Shimokitazawa BONUS TRACK: Using An Editorial Approach To Create A Commercial Space Loved By Locals

As part of Kaitai Shinjo, an event series focused on discussing the deconstruction of towns to create new spaces that do not yet exist, Loftwork held an event, titled “An Important Perspective on Future Regional Real Estate Development”, to discuss future perspectives and the process of planning, conceiving, editing and producing a new space.

The panelists included Hiroyuki Ono, President of Shimokitazawa BONUS TRACK, which opened in April 2020, and Shota Kono of BAC Urban Project, Inc, and it was moderated by Hajime Matsui of Loftwork.

Writing: Kenta Watanabe (LAYOUT Unit, Loftwork)
Editing: Hajime Matsui (Loftwork LAYOUT Unit),
Yutaro Gokan (loftwork.com Editorial Department)
Photo: Courtesy of Shimokitazawa BONUS TRACK (Sousansha)

Event Summary

Kaitai Shinsho Vol 08 – Shimokitazawa BONUS TRACK
The future of commercial real estate development based on the creation of small private public spaces

 

 

Hiroyuki Ono is a founding member of greenz.jp, which was launched in 2006. The concept of greenz.jp is to find innovative mechanisms to solve social issues and create new values. “The business model of greenz is different from the advertising model of most web magazines,” said Mr. Ono.

He has since retired from the board of directors and is involved in the project on a part-time basis. However, while working on greenz, he was approached to develop the former Odakyu railway track site in Shimokitazawa because of his experience in community exchange and facility management projects such as Little Tokyo, HOOD Tenjin, and Omusubi Stand ANDON.

 

Projects Developed By Mr. Ono At Greenz

• greenz https://greenz.jp/
• Little Tokyo https://motion-gallery.net/projects/littletyo
• HOOD Tenjin: A new co-working space in the Tenjin area https://hood-tenjin.com/
• Omusubi Stand ANDON https://andon.shop/

Shimokitazawa BONUS TRACK was developed and managed by B&B bookstore’s Shintaro Uchinuma and Mr. Ono. B&B, which stands for Books & Beer, is based on the concept of “the bookstore of the future,” where one can enjoy a book with a beer in hand. It has held in-store events in Shimokitazawa for almost 10 years, where authors introduce and discuss the content of their books.

At first, the plan was that Mr. Ono would open a second Omusubi Stand ANDON, a multi-purpose restaurant, and Mr. Uchinuma would open the B&B bookstore within BONUS TRACK. However, Mr. Ono took a risk and decided to lead the entire project, including taking charge of subletting the units. He used his network from his time at greenz to gather potential tenants and worked together with the candidates to plan the area.

BONUS TRACK opened in April 2020. It is divided into an event space, residence, shared space and parking, with a total of 14 tenants.

 

“When we opened, we started with only one vacant lot. We thought if we started with all 14 lots completely filled, people would think it was a place with no room to spare,” Mr. Ono said. “Opening something unfinished creates encounters with new people. For that reason, we launched the last lot with an open call for applications.”

In the past, Shimokitazawa was a popular area for young people and rent was low. However, prices have skyrocketed to 60,000 to 70,000 yen per tsubo (a Japanese unit of area equal to approximately 3.31 sq. meters). Setagaya Ward, where BONUS TRACK is located, has the largest number of vacant houses of the 23 wards in the area and an aging population.

Therefore, BONUS TRACK decided to offer “live-and-work” buildings, which separate each building into a store and a residence. The rental prices are lowered, while the building is also used as a commercial facility.

It was important to the founders to include elements of the Shimokitazawa character and be open to challengers. As such, they decided to create residences and a shopping district where innovation and commerce could become one.

While the pandemic restricted certain activities, it helped to integrate the surrounding community, making it a place where elderly and families with children could visit early in the mornings.

The outcome was much better than if they had created the facility for visitors from outside the Shimokitazawa/Daita area, the founders said.

 

One of the 14 plots was occupied by omusubi Real Estate, which helped to renovate the surrounding properties to make them rentable and to create relationships with the various owners. By doing so, BONUS TRACK operates in a way that allows managers to answer requests to open stores around the area, even if all the lots are currently occupied.

Every tenant in BONUS TRACK also has cultural and social missions other than just revenue. Even in social initiatives such as the SDGs, Mr. Ono believes it is important to accompany the concept with experiences people can understand, rather than stand alone.

From greenz.jp to BONUS TRACK, he took the concept of running a web magazine to the operation of a commercial facility. BONUS TRACK has been operating for about a year and a half now, under the idea that media is not only a commercial success, but also a new way of communicating with society.

Taking advantage of his unique network and good connections between various stakeholders, Mr. Ono’s management of the project was a unique approach to real estate development.

Mr. Kono of BAC Urban Project Inc. noted that Mr. Ono brought a newcomer’s perspective to the real estate developer industry.

Loftwork member, Matsui, agreed that the approach was particularly new especially since the concept took a media approach first, which led to projects for social initiatives, and finally the physical place of BONUS TRACK.

The COVID-19 pandemic complicated the situation, but as time went on, more events were held every weekend at the plaza. The strength of the project lay in the self-management of the space. There is no need for commerciality or attracting customers.

Through events and initiatives, the team demonstrated its commitment to the community. For example, the team asked an artist to create a three-dimensional Daruma doll, the icon of BONUS TRACK, and incorporated an online auction system, donating a portion of the proceeds to a local children’s cafeteria.

