Institutional Change and Unplanned Shopping
District Re-vitalization in Japan
Taotao Bi-Matsui Department of Economics, Keiai University, Japan
Introduction
Shotengai, the unplanned shopping district, is a typical form of retailing in Japanese cities. It has developed in two primary ways:（1） the proliferation of small retailers and services in areas that experienced increases in population during the first two decades of the twentieth century（Suzuki 1980; Ishihara 1985）; and（2）black markets that appeared near main railway stations following World War II and de-veloped into shopping districts by the 1950s（Ishihara 2004）.Unplanned shopping districts located in front of railway stations, in neighborhoods or in historical commercial centers function as the“Japanese equivalent
of the shopping mall”（Sorensen 2002, p.195）in cities. Most businesses
in unplanned shopping districts are small independent local retailers or
restaurants,1 ）many of which are operated by the property owners
themselves.
Improving upon the unplanned shopping districts where small and medium retailers are concentrated has been an important strategic goal for the Japanese government in the postwar period. However, the policies implemented to achieve this goal underwent a major change in 1998 when the Ministry of International Trade and Industry（MITI）, now the Ministry of Economy, Trade and Industry（METI）,enacted the Act on the Improvement and Vitalization in City Centers（AIVCC）.The
Act differs from former policies in two main ways. First, the AIVCC advocates letting the municipalities and local organizations initiate the plans. This differs from the top-down decision-making practices of former policies, under which MITI made the plans. Second, the AIVCC introduced new organizations, the Town Management Organizations （TMOs）, to replace incorporated local shop owners, associations （Shopping District Associations, or SDAs）and to produce and manage revitalization projects. However, in spite of these changes（and like the former policies）, the AIVCC had little effect on shopping district revitalization. As a result, the Act was amended in 2006, only eight years after its original enforcement. To date, the amended AIVCC has brought little improvement to the shopping districts.
This paper explores the reasons for the failure of the AIVCC by examining whether the AIVCC actually brought fundamental changes to the planning and implementation of unplanned shopping district revitalization projects. Specifically, this paper explores the following questions: whether the AIVCC changed the top-down decision-making practice, as it advocated; whether the TMOs possessed greater abilities for consensus building than the SDAs, which were given that responsibility before the enactment of the AIVCC; and whether the AIVCC addressed the problems caused by property ownership in shopping districts, problems that have traditionally hindered the implementation of revitalization projects. The first section of this paper traces the evolution of MITI,s policies concerning the facilitation of improvements to unplanned shopping districts and clarifies the major differences between the AIVCC and the former policies. The second section explains the effect of the AIVCC on unplanned shopping district revitalization and examines the reasons for the results. The third section presents a case study of Chiba City, Japan, the biggest city in which the New Basic Plan for Revitalization of City Centers（New Basic Plan）has been implemented, pursuant to the amended AIVCC. This
imple-mentation was approved by the Headquarter for the Promotion of the
Revitalization of City Centers（Headquarter）.2 ）The case study takes a
closer look at how the practice of revitalizing unplanned shopping districts changed after the enforcement of the AIVCC. The fourth and final section examines the reasons for the failure of the AIVCC.
1. Policies concerning the Facilitation of Unplanned
Shopping District Improvement
1-1. Promotion Policies before the AIVCC
MITI,s policy initially aimed to improve unplanned shopping districts, starting with the Assisted Modernization Program of Unplanned Shopping Districts in 1964. The program offered interest-free or low-interest loans to the incorporated SDAs to build parking facilities and roofs, pave roads, and renovate SDA members, stores.
