment period and reflect resident feedback in the conditions. Briefing sessions for local neighborhood associations and user groups will also be held before solicitation begins."

Q8: "Are there failure cases in other municipalities?"

Response: "There are cases where solicitations were conducted with zero applicants. To prevent this, we will implement the two-stage market sounding recommended by MLIT guidelines to confirm private-sector interest and project viability in advance."

Q9: "Doesn't the building coverage ratio relaxation (12%) reduce park greenery?"

Response: "The relaxation of the building coverage ratio applies only to the specific zone designated for revenue-generating facilities. Green spaces and plazas outside the zone are maintained under current standards. The designated park facilities — pathways, plantings, etc. — constructed by the private sector also supplement the overall greenery of the park."

Q10: "What is the difference from a concession arrangement?"

Response: "A concession (operating rights system) involves selling or granting private entities the right to operate a facility itself, and is used for sewage systems, airports, and similar infrastructure. Park-PFI is a placement and management permit based on the Urban Park Act; the municipality retains overall park management authority, and the private sector only establishes and manages the permitted revenue-generating portion."

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In introducing Park-PFI, the design of how to sequence assembly deliberations with public hearings and public comment periods is critical to successful consensus building.

Recommended Sequence

The standard sequence most conducive to smooth consensus building is as follows:

1. Feasibility study (internal review)
2. Coordination with relevant internal divisions (urban planning, finance, legal affairs)
3. Market sounding (targeted at private businesses)
4. Initial briefings with user groups and neighborhood associations (informal)
5. Drafting of solicitation guidelines
6. Public comment period (30 days)
7. Public hearings (reflecting public comment results)
8. Submission to assembly of ordinance revision proposal and solicitation guidelines
9. Assembly deliberation and passage
10. Solicitation begins

By holding public hearings before assembly submission, the proposal can be presented to council members as "a plan shaped by resident input." It is important to share information proactively with both residents and the assembly to avoid the perception that "residents are supportive but the assembly is blocking."

Using Public Comment Results

Public comment results can be used as supplementary materials in assembly briefings, establishing the legitimacy of "reflecting residents' voices." If there is significant opposition, consider revising solicitation conditions — but it is important to analyze not just the number of objections but their underlying reasons, and to report to the assembly after distinguishing between issues that can be addressed and those that cannot be modified under the existing framework.

The Importance of Pre-Session Council Briefings

Pre-briefings (lectures) to the relevant standing committee (construction, environment, etc.) prior to plenary submission should not be skipped. By holding individual briefings with committee chairs and caucus representatives in advance, unexpected controversy at the plenary session can be prevented.

→ For market sounding design, see Park-PFI Market Sounding: Three-Stage Design and Implementation.

→ For Park-PFI implementation cases in small municipalities, Park-PFI Small-Scale Case Guide is also useful.

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References

Urban Park Act (Act No. 79 of 1956), Articles 5-2 through 5-9 (2017)

Park-PFI Utilization Guidelines (May 2025 Revision) (2025)

Park-PFI and Related Utilization (2025)

Local Autonomy Act, Article 244-2 (Designated Manager of Public Facilities) (2023)