Reno-Tahoe casino revenues shrank as much as 6.7% year-on-year in some months during 2017.
Oracle co-founder Larry Ellison finally closed the deal to buy the Cal Neva Casino this week. Throughout November and December, it was rumored that Larry Ellison was buying the famous resort through a bankruptcy auction, but the deal had yet to be finalized.
Back in June of 2016, Cal Neva Lodge & Casino in Crystal Bay, which once was owned by Frank Sinatra and Dean Martin, went into bankruptcy. Back in the late-1950s and 1960s, the Cal Neva casino that was once the place to be for A-list celebrities and America’s wealthiest citizens, but in 2016 it in danger of closing down altogether.
Since then, the property has been hanging in limbo. New Cal-Neva Lodge LLC of St. Helena, California, filed for bankruptcy in June 2016, causing a wave of creditors to file millions of dollars worth of claims owed by the company. Most of those debts were racked up during the full and extensive renovation project.
Larry Ellison’s bankruptcy bids will allow those creditors to be paid, at which point the billionaire Silicon Valley tech mogul will own the Cal Neva Casino. The deal is expected to be wrapped up by Jan. 10, 2018.
Larry Ellison Buys Cal Neva Resort
According to documents filed with the United States Bankruptcy Court in Reno, Ellison’s holding company, Lawrence Investments LLC, will pay $35.8 million for the Cal Neva Resort & Casino.
Hall CA-NV LLC, a Texas-based limited liability company, is the major creditor. Hall CA-NV financed the latest renovation project. Court documents showed that Hall will receive “the approximate sum of $26,885,000.”
The general contractor for the project, The Penta Building Group of Las Vegas, along with its sub-contractors and D4US LLC of Incline Village, is set to receive $8,025,000 out of the settlement, with most of that cash going to Penta Building Group. Penta filed a claim with the bankruptcy court of roughly $7.1 million.
Sale Nearly Did Not Happen
Just a few weeks ago, the sale appeared as if it would fall through. Nicholas Strozza, Assistant United States Trustee, noted in the filing on Nov. 24, “The U.S. Trustee is informed and believes the stay of the proposed sale is for a longer period of time than the proposed buyer (Ellison) will accept.”
At the time, Strozza had recommended that the case entirely be thrown out of court. The circumstances have changed and there now seems to be a future set for Cal Neva. The bankruptcy court still has not set a firm date.
Ellison’s plans for the Cal Neva Casino & Resort are unknown. Given Larry Ellison’s financial resources, local officials are optimistic the casino will reopen.
Tom Lotshaw, a spokesman for a Tahoe-area planning agency, said, “TRPA (Tahoe Regional Planning Agency) has not yet heard from anyone regarding the future of the Cal Neva project. TRPA supports the approved project for the revitalization and environmental improvements it would bring to this iconic property, and the agency is willing and able to work with any potential new owner to help keep a good project going.”
Cal Neva: The Rat Pack Era
The bankruptcy filing was written to attract buyers, but also describes the Cal Neva Resort in fine detail: “The original Cal Neva Lodge & Casino is one of the most historically rich and beautiful properties located anywhere in the State of Nevada.”
“The property was originally constructed in 1926, and is nestled in the tall Ponderosa Pine trees on Lake Tahoe’s crystal-clear north shore. In 1960, Nevada legend Frank Sinatra purchased the property and turned it into a top-notch gaming destination for the rich and famous.”
At one time, Cal Neva Casino was one of the places to be. Cal Neva was opened in the 1930s in Tahoe on the California-Nevada state line (giving the casino its name) after Nevada first legalized casino gambling. By the 1950s, the resort was famous enough that the Kennedy Family vacationed there at times. Members of the Rat Pack played there – and even spent leisure time in the Reno-Tahoe area.
In 1960, Frank Sinatra joined with Dean Martin and Chicago mob boss Sam Giancana to purchase the casino. By that time, Cal Neva’s many well-known visitors included actresses Marilyn Monroe, Judy Garland and Lucille Ball, baseball legend Joe DiMaggio, and of course Sinatra’s Rat Pack pals Dean Martin and Sammy Davis, Jr.
There was a seamy side to the glamor, though. One week before her death in L.A., Marilyn Monroe made a suicide attempt while staying at the Cal Neva resort. Later in the decade, officials threatened to revoke the casino’s gaming license, because Sam Giancana visited the place and was (rightly) rumored to be a silent partner.
Cal Neva in the 21st Century
In recent times, Cal Neva’s profile has not been so glamorous (or scandalous). Back in the spring of 2013, Criswell Radovan, a Napa Valley-based real estate firm, purchased the Cal Neva Casino & Resort and aimed to give it face lift. The bankruptcy proceedings are a byproduct of the purchase. The casino and resort closed in September of that year for the multimillion-dollar renovation.
Robert Radovan, co-owner alongside Criswell Radovan, spoke highly about the newly revamped casino, saying, “With the reopening, there will be a rebirth…it will be a totally different creature.”
“Our goal is to be the entertainment center of the North Shore. The Cal Neva has always been an icon of the North Shore. With a new look and a return to a four- or four-and-a-half-star hotel … we plan to bring it back to what it was in its heyday.”
2013 Renovation Plans
The developers had a goal to construct a new resort as a throwback to the glory days. With a $29 million loan from Hall Structured Finance, they planned a renovation which would have included a 10-story hotel tower and small casino.
Expectations diminished after several years passed and the grand reopening continued to be pushed back. The Criswell Radovan group defaulted on $7.5 million in financing in 2016, which caused the lender to refuse a loan of another $10 million to finish the project.
In July 2016, with the renovation still incomplete, New Cal-Neva Lodge LLC filed for bankruptcy.
Cal Neva Resort’s Amenities
It includes 219 rooms and cottages, restaurants, a spa, open space featuring panoramic views of Lake Tahoe. It also has a 350-seat showroom, the Circle Bar, and 16,000 square feet of meeting space. What is unique about the casino is the tunnel system that Sinatra had built, which allowed his VIP visitors to arrive unseen.