In the late 1960s, large retailers began opening large stores in suburban areas. In 1968, MITI published a report entitled“The Prob-lems and Prospects of the Modernization of the Japanese Distribution Industry.”The report asserted that with the onset of motorization and the development of suburban shopping centers and malls, it was necessary to renovate the existing unplanned shopping districts and develop new shopping districts inside cities. Based upon this policy, MITI started the Program of Modernizing Regional Retailing in 1970. This program granted subsidies to renovate existing shopping districts and build new ones near main railway stations in cities.3 ）
The 1960s and 1970s saw the escalation of a movement composed of small and medium retailers opposed to large stores. It was in this context that MITI enacted two laws simultaneously in 1973. One was the Large-Scale Retail Stores Act, which restricted the opening and
expansion of large stores to protect small retailers.4 ）The other was the
Law on the Promotion of Small and Medium Retail Business, which attempted to modernize the management of small and medium retailers by facilitating improvement of unplanned shopping districts, organizing voluntary chains, and building jointly owned stores. In terms of improving unplanned shopping districts, MITI declared its intention to provide subsidies and loans to four types of projects:（1）projects for improving the shopping environments of unplanned shopping districts, such as erecting roofs over the shopping streets;（2）projects for re-locating entire shopping districts;（3）projects for building jointly owned shopping centers or facilities; and（4）projects for establishing the third sector, whose role was to support the improvement of unplanned shopping districts.5 ）
In 1984, MITI published a report titled“Vision of the Japanese Distribution Industry in the 1980s,”a guideline for the industry. The report included the new idea that unplanned shopping districts are not only shopping places but are also places where Japanese culture is active and local residents communicate with each other. Therefore, unplanned shopping districts should be improved to become“Com-munity Marts”where local residents could meet other needs in addition to shopping. In addition to the existing subsidized projects, MITI would financially support projects to build community facilities in unplanned shopping districts.
The Large-Scale Retail Stores Act received intense criticism from the United States at the Structural Impediments Initiative Talks held from September 1989 to June 1990, and the Act was deregulated in the 1990s. In addition to the deregulation, in 1991 MITI enacted the Act on Special Measures for the Promotion of Commercial Zone Improve-ment.6 ） The Act stipulates that in addition to the existing improvement
projects for unplanned shopping districts, two other types of projects shall also be granted subsidies: new shopping malls that include both
large and small retailers, and invitations to large stores to fill the vacant shops in existing shopping districts. The Act advocates a private-public partnership in which private companies build stores and the public sector improves public facilities. From 1991 to the end of 1997, 212 municipalities were granted subsidies to plan projects, while only 16 municipalities accomplished the planned projects（Shimizu et al. 1999）. Of those 16 projects, none filled vacant stores in shopping districts with large stores, five were preexisting projects such as roofing shopping streets, and eleven involved building new shopping malls――not in cities but in suburbs, where the ownership of land and interest are less complicated（Shimizu et al. 1999）.
In spite of the promotion policies in place since the 1960s, unplanned shopping districts in Japan have declined. According to the Study on Conditions of Unplanned Shopping Districts conducted by the Small and Medium Enterprise Agency of MITI, the percentage of unplanned shopping districts that were reported to be prosperous decreased from 12.9% in 1981 to only 2.7% in 1995. Clearly, economic and social factors, such as changes in transportation and retail shopping patterns, contributed to the decline. However, the flaws inherent in unplanned shopping districts and in planning and implementing revitalization projects are a major part of the problem. Specifically, property ownership in unplanned shopping districts is highly dispersed and complicated. This problem, together with the strong constitutional rights accorded to property owners in Japan（Sorensen 2002）, made implementing revitalization projects in unplanned shopping districts very difficult, if not impossible. Furthermore, the Japanese model of placing the responsibility for consensus building among interested parties with local SDAs is problematic（Bi-Matsui 2009）.The complexity of the issues and the organizational characteristics of the SDA――non-pyramidal, with a lack of leadership and staff――have made consensus building a difficult undertaking. The SDA that had difficulties building
consensus lost the opportunity to use governmental funds to implement revitalization projects, in spite of the generous governmental support provided.
1-2. The AIVCC and the Amended Act
In light of the depression of unplanned shopping districts and commerce in city centers, MITI enacted the AIVCC in 1998. The AIVCC aims to revitalize commerce in city centers, including shopping districts. AIVCC advocated that the municipalities and local or-ganizations initiate plans, and it introduced a new organization, the TMO, to produce and manage commercial revitalization projects in city centers. MITI expected the TMO to function as a developer of shopping centers, building consensus with interested parties in the city center, coordinating store mixes and managing the activities of retailers in the city center（Small and Medium Enterprise Agency 2001; Board of Audit of Japan 2004）.