In addition to attracting many visitors and consumers, BONUS Track also operates in a way that leads to cultural innovation.

Recently, there are more and more examples of projects that evoke a sense of comfiness, unlike conventional large-scale commercial facilities, such as MIYASHITA PARK in Shibuya. In the process of setting the feeling, the BONUS TRACK team had discussions with entrepreneurs and potential tenants and considered the prerequisites for site conditions and zoning.

“Then, we have a collective intellectual discussion with the designers about the amount of money and the operation of the project. This is not for the purpose of consensus building, but rather to ask, “How can we make this place better?”” Mr. Ono said.

Through constant communication, the lot size, unit price and concept were finally decided.

The unprecedented approach is one of a kind. “Mr. Ono has built a large network since his days at greenz, and has been able to use methods that have never been used before because he has not been bound by conventional wisdom,” Mr. Kono said.

Mr. Ono noted that constant communication also helped develop long-term use of the building, but large companies do not proceed in that manner until they have a certain degree of visibility into the future.

Liquidation of real estate and other factors, such as the division of functions can make it difficult to bridge the gap between the owner’s side and building management. In order to solve this problem, the building management was included from the basic development concept phase, according to Kono.

“It would be ideal if each phase is optimized,” noted Mr. Ono regarding the current development methods.

Kono hopes to see an increase of development projects such as BONUS TRACK where both sides of development work side by side.

Social businesses are often difficult to establish because of their low profitability and time-consuming nature. However, towns should not aim solely on achieving profitability.

“A concentration of profitable tenants does not necessarily equal a good town,” Mr. Ono said. “It is also essential to have cultural facilities and businesses that solve local issues, which are not highly profitable.”

Currently, these projects are operated at the expense of railroad companies and local governments, but adopting a method similar to running digital media and incorporating some of greenz’s initiatives in the development of BONUS TRACK, can help bring potential partners and create value for the city.

If entrepreneurs and NPOs could launch with reduced rent and so on, then it would be economically viable. This is a business model where the landlord and the tenant could benefit from a mutually beneficial relationship and solve pre-existing issues for the city’s residents.

Certain issues can arise when taking such an approach, but Mr. Ono was certain that it was possible to overcome them and take advantage of the situation regardless. For example, in the case of renewing existing property in rural areas, there may be restrictions regarding lack of windows or water supply. It is, however, possible to take advantage of the reduced costs from vacant floors that are no longer leased, whether for economic or contractual reasons, rather than construct a new building from scratch.

The COVID-19 pandemic made it clear that properties built in a good location and expected to generate a certain level of demand do not necessarily attract customers.

“It is precisely at times like these that we need to rethink the whole issue from the very beginning, starting with the question of how we can somehow make meaningful use of the property to solve social significance and local issues,” Mr. Ono said.

“If we redesign the commercial nature of the project and make the entire community, including the local government, involved in the project from the preparatory stage, I believe we can see a future where specific immigrants and corporate relocations will increase,” he added.

Mr. Ono noted there were difficult aspects such as dual-use housing and management. But the space will become more and more interesting due to its social experimental nature. In order to keep the motivation going, Mr. Ono reminded everyone to think, “What kind of life is good for us?”

BONUS TRACK features urban spaces similar to a park. Plazas and galleries are places that can be changed at any time, rather than a set location meant to attract visitors and produce profit.

Mr. Ono compared the state of BONUS TRACK with magazines; a place loved by the public all the time is similar to the statement of “I buy this magazine every month.” Tenants can view their home ground as a “series” that they can return to, while the events held in the plaza can be compared to the special features in a magazine. The content of BONUS TRACK is proposed to society through the concept of series and special features similar to magazines.

As Mr. Ono holds a background in web media, while his partner Shintaro Uchinuma holds a background in publishing and bookstores, both of them created a place where people can demonstrate their skills through a public venue.

Currently, BONUS TRACK management has a small team consisting of four full-time members in their early thirties, who already have a professional record and are excited in developing their next challenge.

BONUS TRACK management plans through “collective knowledge”. It involves tenants, who also possess editorial skills, when planning events. This allows management to work with fewer members. Currently, management plans 70 to 80 percent of the events, but tenants initiate 20 percent of the events.

Mr. Kono agreed that the approach can be successful in other places if management can reproduce a system that involves tenants and allows them to run their own events.

“We are like editors of a magazine, always telling tenants, “Why don’t you try something like this next?” Mr. Ono said, adding that if management always takes the lead, the project is limited and subject to the viewpoint of the managers.

Reassurance was also a key point, with management saying, “We will help you, so why don’t you try using this place?”

“Even if the result is an event that deviates from the BONUS TRACK style at first glance, what is the axis that is not lost? I try not to forget to keep a bird’s eye view of the entire event, thinking about what is the axis that will not be lost,” he said.

Even if the results of an event deviated from the BONUS TRACK style, the core was not lost.

BONUS TRACK has only just begun. Individuals, government and local authorities have already made offers to manage other buildings. Real estate and private entrepreneurs can work together, while using the “editorial” experience, to create new facilities and spaces. Mr. Ono’s goal is to continue using the knowledge gained from BONUS TRACK so rural areas, stores, and people can work together towards something valuable.

Kono from BAC Urban Project, Inc., who worked on the project as a consultant, hopes to set up similar projects in the region as well. “I think it is important for people to have relationships with each other in reality as they grow up, not just online, so I want to use the town’s resources to create opportunities for people to grow,” he said.

As the term “co-education” implies, the key challenge for the future is to develop people together.