Billionaire goes all-in on Cal Neva Resort & Casino
When the owner of Cal Neva Resort & Casino in Crystal Bay filed for bankruptcy in June 2016, the move touched off a prolonged court battle that has kept the storied property in limbo and shuttered.
The filing by debtor New Cal-Neva Lodge LLC of St. Helena, California, led creditors to line up for millions of dollars owed to them for financing purposes or services rendered for a highly touted renovation project.
Roughly 18 months later, the major creditors in the case are about to get paid, provided a deal with an investment firm backed by Oracle Corp. co-founder Larry Ellison gets wrapped up by Jan. 10, 2018.
Documents filed with the United States Bankruptcy Court in Reno show Lawrence Investments LLC will pay $35.8 million for the Cal Neva Resort & Casino, which straddles the California and Nevada border.
The bulk of the cash is designated to Hall CA-NV LLC, a Texas-based limited liability company that arranged financing for the renovation project.
As a result of the agreement between Lawrence Investments and creditors, Hall will receive “the approximate sum of $26,885,000,” bankruptcy court documents showed.
The Penta Building Group of Las Vegas, which was the general contractor for the renovation project, as well its sub-contractors and D4US LLC of Incline Village, will receive $8,025,000 to settle their claims in the case. The bulk of that money goes to Penta Building Group, which had filed a claim of about $7.1 million with the bankruptcy court.
The agreement marks a stark turnaround from a few weeks ago when the sale appeared to be doomed, bankruptcy court documents showed.
“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,” Assistant United States Trustee Nicholas Strozza wrote in the filing on Nov. 24.
Strozza also asked that the case be tossed out of court. But the circumstances have changed since that time, and possibly the fortunes for Cal Neva Resort & Casino.
The turnaround has left local officials feeling better about the outlook for Cal Neva Resort & Casino even though it remains unclear what Ellison plans to do with the property. Nothing in the court documents, examined by the Sierra Sun, indicates what’s in store for Cal Neva Resort & Casino.
“TRPA (Tahoe Regional Planning Agency) has not yet heard from anyone regarding the future of the Cal Neva project,” said Tom Lotshaw, public information officer for TRPA.
“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.”
The bankruptcy proceedings are a byproduct of the spring 2013 purchase of Cal Neva Resort & Casino by Criswell Radovan, a Napa Valley-based real estate firm also doing business as New Cal-Neva Lodge LLC. The resort was later closed in September 2013 for a multimillion-dollar renovation.
“With the reopening, there will be a rebirth … it will be a totally different creature,” said Robert Radovan, co-owner of Criswell Radovan, and controlling partner of the property at the time.
“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.”
That heyday included the memorable era in the 1960s, when the resort was owned by Frank Sinatra and frequented by the likes of the Rat Pack, Marilyn Monroe, members of the Kennedy family, and mob figures such as Sam Giancana.
However, a series of delays over the years pushed back the grand reopening of Cal Neva Resort & Casino to the point where it never happened. Then, in July 2016, New Cal-Neva Lodge LLC filed for bankruptcy in the midst of the renovation.
“We’re looking forward to getting that opened up,” said Andy Chapman, president and chief executive officer of the Incline Village Crystal Bay Visitors Bureau, who got an up-close view of the renovation awhile back. “I hope this sale goes through. We do need that building.”
Originally built in 1926, Cal Neva includes 219 rooms and cottages, restaurants, a spa, open space featuring panoramic views of Lake Tahoe, and a tunnel system Sinatra added so his less reputable buddies could move around unseen.
The property also features a 350-seat show room, 16,000 square feet of meeting space, and the Circle Bar.