MITI recommended that four types of projects be planned and implemented in city centers:（1）improving shopping districts,（2） franchising small and medium businesses,（3）improving/building jointly owned stores, and（4）facilitating shopping district improvement. The TMO was instructed to plan the four types of projects, although only the fourth type of project was primarily implemented by TMOs; the other three were mainly implemented by SDAs, business cooperative associations, and small retailers, joint ventures. TMOs could receive subsidies when making plans. In addition, implementation of projects planned by TMOs could receive more generous governmental support, such as larger subsidies and interest-free loans, compared to the governmental support provided pursuant to the Law on the Promotion of Small and Medium Retail Business.
established in 45 out of 47 prefectures before the end of February 2004. From the 1998 fiscal year to the 2002 fiscal year, the Small and Medium Enterprise Agency of MITI granted TMOs a total subsidy of 15.6 billion yen（approximately US $156 million）to plan projects, build consensus with property owners, and implement projects of the fourth type.
However, the AIVCC and the introduction of TMOs had little effect on the revitalization of unplanned shopping districts（Board of Audit of Japan 2004）. According to the Study on Conditions of Unplanned Shopping Districts conducted by the Small and Medium Enterprise Agency of MITI in 2006, the percentage of unplanned shopping districts that were reportedly prosperous decreased from 2.7% in 1995 to only 1.6% in 2006. Furthermore, according to the investigation on the TMOs, activities by the Board of Audit of Japan in 2003, of the 167 TMOs that were investigated, 125 TMOs planned to change the tenant mix of shopping districts to meet customers, needs. However, only 22 of the 125 TMOs implemented this project. TMOs reported that because the program included buying or renting stores（including vacant stores） and replacing/filling them with new retailers or businesses, few TMOs succeeded in persuading the property owners to sell or rent out stores （Board of Audit of Japan 2004）. Thus, the problem of consensus
building, which hindered the SDAs, implementation of revitalization projects, remains a difficulty for TMOs.
In light of the failure of the AIVCC and the TMOs, the Act was amended in 2006, and TMOs were dissolved in most municipalities. To replace the TMOs, the amended AIVCC introduced the Council for City Center Revitalization（Council）, an organization composed of various private entities, and the Chamber of Commerce and Industry / Chamber of Commerce. The Council was expected to play two roles: examining the effectiveness of the New Basic Plan made by municipalities pursuant to the amended AIVCC and coordinating and facilitating revitalization projects. Before the end of July 2010, 146 Councils were established and
100 cities had their New Basic Plans approved by the Headquarter. It is still too early to determine the effectiveness of the amended AIVCC and the Council; however, the same problems experienced by the former policies and organizations have already appeared. For example, according to a study conducted by the Small and Medium Enterprise Agency of METI in 2009, 60.2% of the Councils reported that they were unable to persuade property owners to agree to rent out or sell vacant stores（Small and Medium Enterprise Agency 2010a）. Furthermore, from 2006 to 2009, 39.2% of the unplanned shopping districts reported an increase in vacant stores, while only 10.6% reported a decrease in vacant stores（Small and Medium Enterprise Agency 2010b）. In the same period, the percentage of unplanned shopping districts that were reported to be prosperous further decreased from 1.6% to 1.0%（Small and Medium Enterprise Agency 2010b）.
Why did the AIVCC, enacted by MITI with great expectations, have little effect? Why did the TMO fail in the role of a developer of shopping centers? Why did the Council face the same problem with TMOs and SDAs? In the second section, which focuses on the AIVCC and TMO, we will examine these problems by analyzing the process of establishing TMOs and making the TMO Plans as well as the organiza-tional characteristics of TMOs.
