An interview with the Representative Director of the Foundation, Nakano, was published in the Atami Economics Newspaper.

[Interview with Upper Management in Atami, vol.1]

Yoshihisa Nakano, CEO of ACAO SPA & RESORT: Civil Rehabilitation and the Future In this first installment of the special feature “Atami: Interview with the Director,” we are pleased to introduce Yoshihisa Nakano, CEO of ACAO SPA & RESORT, a resort facilities and real estate business. In August 2021, Mr. Nakano became chairman of the then Hotel New Akao. Since then, he has been rebranding and recreating the company. The aging hotel and its facilities were out of date and had been hit hard by the COVID pandemic, and in 2022 he sold land including the hotel and other New Akao buildings to a U.S. investment fund. He also recreated the tourist garden “ACAO Herb & Rose Garden”, making it a “Land Art Park” and renamed it “Acao Forest”; additionally, he has been reviewing the company’s management which had been accumulating a large debt for many years. In order to “increase the value of Atami”, Nakano-san held the “ATAMI ART GRANT” for the first time in 2021. The event has grown into a major cultural affair in Atami, attracting a total of 200,000 visitors for its third edition in 2023.

Nakano speaks at the Opening Ceremony of “Atami Art Grant”

Since taking office, Mr. Nakano has regularly organized a gathering of local citizens and business owners to exchange ideas and share plans for Atami's sustainable growth and development under the title of “Social with 3,000 Atami Citizens”. On July 29, just as the company was about to move forward with concrete plans to address various issues facing the city, such as vacant houses, declining workforce, and educational issues, it filed for application of the Civil Rehabilitation Law with the Tokyo District Court. Some local citizens were surprised and puzzled by the sudden news. We interviewed Mr. Nakano one month later and asked him about the background and the future of the company.

Nakano-san talking with local residents at “Social with 3,000 Atami Citizens”

—Could you tell us the true reason you applied for the Civil Rehabilitation Law?

Nakano (titles omitted): First, let me explain, because it is easily misunderstood, that this is a civil rehabilitation and not a bankruptcy. The laws are also divided, with civil rehabilitation being addressed under the Civil Rehabilitation Law and bankruptcy being addressed under the Bankruptcy Law. People often get upset because they think it's bankruptcy and that they may not be paid their salary.

Civil rehabilitation has affected financial institutions, but fortunately, other creditors are mostly small and the reality is that the impact is minor. When I became chairman of the then Hotel New Akao, the company’s debt totaled 12 billion yen, but by selling some of its real estate, we reduced it to 6.3 billion yen by December 2023. The plan to repay the remaining full amount by 2029 was also submitted to the financial institutions. Initially, the company was proceeding with a business rehabilitation ADR rather than a civil rehabilitation. The idea is to rehabilitate a business by cutting off some of the financial institution's claims. We had the sponsor's Certificate of Intent and the ADR was on track to be approved as scheduled, but it was decided at the last minute that it could not be realized, and the case was moved to civil rehabilitation proceedings. Right around that time, we held a meeting for employees and explained that their paychecks would be honored.

—What are your plans moving forward?

Nakano: We have received bids from various sponsor companies and we expect to make our decision by the end of September. When I arrived in Atami around 2021, few companies were interested in our land, but now that people are reevaluating their view of Atami City and the value of ACAO SPA & RESORT, many companies are expressing interest in sponsoring us.

—What do you look for in a sponsor?

Nakano: Selling off land at random or earning yield on real estate cannot play a role in increasing the value of Atami as a whole. It is up to the sponsor to decide whether or not to implement the project, but we’ve shared the plan we have drawn up with potential sponsors and it is garnering considerable interest. If they are aware of the plan we have in mind and proceed with it, I believe it can be linked to the regional development of Atami. I hope that the sponsor will recognize the unique cultural character of Atami and that patrons who support artists will have the desire to help make Atami a place that the rest of the world will want to visit. There is so much here. For example, a recent move we’ve made is to make Acao Forest— the whole forest! — available as a rental space for private parties. Recently a luxury fashion brand rented out Land Art Park, aka Acao Forest, and held an invitational meeting for their clients. Is there any other such venue? An entire forest and beach to be used as a private rental space? And there’s even a Shinto shrine in the forest, lending the whole landscape a sacred atmosphere. The forest’s previous life as a flower park was not competitive and had no power to stand by itself as a revenue-generating business; by giving it a second life I think we have increased its meaning and value. The former ACAO had been operating at a cost which was not competitive and we knew we had to make a change. The timing is right for both ADR and civil rehabilitation to be utilized not as a countermeasure, but as a strategy. If the connections happen naturally and smoothly — as I believe they will — well, then the recreation of Atami will step up with more vitality as originally planned.

Nakano-san’s plan for ACAO SPA & RESORT

—What is most important to you, Nakano-san?

Nakano: Protecting our employees and playing an active role in the community is what’s most important to me. It’s my priority in everything I do. Even in our current time, I’m surprised that most entrepreneurs don’t share the same perspective. Even if their priority is to protect the company, it doesn’t extend to the employees. And they have no motivation to play a role in the community. It is probably because only the managers who make big salaries want to be saved. Rather than working on regional revitalization for your own company’s sake, we need to view our role from multiple perspectives in order to see it reach its full potential.

ACAO SPA & RESORT