Frank Sinatra owned Crystal Bay’s Cal Neva from 1960 to 1963. That time, while brief, has defined more than any other the image and the lore of the border-straddling hotel-casino towering over the waters of North Lake Tahoe’s dramatic granite shelf.
Now, it’s software scion Larry Ellison’s turn.
Larry Ellison, founder of Oracle Corp.—the purveyor of dated, hard-to-use, soul-less software for call centers, and the guy who is the spitting image of Hans Gruber from Die Hard, bought Cal Neva Resort & Casino for $35.8 million out of bankruptcy court on Oct. 16.
There were no other bidders.
This isn’t Ellison’s first foray into snapping up undervalued/distressed properties in paradise. He recently “reopened” Lanai, the 88,000-acre, 140-square-mile island just west of Maui. When his floating playground came up for sale in 2012, the Goateed-and-V-necked One couldn’t resist and took up 97 percent of the entire island for a cool $500 million.
Since then, he has taken the former Mormon colony/sprawling private ranch/the world’s largest pineapple plantation and its 3,000 residents and folded them into his empire, creating an aspirational “sustainable society” experiment suited to the top one percent of the one percenters.
Ellison took the reins of a pair of Four Seasons resorts in the deal, and fixed them up, reopening them last year with the right amount of fanfare from trade and consumer travel pub writers who no doubt were fed and drunk into a kind of superlative-spewing stupor.
The $75 million renovation of the Four Seasons Lanai Resort (the one on the beach) has its own Jimmy Choo store and Nobu restaurant, so apparently it’s also a time capsule to 2005 and a tribute to Sex and the City seasons one through four. Nightly room and suite rates start around $1,075 to go up to $21,000, champagne bottle service in one of the resorts’ private “grottos” is around $400.
Ellison, the fifth-richest man in the world, had more than just champagne wishes and poké dreams in mind when he made his move on Hawaii. He had good intentions and said all the right things—as billionaires often do, upon his arrival. His immediate goals: creating jobs, reopening the town theater and pool, preserving or restoring the native culture and keeping the island sustainable-yet-exclusive enough to steer clear of the mid-level insurance agent and his family, the itinerant duffer on a fixed income and his/her tchotchke-seeking spouse, and $18 beer-and-burger bro-bro clones—who have taken over Maui like locusts, have been met; albeit at a cost to the actual people who call the island home.
Native and long-time residents of Lanai, mostly Filipino descendants of workers recruited in the 1920s to help James Dole farm his massive pineapple plantation, are currently being driven out in droves. Rents have skyrocketed over the past couple years, with two-and-three-bedroom shacks near the town’s center going for $2,500-$3k monthly (median household income on Lanai hovers around $22k/year or the cost equivalent of one night at the local resort pretending you’re Samantha Jones on vacay.) Small-time real estate speculators, riding Ellison’s coattails, are buying up these shacks and “Apple Storing” them to an Wayfair-type oblivion, turning them into AirBNB crash pads for profit. For around $350 a night, you can stow away in your own “artist’s retreat” and go poach the Four Seasons’ pool or enjoy the appetizer menu at Nobu with your brand-new spouse, Instagramming that #luxelife for the fraction of the cost.
Such is the destabilizing factor of inviting a billionaire through the threshold; surface improvements happen, and the money follows, but locals and their culture becomes a thing of the past.
North Lake Tahoe residents had mixed emotions Monday when the rumors were formally announced: the Cal Neva is now Ellison’s latest pet project. Ellison’s Lawrence Investments purchased outright the resort that straddles the California-Nevada border of North Shore of Lake Tahoe. The distressed property pick-up includes: a 10-story eyesore hotel tower, the acoustically noteworthy Sinatra Celebrity Showroom, the fabled underground tunnels and lots of ghosts of past drunkards under the Circle Bar basilica.
Officials from Walnut Creek-based Lawrence Investments didn’t have any comment Monday, and Tahoe Regional Planning Agency spokesman Thomas Lotshaw said the news was new to him. He noted the property’s previous developer, Napa-based Criswell-Radovan, had permits pulled for the Cal Neva’s overhaul, including his agency’s mandated grading and erosion improvement projects (the permits later expired as the project stalled.) It is unclear whether Ellison’s group will try to re-apply and finish those improvements or take a different path, he said.
The property was shuttered after decades of fly-by-night absentee ownership—and was boarded up, fenced up and given up in 2013 after nobody wanted to take the bait of a $9 million starting price on the steps of a Sacramento courthouse for the 219-room lakefront lodge.
