Billionaire NBL owner pays state $577 a week to rent stadium

The Tasmanian government has been leasing out a stadium to billionaire and NBL owner Larry Kestelman for less than it would cost to rent most houses in the area, a parliamentary report has found.The Public Accounts Committee found the proposed sale of Wilkinsons Point, home to the Derwent Entertainment Centre, to Mr Kestelman has exposed "serious and longstanding failures" in the management of a public asset and negotiations should be paused until some of its recommendations are implemented.The Derwent Entertainment Centre, also known as MyState Bank Arena. (ABC News: Scott Ross)The report into the sale of Wilkinson's Point found that despite six years of negotiations between the Tasmanian government and Mr Kestelman's LK Group, there is no binding sale, no business case and no agreed masterplan.It also found that the LK Group was effectively leasing the Derwent Entertainment Centre (DEC) for less than $30,000 a year."Larry Kestelman is a billionaire," Shadow Treasurer Dean Winter said."He has already sold the JackJumpers for a reported $35 million, while his company, a separate entity, is now leasing MyState Bank Arena for less than a family pays in rent for a family home in Glenorchy."The base rate rent for the DEC is $200,000 a year, adjusted for CPI.But the Tasmanian government pays the LK Group $175,000, meaning Tasmania makes less than $30,000 a year, or approximately $577 a week.The report and Mr Winter accused the government of "overstating the revenue and failing to disclose the hiring fee" during the committee process."The $175,000 annual subsidy was completely hidden from the Parliamentary Public Works Committee during its 2020 review," Mr Winter said."In the hearing, the government overstated revenues. They have never disclosed the $175,000 annual payment back to Kestelman's company."The Tasmania JackJumpers celebrate their 2024 NBL Championship win at the DEC. (ABC News: Luke Bowden)The committee found that the proposal to sell the land to Mr Kestelman began through Glenorchy City Council, before the state government took over when it acquired the DEC and the land surrounding it in 2020.Since that time, the Tasmanian government has been working exclusively with the LK Group to sell the land.In February 2025, Premier Jeremy Rockliff announced that the government had agreed to sell the Crown land at Wilkinsons Point to the LK Group "at a value determined by the valuer-general to enable the development" of:A multi-use retail precinct,A family resort; and,A hotel complex.A report released later that year by the auditor-general found "significant shortcomings in advice and process" and a lack of a government business case to support the policy.Then in an incoming government brief provided to Business and Industry Minister Felix Ellis following July's state election, the Department of State Growth warned that activating the site could cost taxpayers $100 million.The departmental brief also detailed that there was "no certainty of development or contribution to costs from LK Group"."The department's current recommendation is to cease negotiations on sale of land and consider offering the surplus land to open market," the note said.In its report, the committee found that no agreement exists on how infrastructure costs will be shared between the government and LK Group, "notwithstanding years of negotiation on this point".Wilkinsons Point sits on 15 hectares of Crown land, and is the site of the Derwent Entertainment Centre. (ABC News: Kate Nickels)It recommended that the government pause negotiations until it completes a number of recommendations, including tabling a report that sets out the status of negotiations, any revised development proposal, estimated public costs and progress on the auditor-general's recommendations.It also recommended that the lease agreement between the government and the LK Group be reviewed.Asked about the report's findings, government minister Nick Duigan said the government remains committed to the opportunities."Wilkinson's Point represents a massive opportunity for Greater Hobart in terms of new housing, activating Dowsing Point," he said. "We're committed to the project."