What Is Park-PFI (Public Solicitation Management System)? A Complete Guide to the Framework, Benefits, and Case Studies

Park-PFI (the Public Solicitation Management System) is a framework established by the 2017 amendment to the Urban Park Act (Articles 5-2 through 5-9 of the Act).

The core concept is the integration of revenue and improvement. Operators of revenue-generating facilities (solicited park facilities) such as cafes, restaurants, and shops are selected through competitive solicitation, and their revenue is used to fund the development of surrounding park infrastructure (designated park facilities) such as paths, plazas, and benches. By leveraging private business expertise and earning power, parks can be improved in quality while minimizing the financial burden on municipalities.

Previously, installing revenue facilities in urban parks required permits, but those permits lasted a maximum of 10 years — a structure that made it difficult for private operators to recoup long-term investments. Park-PFI solved this constraint through institutional design.

As of March 31, 2025, Park-PFI has been applied in 165 parks nationwide, with 136 additional parks currently under consideration. It has become the most significant public-private partnership tool in urban park management.

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Multiple project methods exist for activating and managing urban parks beyond Park-PFI. Understanding how Park-PFI is positioned among them is essential.

The most distinctive features of Park-PFI compared to other methods are its permit length and the fact that it is paired with an improvement obligation. The 20-year permit allows private operators to build business plans that recover large upfront investments. Meanwhile, the improvement obligation (constructing designated park facilities) guarantees a tangible public benefit.

Note that for idle public facilities other than parks, a separate framework called Small Concessions exists for small-scale PPP/PFI projects with total costs under approximately 1 billion yen. The differences are discussed later.

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The greatest appeal of Park-PFI lies in three special provisions unavailable under standard installation permits. These are critical institutional incentives that determine whether private operators can justify participation.

Special Provision 1: Extension of Installation Permit to 20 Years

While a standard installation and management permit (Art. 5, para. 1) lasts a maximum of 10 years, receiving Park-PFI certification effectively extends this to up to 20 years.

However, all of the following conditions must be met to qualify:

1. Selected as the "designated installation party" through the competitive solicitation process under Article 5-2.
2. Submission of a public solicitation installation plan and receipt of certification meeting the requirements of Article 5-4.
3. The certification validity period must be specified in the public solicitation guidelines.
4. The plan must include construction of designated park facilities (revenue facilities alone do not qualify).

The fourth condition is crucial. A plan focused solely on installing a cafe or shop does not qualify for the 20-year provision. Paired development of park infrastructure is a prerequisite.

After the permit period ends, two options are available. Choosing re-solicitation (continuing Park-PFI) allows the 20-year provision to apply again, but transitioning to a standard permit (Art. 5, para. 1) reduces the term to a maximum of 10 years and eliminates the site coverage provision.

Special Provision 2: Site Coverage Increase to 12%

The reference standard under the Urban Park Act for building site coverage is normally 2%, but facilities receiving Park-PFI certification can access a 10% supplemental provision, raising the maximum to 12%.

An important note: the figures above are reference standards under national law. The actual figures applied are those set by each municipality's local ordinance. Also, the supplemental coverage for recreational facilities and solicited facilities is shared up to a combined 10%, which requires attention when both coexist.

Special Provision 3: Expanded Occupancy Facilities

Convenience-enhancing facilities such as bicycle parking, signboards, and advertising towers — ordinarily prohibited in urban parks — may be installed as occupancy facilities when included in a Park-PFI plan. This allows private operators to diversify their revenue streams.

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Park-PFI commercialization spans multiple phases from initial consideration to opening. The role and key considerations of each phase are outlined below.

Phase 0: Momentum Building and Internal Organizational Preparation

This begins with explaining the Park-PFI framework to the mayor, assembly, and relevant departments. When broader understanding of PPP/PFI is limited internally, this phase often takes the most time. Site visits to pioneering municipalities and attendance at national government briefings are effective approaches.

The national government provides cost support for market soundings and feasibility studies under "support for PPP/PFI investigation in urban parks."

Phase 1: Market Sounding

The MLIT guidelines recommend conducting market soundings in two stages: at the project conception stage and at the feasibility study stage.

• Step 1 (Project Conception Stage): Confirming market viability and gathering private-sector ideas. Information such as park overview, drawings, current site coverage ratio, and policy for handling existing facilities is shared.
• Step 2 (Feasibility Study Stage): Disclosing draft solicitation conditions and confirming intent to participate. Input on usage fee levels and designated facility construction cost targets is also collected.

The Kaiseizan Park project in Koriyama City developed this further into a three-stage design: trial sounding → pre-sounding → market sounding. Solicitation bonus points were awarded to sounding participants (5 points for trial sounding, 3 points for market sounding), functioning as an incentive structure to encourage early private-sector involvement.

Phase 2: Drafting and Publishing the Public Solicitation Guidelines

The public solicitation guidelines have statutory required contents (Article 5-2, para. 2, items 1–10). Key items include:

Under law, the deadline for submitting plans must be set at at least one month after the guideline publication date.

Phase 3: Solicitation, Review, and Selection

Selection follows a two-stage structure.

