Yanagi Koen in Machida, Tokyo. Photo by Brett Homenick.
A lot can change in 42 years, but if Kawase-san was actually riding on the sidewalk next to Yanagi Koen, it is practically unrecognizable these days. As you can see from the photos, it looks like a completely different area from what we see in the film.
Naturally, it is rather difficult to find comparison photos of Yanagi Koen from the time Godzilla vs. Megalon was shot, but it is possible that the park underwent some major changes over the years. Otherwise, perhaps the sign was pointing visitors in the direction of the park. Whatever the case, at least we can say with some certainty that Yanagi Koen does play a part in the film.
Yanagi Koen is about a five-minute walk from Suzukakedai Station on the Den-en-Toshi Line. While I would not consider it a major filming location, it is nonetheless an interesting part of Godzilla history, especially for those wanting to check out more than just the routine kaiju locations like Tokyo Tower.
It's also just a nice park to visit, even if it is off the beaten path. But, for those Japan travelers who have seen and done it all, it is well worth a look.