2. TMO and TMO Plans
2-1. The Process of Establishing TMOs and Making TMO Plans
The process of establishing TMOs and making TMO plans is shown in Figure 1. According to the AIVCC, TMOs shall be established on two conditions:（1）the municipality has made the Basic Plan for Revitalization of City Centers（Basic Plan）pursuant to the AIVCC, and
（2）the plan includes projects for the improvement of small and medium retailers. The TMO is responsible for making the General Plan for Improvement of Small and Medium Retailers（General TMO Plan）,and the General TMO Plan must be approved by the municipality. Based on the General TMO Plan, the implementing organizations make Specific TMO Project Plans, and these plans need to be checked by the municipality and approved by the Minister of MITI. Thus, both
establishing the TMO and making TMO Plans is a top-down decision-making process firmly controlled by MITI.
2-2. Organizational Characteristics of TMOs
AIVCC stipulates that four kinds of organizations can be designated as TMOs:（1）Chambers of Commerce,（2）Chambers of Commerce and Industry,（3）the third sectors, and（4）the third sector incorporated foundations. According to an investigation conducted by the Small and Medium Enterprise Agency of MITI from November 2002 to March 2003, about 70% of TMOs were Chambers of Commerce or Chambers of Commerce and Industry and 30% were third sectors.
Although SDAs cannot be designated as TMOs, the Small and Medium Enterprise Agency of MITI stated that SDAs should actively participate in making project plans because it is crucial that TMOs obtain agreement from the local retailers and property owners, many of whom are SDA members, to implement the projects（Small and Medium Enterprise Agency 2001）. Representatives of local SDAs were usually included in TMOs and were key persons in decision-making.
Figure 2 shows the typical organizational structure of TMOs. Although on the surface the decision is ultimately made by the Board of Directors or Standing Committee, the actual decision-making bodies in TMOs are working groups of specific projects, which include represent-atives of local SDAs as members. The Secretariat is supposed to assume the important role of helping to build consensus, manage events, and coordinate projects. However, most TMOs lacked staff, especially staff with expertise. For example, according to the audit of 167 TMOs established before the end of March 2003 by the Board of Audit of Japan, the average number of staff at TMOs was 3.2 persons, some of whom also worked as staff in Chambers of Commerce or Chambers of Commerce and Industry. Furthermore, 83.0% of the TMOs lacked staff
with the necessary expertise in retail, shopping center management, and project coordination（Board of Audit of Japan 2004）.
Thus, TMOs had no higher capability than local SDAs for consensus building or implementing revitalization projects, for two reasons. First, like SDAs, TMOs lacked staff, especially staff with expertise. Second, even worse than SDAs （whose directors are usually the local property owners themselves who have personal connections with other property and business owners） , the staff of TMOs were mostly employed clerks with fewer of these connections. The lack of personal connections makes consensus building especially difficult in Japan, where informal communication is essential to consensus building.
The Council that replaced the TMO after the amendment of the AIVCC expected to play fewer roles than the TMO. Pursuant to the amended AIVCC, unplanned shopping district revitalization projects are now planned and implemented mainly by the city and local SDAs or by the two jointly. However, even the role of the Council stipulated in the
amended AIVCC ――to examine the effectiveness of the New Basic Plan made by municipalities ――cannot really be said to have been performed. For example, although all of the Councils provided a formal written comment on the New Basic Plan when the plan was submitted to the Headquarter for approval, most councils held only two to four meetings to discuss the plan before they summarized the comment.7 ）
2-3. Reason for the Failure of the AIVCC, TMO and Council
Although the AIVCC ostensibly advocated that municipal and local organizations initiate plans and introduced the new TMO, it did not fundamentally change the practices of shopping district revitalization, for three reasons.
First, it did not change the top-down decision-making system. As we have seen in the process of establishing TMOs, making TMO Plans, or making the New Basic Plan, the requirements of the plans and organizations were determined by MITI. The municipalities , planning was guided and controlled by MITI through various manuals, consulta-tions and approval systems.
