From One Chairman of the Board to Another, Ellison Buys Tahoe Resort Once Owned by Sinatra
From One Chairman of the Board to Another, Ellison Buys Tahoe Resort Once Owned by Sinatra
San Francisco Business Times
10/24/17
From One Chairman of the Board to Another, Ellison Buys Tahoe Resort Once Owned by Sinatra
By Marlize van Romburgh
Bay Area billionaire Larry Ellison is getting ready to buy a historic but rundown Lake Tahoe resort once owned by Frank Sinatra, the Sacramento Bee reports.
The founder and chairman of Oracle Corp. will pay $35.8 million to buy the Cal Neva Resort & Casino out of bankruptcy, according to the Bee. He was the only bidder for the aging hotel and casino, which has gone through a series of ownership changes since its star-studded Sinatra days.
Seller Criswell-Radovan LLC closed the resort in September 2013 for renovations but declared bankruptcy last year. The property has sat vacant and in disrepair for the last four years.
It’s not Ellison’s first move into the hospitality business: He bought the Hawaiian island of Lanai in 2012 for an estimated $500 million, including the island’s two resorts developed by Dole Pineapple billionaire David Murdock. He also owns the 246-acre Porcupine Creek estate in the California desert, a property he bought for some $43 million in 2010, as well as other hotels and luxury estates around Tahoe and in Malibu, San Francisco and Woodside.
Ellison bought the boutique Epiphany Hotel in downtown Palo Alto in 2015 for $71.6 million, or about $832,500 for each of the 86 rooms.
“There’s no question he loves trophy properties in great locations,” Alan X. Reay of Atlas Hospitality in Irvine, a consultancy that works with buyers and sellers, told the Silicon Valley Business Journal two years ago, after the Epiphany buy. “It’s hard to beat Palo Alto, Malibu and Lanai.”
The hotel buys are also a way for Ellison, with an estimated net worth of $43 billion, to diversify his portfolio. The real estate world is a “safe haven for capital,” Dharmesh Patel, executive managing director for Colliers International’s hotel practice, told the Business Journal after Ellison bought the Palo Alto inn. “You have a lot of billionaire entrepreneurs tied up into their companies. As they diversify and sell out, they are looking to diversify their asset portfolio. They’re going to start looking at real estate.”
Originally built in 1926, the Cal Neva Resort & Casino straddles the California and Nevada border. A fire destroyed the property and it was quickly rebuilt in 1937.
Sinatra initially bought a stake in the property in the 1950s and expanded his ownership to more than 50 percent by the early ’60s. Sinatra built the Celebrity Room theater, added a rooftop helipad and reportedly reopened Prohibition-era tunnels to allow members of the mob to slink around the resort unseen.
In its heyday, the inn hosted lavish parties and attracted some of Hollywood’s biggest stars, including Clara Bow, Judy Garland and Lucille Ball. Marilyn Monroe reportedly attempted suicide at the hotel a week before her death in 1962.
