The merger stalled when the state government decided to reassess the peppercorn rent the tennis club paid, which was roughly $3000, and there were fears the merger would not be viable for Wests without the cheap rate.

Crown Lands recently imposed a rent of $15,000 a year, but Tamworth Regional Council has come to the table to give Wests a rebate – if it shows it is upgrading the facilities.

Council’s planning director Peter Thompson said the proposal was yet to go before council, but saw the rebate as a win-win situation.

“If providing the rebate can deliver the resurfacing of the courts, the return of the Easter Carnival and a nice public facility, then that is a good outcome for the community,” he said.

“For example, if Wests spend $50,000 replacing the surface of two courts, council would return about $12,000.

“We are prepared to support Wests with the rental payments because that's what the community expects. The club has such a long history and it would be a shame to lose that.”

Wests Entertainment Group president Rod Laing said the group’s board had yet to make a decision, but believed it would “come back as positive”.

“If those are the terms council is proposing, then I am more than happy with them,” Mr Laing said.

“It’s a strange way of doing businesses but at the end of the day, if that’s how it needs to happen, that’s how it needs to happen.

“The tennis club board, like us, want to see the club survive. We will do more than that, we will turn it into something East Tamworth will be proud of.”

Tamworth Tennis Club committee president Craig Orvad said the club was looking forward to a new chapter in its history.

“Our board was always positive about ensuring a mutually agreeable outcome,” Mr Orvad said.

“We are pleased that it is looking like that is coming to fruition and we are excited for that.”

The NSW government owns the land, but council is the reserve trust manager of the land, which means the land is leased from council.

However, the terms of the lease are determined by the government, who also approve the lease.

The state government has a policy of only approving leases with a commercial rate of rent, but allows for a 50 per cent rebate.

However with a poker machine income of more than $1m, the 50 per cent rebate was not available to Wests.