By the end of 2014, Criswell-Radovan, the developers that would become the latest in a string of beleaguered and bankrupted owners, had bought it, started work and stopped making payments to Texas-based Hall Structured Finance that owned a $29 million note on the property. They were only midway through the revitalization project.
Criswell-Radovan co-owners Bill Criswell and Robert Radovan had been snapping up and/or managing boutique properties among Northern California’s most crushable vines for more than two decades—yet the group’s total holdings as of 2008 were reported to be in the low seven-figure range. It is often thought the Cal Neva was their big play on the cheap to bring their business back after the housing crash. It didn’t. Instead, it sunk them entirely before the doors had a chance to open.
Ellison cracking open his checkbook in Tahoe is no coincidence. After selling his home on the nearby multi- multi-millionaires’ row of Lakeshore Boulevard in Incline Village for $20 million in 2014, he set about building an 18,000-square-foot compound, with an end price tag much higher than the resort he just purchased, on the same stretch of road, less than a five-minute car ride from the Cal Neva.
What, exactly, Ellison will do with the resort, is a matter of speculation. It’s like asking me what I’d do with a new pair of Nike Dunk low “De La Soul”s. Would I: 1) Wear them and enjoy them? 2) Stash them in the closet in mint condition, to be preserved for posterity? Or 3) Throw them up on eBay after a few months and see what happens?
Ellison’s options are similar (and the price tag for the resort dug a much more shallow hole into his personal finances than a new pair of specialty Nikes would for me….) He can:
1) Finish the improvements and open the hotel: This seems the most unlikely scenario, at least in the near-term. Strategic Gaming Management, the firm previously contracted to manage the casino, will not be retained. That company’s regional operations director Eric Dale told the Sacramento Bee Monday the Ellison group has “been radio silent… I’m not exactly sure what the intention is for the property at this point.” Though that information may be anecdotal, it’s hard to imagine that Ellison has the same vision as Criswell-Radovan’s Las Vegas-based Penta Building Group and Dallas-based interior designer Paul Duesing, the firms brought on to complete the construction and interiors. The play for the previous ownership was to evoke some of the sepia-toned Sinatra-infused golden-age past for those of the Tommy Bahama and Chico’s pantsuit persuasion. The designer even said he was aiming for a “modern American aesthetic with features evoking the Sinatra ‘Rat Pack’ era” at the Cal Neva.” Likely, this would have translated to a haphazard mish-mash of Ikea’ized takes on mid-century modern, soft lighting and plenty of glass and concrete with nary a nod to the actual era. The one gem in the equation that may pique Ellison’s interest is the Sinatra Celebrity Showroom. The Voice himself spent more than a year and seven figures building out the theater to his exact acoustic specifications and it is still known throughout the industry as one of the best rooms on the West Coast. There’s no word whether Criswell-Radovan trashed the ’60s South Pacific-inspired tapestries on the wall or scrapped the red vinyl booths at the back of the house, but Ellison could be the one to bankroll top-tier talent (think Lady Gaga and Tony Bennett for the opener if he can still get up to altitude) there if he did so choose. Some place in Tahoe with a dress code this side of jorts ‘n’ tanks might also be a welcome change.
2) Take the square footage and apply it to other projects. This seems like the more likely outcome, especially in the short-term. The TRPA’s take is important, because Ellison has literally just purchased tens of thousands of square feet of developed space to potentially apply to other projects. (The lake’s governing body allows developers to move square footage around on buildable parcels that are otherwise capped.) Who knows, Ellison may need some extra coverage just to complete his latest sprawling manse, stat—and the Cal Neva acquisition may have been the cheapest/quickest way to go about it. As a show of good faith, Ellison could continue to make the necessary environmental improvements on the Cal Neva site and eventually raze the tower, which nobody would miss. In return, he would get to sprinkle the lake with vanity homes. He has a tendency to make ginormous real estate deals in tony hoods. Thinking about the time he bought up a dozen properties in Malibu in 2004-’05, including five contiguous lots on Carbon Beach which was, in that moment, the largest real estate transaction—ever—in U.S. history. If the Cal Neva is going to be his personal playground, please, just don’t take down the Monroe cabin like the last group wanted to (their idea was to build a timeshare on top of it.)
