Posted on: September 25, 2024, 05:25h.
Last updated on: September 25, 2024, 05:25h.
The next chapter of the storied Tahoe Biltmore Lodge & Casino is in jeopardy after the development group that acquired the historic property in 2021 defaulted on a more than $100 million loan.
SFGATE.com broke the news that EKN Development, a real estate firm based in California’s Newport Beach, stopped paying back a loan it took out in 2021 to acquire the Crystal Bay property. EKN bought the Tahoe Biltmore for $56.8 million in September 2021 and shuttered its operations in April 2022.
Financial reasons have kept wrecking balls from meeting the Tahoe Biltmore. The property, which ran for 76 years, remains gated and boarded up, with its future unknown.
Auction Announced
First American Title has been appointed the trustee on behalf of the investors who EKN isn’t paying back. The settlement services provider says EKN’s loan with interest, fees, and other expenses is now upwards of $110 million.
EKN told SFGATE that it’s not insolvent and only trying to refinance.
EKN is working diligently to restructure the existing loan and expects to complete this process in the next three to four months,” said EKN President and CEO Ebbie Nakhjavani. “In the meantime, EKN is continuing to invest in the project and construction activities are continuing at the site.”
First American Title is moving forward with auction plans in the interim. The company has scheduled an Oct. 8 auction for the 15-acre property. That gives Nakhjavani less than two weeks to find new funding and pay back the original principal.
In April, when the news first broke that EKN wasn’t paying its lenders, Nakhjavani said “multiple institutions” were interested in his Waldorf Astoria vision.
The auction news is nonetheless yet another disappointment for the Crystal Bay community, which continues to be promised big investments to overhaul its once lively gaming and resort market that fail to materialize.
Oracle billionaire Larry Ellison had planned to invest heavily in renovating the storied Cal Neva, a Rat Pack hangout briefly owned by Frank Sinatra, after buying it in 2018 for $35.8 million. The billionaire’s enthusiasm waned during the COVID-19 pandemic.
Ellison eventually sold the historic property that straddles the California-Nevada border last year. Ellison also owns the Hyatt Regency Lake Tahoe, a resort he bought in 2021 for $345 million.
Waldorf Astoria Lake Tahoe Vision
The Waldorf Astoria Lake Tahoe, along with its hotel and residencies, was to include a resort pool and several restaurants highlighted by the luxury hotel brand’s signature Peacock Alley. A promenade with almost 19,000 square feet of retail shopping was also included in the Waldorf concept.
Gaming was additionally set to return, albeit in a smaller manner. EKN suggested it would build a 10,000-square-foot boutique casino with a few dozen slot machines and select table games.
The Tahoe Biltmore site was also to gain lake access for the first time. After acquiring the lodge and casino, EKN paid $18 million to purchase 10 run-down cabins on the Beesley Cottages property.
EKN planned to remove the cabins to transform the property into a 3.5-acre beach club. A shuttle was to transport guests to and from the Waldorf to the lakefront amenity that’s more than three miles away on the California side of town.
