Owners of famed Cal Neva resort in Lake Tahoe file for bankruptcy

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After years of failed renovation efforts and bankruptcy problems, the owners of North Lake Tahoe’s most famed resort, Cal Neva Lodge & Casino, filed for bankruptcy on June 10, 2016.

The resort and casino that straddles the Nevada–California border on the shores of Lake Tahoe was built back in 1926 and was once owned by Frank Sinatra and was the stomping grounds for fellow Rat Pack members along with other Hollywood elite. Over the years ownership of the property has changed hands many times, and in spring 2013 it was acquired by Criswell-Radovan, LLC, a Napa, a California-based development company, which according to legal documents obtained by the North Lake Tahoe Bonanza, now owes creditors more than $27 million. Among its creditors, $7 million is owed to lead contractor Las Vegas-based The Penta Building Group.

On Sept 15, 2013, the new owner closed the resort for a complete renovation in an effort to restore the property to its former status during those star-studded years. Originally, the project was estimated to take a year at least and in addition to the exterior, the total renovation project was to include the famed Circle Bar, interior guest rooms, Frank Sinatra’s Celebrity Room Theater, and the restoration of the property’s original 6,000-square-foot gaming floor, according to previous media reports. The goal of the new owners was to align the reopening of the revamped resort with what would have been “Ol’ Blue Eyes” 99th birthday on December 12, 2014.

In November 2014, Criswell-Radovan secured a $29 million loan which enabled the start of construction. In addition, a $20 million equity line of credit was also obtained by the company and was financing the project, according to media reports. However, a series of delays, which were contributed to a number of factors including difficulty obtaining backing and construction delays due to weather etc., pushed the scheduled reopening into 2016. In an email to World Casino Directory dated May 18, 2016, Hilary Burns, a company spokesperson with the public relations firm Glodow Nead Communications, said only that, “Construction is indefinitely delayed.”

Also revealed in documents, was that the project’s secured creditor, Ladera Development, is also owed $7 million, and had initially set a foreclosure sale for April 20 this year. The foreclosure date, however, was extended by the creditor through June 10 this year prompting developers to file for bankruptcy on the new date, according to the Tahoe Daily Tribune.

While opening the resort this year is not likely, the company still maintains an agreement with Tahoe Regional Planning Agency (TRPA) as to the construction schedule, which must be honored in order to keep their permit active, said TRPA’s public information officer, Tom Lotshaw. In an email to the North Lake Tahoe Bonanza, Washoe County Commissioner Marsha Berkbigler echoed that sentiment and said that she was hopeful that new ownership will “jumpstart renovation at the Cal Neva.” Berkbigler also sits on the Governing Board of the TRPA as Washoe County’s Lake Tahoe representative. Hill went on to express her disappointment regarding the failure of the project and said that restoring the property into a place that people can once again enjoy after being a staple in the community for so many years, is imperative.

Owners of famed Cal Neva resort in Lake Tahoe file for bankruptcy was last modified: July 12th, 2016 by K Morrison


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