Inside billionaire’s bargain waterfront arena lease
Nick Wilson |
The billionaire owner of the NBL is leasing Tasmania’s largest indoor arena from its government for less than it would cost to rent a typical home in the area, according to figures from a parliamentary report.
A parliamentary committee on Monday published a report that probed the Tasmanian government’s lease arrangement for MyState Bank Arena with basketball executive Larry Kestelman.
It found his firm LK Group was effectively leasing the arena, formerly known as the Derwent Entertainment Centre, for less than $30,000 a year.
Shadow treasurer Dean Winter argued this was less than it would cost to rent a typical home in the surrounding Glenorchy area, north of Hobart’s city centre.
“(Premier) Jeremy Rockliff appears hell-bent on giving Larry Kestelman a good deal, but not at all interested in the interests of Tasmanians,” he said on Monday.
The arena is home to the JackJumpers NBL team, which Mr Kestelman owned until 2025.
Under the lease agreement, LK Group pays a base rent of $200,000 a year, but the government provides a $175,000 hiring fee contribution to support community access to the venue.
The Standing Committee of Public Accounts report also reviewed engagements between the state government and Mr Kestelman’s firm for the sale of a parcel of prime waterfront land along the Derwent River.
Mr Kestelman was first floated as a potential buyer for a Wilkinsons Point site worth an estimated $6 million in 2019, before Mr Rockliff announced in February 2025 the government had agreed to a broader sale for $500 million.
The committee found “serious and long-standing failures” in the government’s approach to the sale, which would allow LK Group to redevelop the site to include a multi-use retail precinct, family resort and hotel complex.
But the committee called for the government to pause negotiations while it resolved “deficiencies” with its approach to the sale.
The proposed sale has been in the works for more than six years, but the committee found no binding sale or agreement had been reached.
This is despite Mr Rockliff announcing the sale had been agreed to in February 2025, at which point, the committee said, only a non-binding term sheet was in place.
It also found the sale was never put to an open-market process to establish its value and that major questions about how infrastructure costs would be shared between taxpayers and the developer remained unsolved.
Under the proposal, the state government would foot the bill for enabling infrastructure at the site, which Mr Rockliff said in 2025 would cost $12 million.
But departmental assessments put infrastructure costs as high as $100 million, roughly double the estimates calculated by LK Group.
“Despite years of negotiation, there is still no agreement on how these costs would be shared between the state and the proponent,” the report reads.
Mr Winters said the findings exposed a “staggering pattern of secret deals, governance failures and a disregard for taxpayer money”.
The parliamentary committee held hearings into the arrangements in April, while negotiations over the sale of the site were on hold.
Its report made nine recommendations, including that the state government table a report on the sale of the site by November and review its lease with LK Group over the arena “as soon as practicable”.
Liberal MP Marcus Vermey authored a dissenting report, claiming the findings overlooked the complexities of ongoing commercial negotiations.
Despite the findings, the government remained committed to selling the Wilkinsons Point site, a spokesperson said.
“The Tasmanian government will review the report’s findings and recommendations, including the dissenting report,” they told AAP.
“The government remains committed to the project, which will drive economic growth and create good, well-paid jobs for Tasmanians.”
AAP