Dubious development site in Kyoto finds buyer

An offshore buyer may have been found for a large block of land with an interesting history in central Kyoto.

The land is located in one of Kyoto’s leading tourist areas.  Amidst a booming tourism industry and improving real estate market, a property such as this should have buyers lining out the door to bid on it. Despite the best efforts of the seller, however, no local buyers dared come forward. The problem, as claimed by the Shukan Post tabloid, was due to the seller’s alleged ties to the North Korean regime. 

The article claimed that the alleged connection came to light back in 2013 when it was alleged that the same seller was supposedly the financial backer of a failed bid on the foreclosed Chongryon headquarters in Tokyo.

According to un-named industry insiders, the seller had allegedly approached numerous real estate companies, developers and hotel operators in order to sell the land. None were willing to take on the potential risk of such an acquisition, with some suggesting that a sale to a domestic buyer was not very likely due to concerns that the Japanese government may step in to intervene if there was any perceived notion or allegation that the proceeds of the sale could possibly be indirectly funneled towards supporting the North Korean regime and their missile and nuclear weapons program.

When the seller acquired the 10,000 sqm block land in 2012, some insiders suggested the sale price could have been around 5 billion Yen at the time. The recent sale of a fifth of the land is rumored to have been around 11 billion Yen (approx. 98 million USD).

The author of the Shukan Post article expressed concern that the US-based buyer may either not be fully aware of the alleged background of the seller, or simply not concerned by these rumors. With a shortage of hotel rooms, the site could provide some positive returns if it was developed into a hotel. It has been suggested that the buyer is planning a 500 room hotel for the site.

The land has a checkered past. Back in the 1980s it, along with two other parcels of land, was owned by the chairman of a large consumer finance group who received a suspended sentence in the early 2000s for wiretapping two journalists. Along with a local organization, almost 40 billion Yen was spent buying up land and surrounding buildings in the district with the plan of redeveloping the neighborhood. The plans never came to fruition. One of the project partners was gunned down by a local gangster, homes were fired at, and the president of a construction company involved in the land speculation was shot and killed by two men on a motorbike while sitting in his car at an intersection. The sites at the center of this scandal have changed hands several times since then.

Sources:
Shukan Post, October 27, 2017.
The Sankei Shimbun, March 28, 2013.