Second, the AIVCC did not change the practice that financing revitalization projects depended on governmental support. This practice has brought two problems. One is that in the planning of a project, the question of“which project can get a governmental subsidy ”sometimes becomes a more important concern than“what project is really needed.” The other problem is that it makes building consensus with local property owners and retailers more difficult because they are used to depending on the government for financing and are reluctant to take risks and responsibility. Consequently, they will not agree on the project unless the conditions offered by the local government are very generous.
problems related to property ownership that have hindered the shopping district revitalization. One problem is that because of the strong rights accorded to Japanese landowners under the post-war constitution（Sorensen 2002）, eminent domain has not functioned. The other problem is that many old owners of small shops in unplanned shopping districts are neither willing to rent out or sell their shops nor willing to invest in their shops because they are living on a pension and/or personal savings rather than on the revenue of the shops, they have no successors, and they live above the shops. In spite of many programs implemented by TMOs to fill the vacant stores, the average vacant store rate in unplanned shopping districts increased from 8.5% in
2000 to 9.8% in 2006（Small and Medium Enterprise Agency 2004, 2007）.8 ）
In 2006, 27.0% of the unplanned shopping districts listed “the owners are not willing to rent out”as one of the main reasons why vacant stores could not be filled（Small and Medium Enterprise Agency 2007）.
Thus, the practices of decision-making, planning and im-plementation, as well as the roles of MITI and SDAs, remained unchanged after the enactment of the AIVCC. When MITI enacted the AIVCC, it“accommodated and in many ways adapted to the logic of the preexisting system, working around those elements they could not
change”（Thelen 2003, p.226）. The fact that the AIVCC did not tackle
the factors that had made the former policies ineffective is one of the most important reasons why the AIVCC and the amended AIVCC had little effect on the revitalization of unplanned shopping districts.
This point can be clearly seen in a case study of the city center of Chiba City, Japan, the biggest city for which the New Basic Plan has been approved by the Headquarter.
3. Revitalization of Unplanned Shopping Districts in the
City Center of Chiba City: A Case Study
Chiba City, located 25 miles east of Tokyo, is the capital of the Chiba Prefecture .9 ）The cit y,s total land area has changed very little
since the 1980s, while its population has steadily increased to nearly one million in 2009（Table 1）. Through the end of the 1970s, annual retail sales and floor space in Chiba City increased rapidly. The increase in floor space leveled off in the 1980s with the enforcement of the Large-Scale Retail Stores Act. However, as a result of deregulation in the early 1990s, retail floor space has increased despite inconsistent sales.
There are six districts in Chiba City. Historically the Chuo District has been where shopping districts, business offices, and city/prefectural offices were concentrated. The north part of Chuo District is the core of the city and is now designated as the city center.
The city center includes two commercial centers, the old commercial center developed after World War II and the new commercial center developed after 1963（Map 1）. The old commercial center was formed with a proliferation of shops along the 0.7-mile road connecting the former National Railways Chiba Station （now the JR Chiba Station, or Chiba Station）, the Chiba Prefectural government buildings, and the former City Hall（Map 1）. When the Chiba Station was moved approximately 2,000 feet westward in 1963, 10 ）the foot traffic in the old commercial
center decreased dramatically, and a new commercial center formed
around the new station.
The old commercial center includes three unplanned shopping districts,（1）Sakae-cho,（2）Chiba-ginza and（3）Chuo-ginza, and the new commercial center includes two unplanned shopping districts, （4） Fujimi and （5）Shinmachi（Map 1）. All of the districts have SDAs to represent property owners and retailers. In this section, we will focus on the three unplanned shopping districts in the old commercial center that
experienced depression, examining the long-term practice of planning and implementing revitalization projects in the districts to clarify the difference in practice before and after the enforcement of the AIVCC.11）
3-1. Unplanned Shopping District Revitalization before the AIVCC
Unlike the prosperous shopping districts in the new commercial center, the sales of three shopping districts in the old commercial center decreased by one-third after the move of Chiba Station in 1963（K. Uekusa and T. Ono, interviews）. However, the three SDAs in the old commercial center reacted differently to the difficulty. Before the enforcement of the AIVCC, two large-scale revitalization projects were accomplished in Chiba-ginza （2）, and one large project was finished in Chuo-ginza（3）. In contrast, no significant projects were implemented in Sakae-cho（1）.