3) Sit on it and wait and see: Domestically, along with Lanai, Ellison also owns a $42 million property in Rancho Mirage and the nearby Indian Wells Tennis Garden and its associated tennis tournament. He’s still heavily involved with yachting and keeping his Oracle Team USA going. He is also one of 40 billionaires who have signed “The Giving Pledge.” Even though he has stepped down from his role at Oracle, Ellison has plenty on his plate. He also definitely doesn’t need the Cal Neva to turn a quick buck. In May of 2016, he gave $200 million to USC (a school he never attended) alone. And he’s definitely not trying to be a hotelier—Lanai, according to those close to him, was more an experiment to see if he could turn the island into a sustainable playground for his contemporaries.
It seems to me those waiting for a Four Seasons to drop on the shores of Lake Tahoe to ostensibly increase their own home values and further gentrify Kings Beach and Incline Village (if that’s even possible) should exhale. Those worried about the ultra-rich needing to land their Gulfstream G650 at Truckee Airport or who are concerned that any of the Trumps may come to visit (actually, that might be a thing, Ellison has hosted a fundraiser for Rand Paul and contributed $4 million to the Conservative Solutions PAC which funded Marco Rubio’s campaign in 2016) still probably needn’t worry much in the near future.
For now, Ellison is the biggest name to take over the Cal Neva since the sun set on Sinatra’s dream spot perched over the underwater cliffs that define the North Shore. What he does or what he doesn’t do with it is anyone’s guess… just don’t bet that it’ll benefit the full-time resident or common visitor long-term. The house always wins.
And now, we’ll play you out with a short piece on Sinatra’s time at the Cal Neva (hint, it wasn’t all ring-a-ding.)
Many recall that the Cal Neva had its heyday from 1960 to 1963, when Sinatra bought it and turned it into an unofficial playground for Dean Martin, Sammy Davis Jr. and others connected to Sinatra’s legendary Rat Pack. The party ended after an FBI agent casing the premises spotted Chicago mobster Sam Giancana. Sinatra lost his casino license and unloaded the property.
The Cal Neva has struggled ever since.
Evoking the Sinatra days at the Cal Neva as a sepia Rat Pack romp in the forest may sound good in the boardroom and look good on the brochure, but it’s an off-key attempt to frost over the uncooked parts of a rehab plan for the property and the region.
Not to mention, Frank Sinatra’s time in Tahoe was controversial, bloody and in all ways, costly.
While Sinatra did temporarily transform the North Shore into a hub for Hollywood and a seasonal Vegas North, his ownership of the property resulted in untimely deaths for those who crossed his path, broke the bonds of some of his long-term friendships, created some close calls for Camelot and melted his deepest mafia ties.
Perhaps the Circle Bar neath its stained-glass dome stands a better chance at preservation, minus the dirty dishtowel drunks and the movie floor stick of the carpet that grew long underfoot.
The refurbished 6,000-square-foot casino floor will feature table games and a slot bank. The Prohibition-era rum-running tunnels underneath the casino will reopen for tours. And the bungalows, once slated for a date with a bulldozer by a previous ownership group with visions of timeshares, will be spared the wrecking ball.
The Sins of Sinatra
The FBI knew from wiretapped conversations that Chicago mob boss Sam Giancana was a hidden owner of the Cal Neva and Frank Sinatra’s silent partner when the singer bought a minority share of the property in the spring of 1960.
Giancana called his shot early that he’d regret his silent partnership with Sinatra. Excerpted from a 1960 conversation: Giancana: I am going to get my money out of there and I’m going to wind up with half of the joint with no money. Not going to make any difference….That joint ain’t going to be no good because it’s a very short season.
Because Tahoe had an actual winter then, the Cal Neva was only open from Memorial Day through Labor Day. Sinatra and Giancana both wanted to build the business into a year-round resort and Giancana tried to borrow $3 million from the Teamsters Central States pension for it. Jimmy Hoffa said no, then later ended up searching eternally for daylight in the Meadowlands.
Sinatra, meanwhile, did his best to stock his Celebrity Showroom with notable performers of the day: Eddie Fisher, Vic Damone, Red Skelton, Victor Borge, Lena Horne, Dean Martin, Joe E. Lewis, Juliet Prowse—all names you wanted lighting up the marquee—performed there that first summer.
There was new buzz around the lodge that had carried a checkered reputation since its inception. The Cal Neva was built in 1926 by San Francisco financier Robert P. Sherman who lost everything in the stock market crash of 1929 and killed himself just weeks later. Silent film star Clara Bow made headlines losing $14k there gambling one night in 1930, the early height of The Depression. Judy Garland was discovered there in 1935. The lodge mysteriously burned down in 1937 and was built back to be the biggest casino in the US in less than 100 days.
