Brisbane’s historic People’s Palace is boarded up. Its fate lies in one man’s hands

2 hours ago 2

When four men met in a conference room of a Hilton Hotel in Japan two years ago, one walked away with ownership of Brisbane’s historic People’s Palace – or so he claimed.

The former Salvation Army hostel – better known to younger generations as a backpackers’ haunt and nightclub – has stood on the corner of Ann and Edward streets, diagonally opposite Brisbane’s Central train station, since 1911.

But in 2023, its future was – according to one man – being discussed in Osaka, more than 7000 kilometres from Brisbane.

The People’s Palace on the day it officially opened in 1911.

One of the men purportedly at that meeting was Dr Tsutomu Yamaji, who bought the heritage-listed building from the Salvation Army for the tidy sum of $3 million in 1996.

Yamaji, a Japanese orthopaedic surgeon, also owns Twin Waters Golf Club on the Sunshine Coast.

Former KPMG senior consultant Masahisa Ikehiro claims he twice met with the then-80-year-old at the Hilton Hotel in Osaka in June 2023.

“I have known Dr Yamaji for more than 30 years. I knew him originally as a client of KPMG … I worked with him closely … to manage his business and assets in Australia,” Ikehiro wrote in an affidavit filed in the Queensland Supreme Court.

Ikehiro said he received a phone call from Yamaji asking him to “help resolve issues that he had with the Palace backpackers’ hostel” in February 2023.

Ikehiro claimed he travelled to Osaka to meet Yamaji four months later to finalise a deal for the surgeon to offload the ageing building.

Owner Tsutomu Yamaji (front row, second from left).

He claims Yamaji stamped documents, as is customary business practice in Japan, to transfer the hostel for the paltry sum of $83,671.04.

However, Yamaji insisted the meeting never happened, saying it was “inconceivable” that he would relinquish an asset worth millions of dollars for that sum. He added that he had not spoken to Ikehiro since they had a falling out over an $80,000 trip to Los Angeles in May that year.

“The court is entitled to infer that this claim is a ‘try-on’,” the surgeon’s submission to the court reads.

The legal fight was just one of the many challenges facing the People’s Palace in 2023. As lawyers exchanged letters, scaffolding was being erected around the Edward Street building.

Many would remember it as the Palace backpackers’ hostel, which was operated by Tourism Adventure Group from 1997 under various brands, including Base Backpackers and Nomads.

It was also home to the infamous Down Under “Dunder” bar, where young revellers were served alcohol in “party jars” under a neon sign that read “Save Water, Drink Red Bull Vodka”.

Inside the Dunder in 2023 before it closed.

The bar also hosted hedonistic Wet Wednesdays and Friday Pillowfight Championships – an ironic chapter for an establishment opened by the Salvation Army as Queensland’s first dry “temperance” hostel.

The four-storey federation brick building, complete with ornate cast-iron verandahs, was originally a place for working-class travellers to stay.

Later, it served as offices for the Salvation Army, before it morphed into the ultimate anti-temperance establishment.

The People’s Palace was already deteriorating before the COVID pandemic brought the global backpacking industry to a halt.

Then the “rain bomb” that caused Brisbane’s 2022 floods severely damaged the building’s roof, making large parts of the premises uninhabitable.

The scaffolding sheltered patrons from the rain as they queued for the Dunder bar in 2023.

A burst water pipe on the building’s exterior did further damage, forcing the removal of a large awning above the footpath, which was at risk of collapsing.

Scaffolding was erected around the building to protect passing pedestrians and patrons, although the Dunder kept its doors open until March 2024.

But Tourism Adventure Group eventually abandoned the building, closing both the backpackers’ hostel and the nightclub.

“We couldn’t keep up with the work effectively, so it damaged all of the interior of the building to the point where we weren’t comfortable accommodating customers in there,” said Tom Cooney, who was appointed chief executive of Tourism Adventure Group in 2023.