The two revitalization projects completed in Chiba-ginza （2）
included one Urban Redevelopment Project（Type 1）12 ）and one Shopping
District Modernization Project, which was also implemented in Chuo-ginza（3）. In 1972, the Chiba-ginza SDA began lobbying Chiba City to implement an Urban Redevelopment Project to revitalize the district, and in 1978 Chiba City agreed to the project（Mikami 1984） . Construc-tion began in 1985 after the city obtained key tenants and decided to purchase unsold floor space for a Cultural Center and Children ,s Science Museum. The project, which was completed in 1989, was the first joint public-private Urban Redevelopment Project implemented in the city （Chibachuo District Urban Redevelopment Association 1989）.
In 1985, Chiba City proposed the Shopping Distric t Modernization Project to all incorporated SDAs within Chiba City. The project,s purpose was to renovate old stores and improve the infra-structure of shopping districts. The estimated cost of each project was 510 million Japanese yen（approximately US $ 5 million） , with
two-thirds to be funded by the Prefecture and City and one-third to be shared by the SDA members. All SDAs in Chiba City were eligible to apply. Chuo-ginza SDA（3）and Chiba-ginza SDA（2）were the first and second SDAs in the city that obtained agreement from all of their members and applied for the implementation of the project. The projects in the two districts finished in 1989 and 1990, respectively. In contrast, in Sakae-Cho（1）, the SDA failed to even organize a formal discussion on the project.
As a result, the state of the three shopping districts could not have been more radically different in the 1990s. Chiba-ginza（2）evolved into the city,s central business district, Chuo-ginz a（3）kept its status as a commercial center, and Sakae-cho（1）was nearly deserted.
3-2. Unplanned Shopping District Revitalization after the AIVCC
●General TMO Plan of Chiba City
With the deregulation of the Large-Scale Retail Stores Act in the 1990s, the opening of large stores outside Chuo district increased. The percentage of retail floors of the City Center for the whole city dropped from 28.3% in 1994 to 16.5% in 2004, and the share of retail sales of the city center decreased from 25.8% to 21.2% in the same period（Chiba City 2009）.
In March 2000, Chiba City finished the Basic Plan for the Revitalization of the City Center pursuant to the AIVCC. At the same time, the General TMO Plan of Chiba City was submitted to the city for approval. In June 2000, three months after submission, Chiba City approved the General TMO Plan and the Chiba Chamber of Commerce and Industry was designated as the Chiba TMO. The reason that the General TMO Plan could be finished so quickly was that Chiba City, not Chiba TMO, drafted the plan ――even though pursuant to the AIVCC,
the TMO should draft the General TMO Plan. The reason for this practice was that“Chiba TMO had neither the know-how nor the experts to make the plan, and such practice is not rare in other cities” （K. Tanabe, interview）. When Chiba City started drafting the General
TMO Plan in 1999, they formed a Task Force to offer opinions on the draft. The Task Force included thirteen members: ten current or former chief/deputy directors of SDAs in the city center, one representative from a large store, one representative from the Chiba City Tourism Association, and one city officer. After collecting opinions from the Task Force in four conferences and revising the draft, the city finalized the General TMO Plan.
The General TMO Plan includes 19 projects to be implemented within five year s（Table 2）. The projects have two features. First, in terms of the site of the project, more projects were planned in the shopping districts where the SDAs had demonstrated the ability to build consensus on the projects and had implemented more projects before the enforcement of the AIVCC. Second, most planned projects met the requirements of subsidies provided by MITI.
●The Organization of the Chiba TMO
Although the Chiba Chamber of Commerce and Industry was ostensibly designated as the Chiba TMO, it only functioned as the secretariat, and the directors of the SDAs were actually the decision makers（K. Tanabe, interview）. As shown in the organizational chart of the Chiba TMO（Figure 3）, the decision-making body was the seven Standing Committees on projects, and the heads of all the Standing Committees were the chief/deputy directors of the SDAs. The Chiba Chamber of Commerce and Industry intentionally designed the TMO organization in this way to try to have as many projects implemented as possible, and the organization worked as expected（K. Tanabe, interview）.