But nobody and nothing came close to the tsunami splash Sinatra made at the property. Driven to create a gaming empire in Nevada and already part owner of The Sands, the singer’s initial 36-percent stake became a 50-percent majority share by the end of his second year as investor. Long-time manager, friend and business associate Hank Sanicola owned 33 percent and casino executive Sanford Waterman owned the other 16 percent.
With a packed house every weekend, the Lake Tahoe casino business was as sure a thing as aces over eights. It seemed there was only one man who could get in Sinatra’s way…and that man was the one who looked back at him in the dressing room mirror each night adjusting the bow tie before taking the stage.
“Frank was a most convivial host,” wrote San Francisco columnist and 20th Century gadfly Herb Caen. “He was great fun and sort of nice to people—except every now and then when he’d flip out.”
But in the summer of ‘62, The Chairman had other problems besides keeping his Showroom stocked with celebs du jour and being occasionally off-putting to admiring guests.
By June, the FBI was circling in on Giancana. Any ties between a casino business and Giancana were illegal in Nevada because the mobster’s name occupied the first line of the gaming control board’s black book (yes, it actually does exist). The Chicago mobster was the bin Laden of the gaming world and he had no business in Vegas…or Tahoe. And Sinatra knew it.
Though Sinatra tried to keep Giancana’s looming presence under wraps, that didn’t stop Sam The Cigar from making mobster-type moves on the property during Sinatra’s tenure as innkeeper. Giancana brought guys up to hit on the property (and presumably sink into the nearby deep), had a prostitution ring running from the registration desk and in one case, tried to off a disillusioned employee…having him shot after his shift right on the lodge’s front steps.
While business remained good in light of the bad dealings, the summer continued to simmer with an almost daily drama ripped straight from the pages of a pulp paperback.
One night in late-July, deputy sheriff Richard Anderson came by to pick up his wife Toni, a cocktail waitress. Toni was one of Sinatra’s girlfriends before her marriage, but her new husband still didn’t trust Sinatra around her.
It was just after his shift and Anderson was in the back of the Cal Neva talking to the staff waiting for Toni to get off work. Sinatra caught wind and stormed into the kitchen, confronting the off-duty sheriff. The pair exchanged words and Sinatra tried to kick Anderson out, resulting in an altercation. Anderson punched Sinatra in the face, sidelining the crooner from performing for a week.
Less than a week after that, the Andersons were driving on Highway 28 eastbound en route to the Crystal Bay Club for dinner. A late model convertible with California plates veered over to their side of the road and the Andersons’ car went off the road and smashed into a tree. Dick Anderson was killed instantly and Toni was thrown from the car but survived.
The sheriff’s department never determined the cause of the accident though the roads were dry and there were no other cars involved–and no eyewitnesses.
But Sinatra’s summer of ‘62 troubles had just begun. A few days after Anderson was killed, Marilyn Monroe flew to the Cal Neva with Peter Lawford and his wife Pat Kennedy Lawford in hopes of a rendezvous with Bobby Kennedy.
A boozy, criminal weekend ensued.
During the dinner, Monroe got too tipsy and was taken to her cabin where she passed out. Enter several of the resort’s prostitutes who violated Monroe, taking pictures of the starlet in compromising positions while Sinatra and Giancana both looked on and engaged in lascivious acts.
The next day, Peter Lawford told Monroe that Bobby was in Los Angeles and didn’t want to see her, speak to her or have any contact with her—ever. To add insult, Lawford also informed her of the photographs and the events from the night before.
That afternoon, Monroe attempted suicide in her Cal Neva cabin overdosing on pills. After ingesting, she was able to phone the front desk for help and was rushed to Reno in time to have her stomach pumped. She was flown home after recovering. The following Sunday, August 5, 1962, she was found dead in her Los Angeles bungalow of a drug overdose.
As the Cal Neva was readying to open in the summer of 1963, hopes were high. The day’s biggest act, the McGuire Sisters, were scheduled to perform opening weekend. Phyllis McGuire was dating Giancana and the mobster couldn’t help himself but to join in the fun.
Prior to opening day, the FBI photographed Giancana with Sinatra playing golf at Old Brockway, a nearby course, and having drinks together at the Cal Neva. The weekend came to a head Friday night when the McGuire Sisters’ manager Victor LaCroix Collins and Giancana got in an altercation in one of the property’s cabins.
