Tahoe historic resort deal helps tech tycoon Larry Ellison grab profit
A renowned and historic resort perched on Lake Tahoe’s shoreline has been bought and is headed for a dramatic revamp in a deal that bestowed a tidy profit on the property’s seller, tech tycoon Lawrence Ellison.
Cal Neva Lodge, which straddles the California-Nevada border on Tahoe’s north shore, has been bought by a real estate investment firm that plans to revive the old resort — whose owners have included Frank Sinatra — as a boutique luxury hotel.
The deal’s value is in the neighborhood of $58 million, according to real estate records on file in Nevada’s Washoe County and public documents in California’s Placer County.
This means Ellison appears to have turned a profit on the property, which the Oracle founder bought in 2018, according to a deed filed at that time. Ellison, acting through a venture capital affiliate, paid $38.6 million for the property.
Over the five years that Ellison owned the property, little if any work was done on the site.
That’s about to change, according to Cal Neva’s new owner, McWhinney, a real estate investment and development firm. Hayes Barnard, a veteran tech entrepreneur with expertise in the green energy and sustainability sectors, has joined the development venture as a lead investor.
“We are thrilled for the opportunity to craft the next iteration of this one-of-a-kind resort,” said Chad McWhinney, chief executive officer and co-founder of McWhinney. “The acquisition of Cal Neva is a perfect complement to our existing award-winning hospitality lifestyle portfolio.”
Originally constructed in 1926, the resort burned down in 1937 and was later rebuilt. Over the decades, the Cal Neva resort, including the lodge, a casino, guest cabins and other facilities, has served as a destination getaway for the famous and the infamous alike.
Guests during the Cal Neva heyday included former President John Kennedy; actresses Marilyn Monroe, Judy Garland and Lucille Ball; Sinatra’s Rat Pack pals Dean Martin and Sammy Davis, Jr.; actor Cary Grant; and baseball legend Joe DiMaggio.
On the notorious end of the spectrum: Famed crime boss Sam Giancana, a rumored silent partner of Sinatra, visited the resort frequently, prompting authorities at one point to pull the casino’s license.
The Cal Neva tumbled into bankruptcy in 2016 after a court dispute over a $49 million overhaul of the complex, legal records show. The bankruptcy filing describes the property in colorful terms.
“The original Cal Neva Lodge & Casino is one of the most historically rich and beautiful properties located anywhere in the State of Nevada,” the bankruptcy court records state. “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.”
In recent decades, the rise of Indian casinos throughout California has chipped into the demand for casinos in Nevada. The Nevada resorts have revamped themselves as tourist attractions and vacation destinations, with gambling a less crucial element of their cash flow.
The Cal Neva Lodge struggled because it couldn’t adapt rapidly enough. Criswell Radovan, a realty firm based in St. Helena, bought the property in 2013, closing it for a far-reaching makeover. The casino hasn’t reopened since.
The new owners aim the restore the resort to its old glories.
“We’ve enjoyed being a leading investor in multiple McWhinney hospitality projects, including the Austin Proper Hotel, and believe strongly in their expertise and ability to transform the Cal Neva back to the iconic property it was in the 1920s,” said Barnard.
McWhinney’s project team intends to team up with The Kor Group to reposition the 13-acre Cal Neva site as a hotel under the Prosper brand.
“We strive to create an experience that is anchored to its location and creates long-term lasting value that supports the local community,” said Brad Korzen, chief executive officer with Proper Hospitality.
The new owners believe the shuttered complex can once again become a Tahoe destination.
“Our vision is to reimagine and revitalize this iconic resort with deep historic roots into an exceptional experience for guests and the local community,” McWhinney said.