The operation fund of the Chiba TMO was small and depende d heavily on subsidies. For example, in the 2005 fiscal year, the total budget of the Chiba TMO was less than 10 million yen（approximately
US $100,000）. More than 30% of the budget was covered by the city ,s
subsidies（Chiba TMO 2005）.
3-3. The Amended AIVCC and Unplanned Shopping District Revitalization
was dissolved. In December 2006, Chiba City made the New Basic Plan, and soon after that, the Preparatory Committee of Chiba Council for City Center Revitalization（Chiba Council）was founded pursuant to the amended AIVCC to comment on the draft of the New Basic Plan. The Chiba Council was composed of seventeen members, including executives of railway companies, energy companies, banks, a real estate association, mass media companies, and representatives of SDAs and neighborhood associations. The members were chosen by Chiba City and were selected based on two criteria:（1）representatives from all of the main businesses/organizations related to the city center, and（2） companies or organizations that “will not oppose the draft of the New Basic Plan”（T. Houchi, interview）. After only two meetings, the Chiba
Council concluded that the draft of the New Basic Plan was “by and
large pertinent”（Chiba City 2009）. The New Basic Plan was approved by the Headquarter in 2007. Chiba City is now the largest city in which the New Basic Plan has been approved.
In terms of revitalizing commerce in the city center, the New Basic Plan includes five projects:（a）various events,（b） an Urban Redevelopment Project in the West Exit of Chiba Station,（c）an Urban Redevelopment Project in Chuo-ginza（3）,（d）infrastructure renovation in Chiba-ginza（2）, and（e）removing the superannuated shopping arcade in Sakae-cho（1）. All of these projects are eligible to apply for the new subsidies provided by METI pursuant to the amended AIVCC. Except for the events, the planning of all of the other projects started years before the enforcement of the amended AIVCC. For example, the planning of the Urban Redevelopment Project（c）in Chuo-ginza（3） , a joint public-private project and the only project that has been completed, formally started in 1995. However, by putting the project into the New Basic Plan, Chiba City doubled the subsidies received from the central agencies（M. Sakuma, interview）.
3-4. Summary
The case of Chiba City shows that the practice of shopping district revitalization in Chiba City did not change fundamentally after the enactment of the AIVCC. Although Chiba City made both the Basic Plan and the New Basic Plan pursuant to the AIVCC and the amended AIVCC, with the exception of events, few new projects（especially projects that need a full-scale consensus）were planned after the enactment of the AIVCC. The plans were primarily made to get more support from central agencies to fund the projects that had already been selected. Furthermore, although the city established both the Chiba TMO and the Chiba Council, the two organizations neither functioned as planning organizations nor actively participated in planning. Chiba City, the only organization that has expertise in planning as well as applying for subsidies from central agencies, has been the only planning organization in the city. Furthermore, the implementation of projects depends on the agreement of local property owners and retailers, and the task of building consensus is still placed with local SDAs. The ability of the SDAs to build consensus greatly influences the prosperity of the districts.
4. Conclusion
Unplanned shopping districts, which are mainly composed of small and medium independent retailers, are a typical form of retailing in Japanese cities. Promoting the development of the unplanned shopping districts has been an important strategic goal of the Japanese government. Although MITI enforced several promotion policies prior to the late 1990s, the unplanned shopping districts declined. In this situation, MITI enforced the AIVCC, a new promotion policy that
differed from the previous policies in that it advocated local initiatives and introduced TMOs as the coordinators of the commercial re-vitalization projects in the city center.