Stage 1 (Screening): Confirmation of conformity with the guidelines, verification of construction and operational certainty (objective materials), technical screening (track record), and financial capability assessment (no net liabilities in the most recent financial statements).

Stage 2 (Evaluation): Only applications passing screening proceed to quantitative scoring across 6 evaluation categories. The law requires an evaluation and selection committee comprising at least two members with academic expertise.

The six evaluation categories are:

Notably, category ② includes the participation of local businesses. This creates a design advantage for "mixed consortiums" — where a major operator leads but local landscaping, construction, and content companies are incorporated — reflecting an evaluation structure that rewards regional integration.

Phase 4: Certification, Agreement, and Permitting

After selection as the designated installation party, the process continues with: submitting the public solicitation installation plan for certification → executing a basic agreement → obtaining the installation management permit. Building Standards Act Article 48 permits (use district restrictions) may also be required, and where the Designated Management System is combined, a municipal assembly vote is necessary.

Phase 5: Construction and Opening

Construction of designated park facilities and revenue facilities proceeds, leading to the project opening. In the Kaiseizan Park case in Koriyama City, the timeline from project start (March 2020) to opening (April 2024) was approximately four years.

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Kaiseizan Park, Koriyama City (Representative Case)

The Kaiseizan Park project is one of the most widely referenced Park-PFI cases nationally, combining Park-PFI with the Designated Management System in an integrated model.

• Scale: Approximately 12.89 ha total (west area 119,900 m² + 3 adjacent neighborhood parks totaling 9,000 m²)
• Operator: Daiwa Lease Group (Kaiseizan Frontier Partners)
• Installation permit term: 20 years from the start of the certified plan
• Designated management fee cap (19-year total): 1.44 billion yen (approximately 75.87 million yen per year)

The consortium was led by Daiwa Lease (Daiwa House Group), joined by four local landscaping, construction, and content companies — a mixed composition designed to score well on evaluation category ②.

Cases in Small Municipalities

In July 2024, the Japan Park and Greenery Association held the first-ever training session titled "Park-PFI Case Studies in Small Parks." The cases presented demonstrate that Park-PFI is not limited to large cities or large parks.

The Ninohe City case is particularly notable: a municipality with a population of approximately 23,000 was able to establish a revenue pillar by combining local hot spring resources. The Mutsu City nursery case is also a pioneering model for Park-PFI using non-food-service business types.

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When considering Park-PFI, it is important to clearly understand how it differs from Small Concessions. The two are often confused, but they are separate frameworks.

The most fundamental difference is the target facility. Park-PFI applies only to "urban parks" subject to the Urban Park Act and is a framework specialized for installing and managing park facilities. Small Concessions, by contrast, is a broader concept targeting "idle public real estate other than urban parks," such as closed schools, old town halls, and traditional townhouses.

The two frameworks are not in competition — they are complementary, differentiated by the type of target facility. When a municipality wants to activate a park, Park-PFI is the appropriate tool; when the goal is to activate a closed school or traditional townhouse, Small Concessions is the appropriate framework.

For more on Small Concessions, see What Is a Small Concession? A Complete Guide for Local Government Officials.

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Three national government support programs are available for Park-PFI commercialization:

1. Social Capital Development Grant: National subsidy for designated park facility construction costs
2. Urban Development Fund (Vitalization Promotion Project Funds): When local governments lend funds to operators, the national government provides interest-bearing loans covering up to 50%
3. Feasibility Study Support: National cost support for market soundings and feasibility investigations

These programs can substantially reduce the municipal financial burden associated with designated park facility construction. In the Koriyama City Kaiseizan Park case, the cost-sharing structure set was: municipality burden up to 90% of designated facility construction costs (approx. 630 million yen), with private operator bearing at least 10% (approx. 70 million yen).

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Practical first steps for commercializing Park-PFI:

1. Identify candidate parks: Among the urban parks managed by your municipality, identify areas where revenue facility installation is viable. Assess location characteristics (foot traffic potential), existing facility conditions, and current site coverage ratios.

2. Read the MLIT guidelines carefully: The MLIT guidelines provide specific guidance on guideline content requirements, evaluation criteria, and how to conduct soundings.

3. Conduct a market sounding: Confirm private-sector interest before soliciting. Preventing "zero applications" after launching the solicitation process is the top priority.

4. Select an advisory firm: Particularly for a first Park-PFI implementation, it is practical to engage PPP-specialized advisors for drafting the public solicitation guidelines and designing the evaluation criteria.

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The lessons from case studies are valuable, but results are not guaranteed to replicate in your park. Location characteristics, catchment population, existing facility conditions, and private-sector demand — without clarifying these baseline conditions, launching a solicitation process risks receiving zero applications.

ISVD offers free consultations to help municipalities clarify their baseline conditions and co-design optimal public-private partnership frameworks for park activation.

References

Park-PFI Utilization Guidelines (Revised May 30, 2025) (2025)

Park-PFI Implementation Status (as of March 31, 2025) (2025)

Koriyama City Kaiseizan Park Park-PFI Project Public Solicitation Guidelines (2022)

Koriyama City Kaiseizan Park Park-PFI Project (Official Page) (2022)

PPP/PFI Action Plan (FY2025 Revision) (2025)