|By Dale Kasler, The Sacramento Bee,
Calif.McClatchy-Tribune Regional News
Apr. 9, 2009 - Unable to find a buyer for the ailing Lake Tahoe casino once owned by Frank Sinatra, the resort's reluctant owner said it will keep the place open anyway.
The Cal Neva went up for sale Wednesday at dual courthouse auctions in Roseville and Reno, but there were no bids. The 83-year-old property lies in both California and Nevada, on Tahoe's north shore.
The failure of the auction means ownership remains with an affiliate of Los Angeles real estate investment firm Canyon Partners. Canyon foreclosed on the Cal Neva last month after its former owner, a beleaguered Los Angeles businessman named Ezri Namvar, defaulted on a $25 million loan.
"We're going to assess the property and its future," said Canyon spokesman Steve Sugerman. "We have no intention of closing it." He said Canyon will likely install new management soon; the Cal Neva has been run by a court-appointed receiver since February.
Yet Bill Eadington, a gambling expert at the University of Nevada, Reno, said the Cal Neva's future is clouded by a weak economy and other factors.
"It's not likely to be viable as a casino, not likely to be viable as a destination resort," said Eadington, who lives about a block from the Cal Neva.
Court records show the Cal Neva has been losing money. Tahoe's north shore has long been a weak casino market, and the recession has been devastating. Gambling revenue on the north shore fell 24 percent in February from a year earlier, according to the Nevada Gaming Control Board.
Canyon was insisting on a minimum bid of $15 million for the Nevada side of the property, which includes the casino, at the auction. It wasn't clear what the minimum bid was for the California side.
Canyon accused Namvar, who bought the Cal Neva for $30 million in 2005, of running the place into the ground. It seized control of the Cal Neva after Namvar, facing $1 billion in debt, was dragged into personal bankruptcy.
Namvar was the latest in a series of owners who tried to recapture the glamour of the Sinatra era.
Call The Bee's Dale Kasler at (916) 321-1066. Read his blog on the economy, Home Front, at www.sacbee.com/blogs.
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