Although the AIVCC was enacted by MITI with great expectations, like previous promotion policies, it had little effect on the revitalization of unplanned shopping districts. The main reason for the failure of the AIVCC was that it did not fundamentally change the preexisting situation of the planning and implementation of revitalization projects, nor did it tackle the preexisting problems that prevented the former promotion policies from functioning. The case study of Chiba City shows that the AIVCC inherited three key factors from the preexisting practice of unplanned shopping district revitalization:（1） MITI,s initiative and the top-down decision-making system, （2）public fund-dependent planning and implementation practices, and（3）the model of placing the responsibility for consensus building on incorporated SDAs. Furthermore, the AIVCC did not try to offer any resolution to the problem of property owners , low motivation to part with their shops or participate in revitalization projects and did not address the strong constitutional rights afforded to them. As a result, few projects planned after the enforcement of the AIVCC, either ostensibly or actually, were essentially different from the previous ones. Furthermore, similar to what happened before the enforcement of the AIVCC, the shopping districts where the SDAs had difficulty obtaining agreement from their members have little opportunity to use public funds to revitalize their districts.
The preexisting system of planning and implementation is not easily changed, nor are the problems related to property ownership simply solved. However, simply hammering ou t“new”policies by working around these difficulties without addressing them not only wastes public funds but also makes the relevant partie s――staff and professionals working on the spot, retailers, and residents ―― lose
confidence in promotion policies as well as in the revitalization of unplanned shopping districts in Japan.
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Interviews
Kazuo Uekusa, former Chief Director of Chiba-ginza SDA.
Koji Tanabe, former staff of Chiba TMO, staff of Chiba Chamber of Commerce and Industry.
Masatoshi Sakuma, staff of Chiba City.
Takanori Ono, former Chief Director of Sakae-cho SDA.
Toshio Houchi, staff of Chiba Council for City Center Revitalization, and staff of Chiba Chamber of Commerce and Industry.
Note
1） According to a 2006 study conducted by the National Federation of Shopping Center Promotion Associations, unplanned shopping districts in Japan averaged a total of fifty-nine stores. The average number of national chains in such districts （including supermarkets, discount stores, convenience stores, drug stores, fast food restaurants, etc.）was only four stores.
2） The Chief of the Headquarter is the Prime Minister, and all of the Cabinet ministers are members.
3） Until 1990, the program was implemented in 241 areas.
4） This law was repealed in 2000, and the“Law concerning the Measures by Large-Scale Retail Stores for Preservation of Living Environments” was enacted in its place. Unlike the old law, which was enacted to
protect small and medium retailers, the new law,s purpose is to protect living conditions in the areas surrounding large retail stores.
5） MITI,s support was very generous. For example, one-quarter of the project cost could be subsidized by MITI. Of the remaining costs, 80% of the cost to build public facilities could be covered by interest-free loans, and 70% of the cost to build other facilities could be covered by a loan with an interest rate of 2.7%.
6） The Act was amended when the AIVCC was enacted in 1998. Of the two new types of subsidized projects assisted by the government pursuant to the Act, the project of inviting large stores to fill the vacant shops in central shopping districts was absorbed into the AIVCC to receive new subsidies. The project of building new shopping malls was approved only in municipalities where the Basic Plan for Revitalization of City Centers was not made pursuant to AIVCC. In 2006, the Act was repealed.
7） Headquarter for the Promotion of the Revitalization of City Centers （2010）.
8） The vacant store rate further increased to 10.8% in 2009（Small and Medium Enterprise Agency 2010b）.
9） Prefectures are analogous to states in the U.S.
10）The project is part of the War Damage Reconstruction Plan in Chiba City.
11）The analysis is based o n（1）a review of revitalization project docu-ments, including guidelines, meeting minutes, plans, project records, and newspaper and magazine articles, and（2）interviews with key persons involved in revitalization projects, including Chiba City officials, directors of the five SDAs, Chairman and staff of Chiba TMO, and staff of Chiba Council for City Center Revitalization.
12）Urban Redevelopment Projects are planned and implemented pursuant to the Urban Redevelopment Law, enacted in 1969. Projects are implemented in one of two ways,“Type 1”or“Type 2.”Type 1 occurs through an exchange of property rights between interested parties. Type 2 occurs through a direct purchase.