The FBI caught wind of the kerfuffle and using the photos of Sinatra and Giancana on the property together, made their case with the Nevada Gaming Control Board.
Saturday morning, Sinatra made haste to the Sands in Vegas, hoping to create an alibi. Gaming Control Board commissioner Ed Olson phoned up Sinatra in Vegas pressing him on the alleged fight the night before and his recent interactions with Giancana in Tahoe. Sinatra said he’d only seen a man who resembled Giancana around the property but nothing more.
Olson didn’t want to press Sinatra, who was a hero of sorts with the Gaming Control Board. He’d saved Vegas from irrelevance when the post-war boom ebbed and the town was overbuilt. He was presently bringing a similar high-end/high-rolling clientele to Lake Tahoe. The northern and southern ends of the state both benefited from Sinatra’s presence and investment.
But the Giancana story grew legs and the press coaxed a quote from Olson that “certain discrepancies in the information provided by various people at Cal Neva (should) be resolved.”
Sinatra, infuriated, called for a dinner with Olson at the Cal Neva.
Olson denied the request.
“The more I refused the madder he got until he seemed almost hysterical. He used the foulest language I ever heard in my life,” Olson said.
Olson regrouped and invited Sinatra to meet at his office, but Sinatra didn’t show. Instead, Olson said Sinatra called him up to yell at him, “…You’re acting like a fucking cop. I just want to talk to you off the record.”
The conversation escalated and Olson said if Sinatra didn’t fess up to the Giancana sightings, he’d be subpoenaed.
The next day, two representatives from the Gaming Control Board office showed up at the Cal Neva to supervise the count. Skinny D’Amato, one of Giancana’s goons and Sinatra’s right hand at Cal Neva, followed his boss’s order to, “throw the dirty sons of bitches out of the house.”
The agents left but returned the next day only to be bribed by D’Amato to leave. Olson caught wind of the bribe and started paperwork to revoke Sinatra’s license.
When the news broke Sinatra was under investigation and would probably lose the license, Nevada’s casino operators and members of the control board did not come to his aid. The good old boys especially felt the singer had used his celebrity and mob ties to rush through the permitting process; he should’ve never been given a license in the first place.
Olson notified Sinatra he was to surrender his Nevada holdings by January 5, 1964, forcing him to fire-sell not only his majority stake in the Cal Neva but his 10 percent interest in the Sands—about $4 million worth of real estate in that day, with inflation about a quarter-billion-dollars in 2015.
Though it was Giancana’s inability to stay away from Nevada that resulted in his own black-balling, the mobster still blamed Sinatra and his temper for the falling out with the gaming commission, later telling a CIA informant Sinatra cost him half a million dollars.
“That bastard and his big mouth,” Giancana said on a wire tap. “All he had to do was to keep quiet, let the attorneys handle it, apologize and get a thirty to sixty day suspension. But no, Frank has to get on the phone with that damn big mouth of his and now we’ve lost the whole damn place.”
Nevada’s Governor Grant Sawyer supported the Gaming Control Board’s decision even after JFK, on a visit to Vegas, urged Sawyer to take it easy on Sinatra. But that’s all the Kennedy’s would do for the crooner. Lawford later said in light of the Giancana debacle and Monroe’s death that the family was done with Sinatra for good.
Hank Sanicola and Sinatra also watched their friendship of 30 years dissolve in time to their partnership in the Cal Neva. The pair never spoke again. Sinatra drove to Sanicola’s funeral a decade-and-a-half later, but never walked into the church.
It’s not that a restored Cal Neva wouldn’t bring some much-needed life back to the shores of Crystal Bay. The Boulder Bay project, a mid-aughts alleged revival of the Tahoe Biltmore, ran aground and was nearly auctioned off to pay the owners’ back taxes in 2014 before additional funding was secured. Adjacent to the Cal Neva property, the Crystal Bay Club remains viable as a tourist-driven casino and nightclub and sometimes concert destination, but has no overnight accommodations.
The Cal Neva has always been the spot with the most history, relevance and beds at the California/Nevada border of Lake Tahoe north. Like the Cal Neva itself, the old Lake Tahoe—with all its black-and-white charm—lives only in memory. Currently, a gray ankle monitor of highway encircles the dying lake like a buzzard.
The region’s slow fade is best reflected by Mother Nature’s current revolt and no crooner (or billionaire) can stop that from happening.