Billionaire property developer Larry Kestelman has warned he is running out of patience with the Tasmanian government over a proposed $500 million development at Wilkinsons Point, telling a parliamentary inquiry he would walk away if the project was opened up to competing bids.
The National Basketball League owner fronted the state’s Public Accounts Committee on Wednesday, which is investigating whether proper process was followed when the government agreed to sell 15 hectares of Crown land to Kestelman’s company, LK Group, without an expressions of interest process.
The sale price is to be set by the Valuer-General.
Kestelman told the committee negotiations over the hotel, resort and retail precinct near MyStateBank Arena had stalled and there was no binding agreement in place.
“After six years, the patience is wearing a little thin,” he said.
“I would say that the timeframe is very much getting shorter.”
He said the obligation to develop the land was imposed on LK Group in 2020 as a condition of the government’s support for establishing the Tasmania JackJumpers NBL team and that his primary motivation had always been the basketball club.
“There’s no commercial agreement that I would rely on and, quite frankly, it would be quite ok to walk away,” he said.
The hearing also revealed a significant disagreement over the cost of making the site development-ready.
Acting secretary of State Growth Shane Gregory told the committee on Tuesday that infrastructure including car parking, water and power was estimated at $100 million.
Kestelman disputed that figure, saying LK Group’s estimates were roughly half.
“We have a very different opinion on what the cost of that should be, could be, potentially would be,” he said.
He blamed COVID disruptions and staff turnover within the Department of State Growth for the six-year delay, describing negotiations as “paused”.
Asked if he would participate in a formal expressions of interest process, Kestelman was direct: “Walk away.”
LK Group has paid no deposit on the land and no holding costs.
The state government continues to pay rates and water charges on the site.