“Since then, we’ve been in ongoing discussions with our landlord about works that are required to the property for it to be habitable again for us, and to go in and take up occupation again and start operating our business.”

The building has been boarded up for more than a year, making it a target of vandals and squatters, and raising questions about its future.

A ground-floor convenience store and a barber shop survive, but the business owners are concerned about the ageing building above them.

Cooney said he had been told that gaining access to the building was problematic.

“The work requires a crane, and the only place that’s suitable for us to put a crane is in a shared easement with the [Queensland] Law Society building next door, and the Law Society is not playing ball,” he said.

The Law Society said it had not been contacted about the works since 2023.

“The last correspondence we received from their representatives was in December 2023, advising they no longer required the use of a crane in the easement,” a spokesman said.

Tourism Adventure Group’s lease doesn’t expire until 2046, with Cooney saying it would probably be extended to account for the time they have been forced to vacate the building.

“It’s definitely a frustration of ours that we don’t have this property, the beautiful asset that it is, and it’s really not contributing to our business, as well as the fabric of Brisbane,” Cooney said.

Yamaji retained control of the prized asset, despite the legal challenge from his former business consultant. The 2023 lawsuit ended with a judge ordering Ikehiro pay the surgeon and landlord a $400,000 surety for legal costs.

The Environment Department, which is responsible for heritage-listed buildings, said it had given Yamaji and a “range of expert consultants” the relevant heritage approvals to undertake extensive repairs.

“Key works to date have included roof repairs, waterproofing, addressing water and termite damage, and significant floor stabilisation inside the building,” a department spokeswoman said.

“Restoration of the building’s original external features, such as its awnings, is also under way, with several heritage features being restored offsite and then safely reinstalled through a staged process.

“These kinds of large-scale restoration projects can take time to get right, however the People’s Palace’s owner is working through the extensive required repairs to preserve this iconic landmark.”

But sources with knowledge of the building said they were concerned about its future, claiming work done in 2023 would have fallen short of making it watertight.

“I’m very concerned. It’s a real problem for the city,” said one source, who was unauthorised to speak on the record.

A view of the People’s Palace from Ann Street, where much of the awning was removed.

Yamaji is described as a “very successful and wealthy businessman in Japan” whose main business is in medical centres.

His business interests in Queensland include Twin Waters Golf Club – which turns a profit of about $1.5 million a year, according to court documents – as well as land on the central and north Queensland coast.

In response to questions about the People’s Palace, Yamaji acknowledged the “strong community interest in the future of this important heritage property”.

“As the owner, our priority is the long-term preservation and sustainable use of the building,” he wrote from Japan.

“Once plans are formally confirmed, we will make a public announcement to the community.”

Brisbane-based architecture firm Kirk Studio was engaged to draw up plans for a refurbishment.

Kirk Studio’s vision of a refurbished People’s Palace.

“The goal is to reinvigorate this landmark with a harmonious new design that will capture the cultural history and legacy of the city,” its website reads.

“The revived People’s Palace will become a cultural destination, exciting and inspiring guests and exceeding their expectations.”

Kirk Studio’s impression of the new roof deck suites at the People’s Palace.

Without commenting on the status of the project, architect Richard Kirk said the People’s Palace was a “magnificent building and an important one in the city”.

Queensland Heritage Council chair Stuart Lummis said the People’s Palace, which was heritage-listed in 1992, was one of the most significant remaining landmarks in a city scarred by the controversial demolitions of the Belle Vue Hotel in 1979 and the Cloudland Ballroom in 1982.

“As a general principle, the heritage council is supportive of adaptive reuse of buildings, and the last thing we want to see ... is demolition by neglect,” Lummis said.

Stephen Sheaffe, AM, former president of the National Trust and the Royal Historical Society of Queensland, recalls staying at the People’s Palace with his wife in 1978.

“This building is iconic, absolutely iconic. It adds so much to the streetscape. Some buildings are non-negotiable, and this is one of them,” he said.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.

Read Entire Article