Owners assessing Cal Neva future
April 23, 2009
CRYSTAL BAY, Nev. Since the Cal Neva Resort, Spa and Casinos bidder-free, two-state auction earlier this month, more than 25 new interested investors have inquired about the hotel and casino, said Steve Sugarman, a spokesman for owner Canyon Capital Realty Advisors.The calls have come from all over the country and locally in Tahoe, Sugarman said. Canyon Capital Realty Advisors took ownership of the property that straddles the Nevada and California state lines earlier this month after there were no bidders at the propertys two foreclosure auctions in Reno and Roseville, Calif. Canyon foreclosed on former owner Namcal after Namcal defaulted on a $26 million loan.The two-state auction process marked the market value of the 13-acre resort and dissuaded interested buyers from bidding, said Jonathan Roth, a principal at Canyon.There was very little incentive to bid on one piece if you didnt know you could successful bid on the other piece, Sugarman said. It was not an optimal environment to conduct a true auction.
A Los Angeles-based investment advisor and money management firm with more than $15 billion of capital under management, Canyon Capital Realty Advisors also has interest in other Nevada properties and companies.Canyon financed a $66 loan to renovate the Lady Luck hotel and casino in downtown Las Vegas in 2006. The property has been closed since early 2006 for renovations. The company also provided a $48.5 million short-term loan to Eastern andamp; Western Hotel Corporation and Florida Hooters LLC, the owners of the former San Remo hotel which is now a Hooters-branded casino, in Las Vegas in 2004. In 2006 Hooters replaced the loan with a public bond debt.The Greek Isles casino in Las Vegas also received a $56 million loan from Canyon in July 2007. After the owners failed to pay the balance and interest when the loan matured in 2008, a Canyon subsidiary filed in January 2009 to appoint a receiver to the property. A receiver was appointed in February.By the end of last year Canyon Capital Realty Advisors affiliate Canyon Capital Advisors sold its entire interest, about $8 million, in NV Energy. In December 2007 Canyon provided a $35 million loan to SunVest Communities, which owns properties in Florida, Arizona and Nevada.According to its website, Canyon has completed more than 226 real estate and mortgage transactions totaling more than $3.6 billion in invested capital. These investments include a mix of real estate property like retail, entertainment, multi-family, industrial, office, hospitality, land, mobile home and mixed-use and mortgage loans secured by such property types. A new management team was placed at the Cal Neva less than 24 hours after the propertys auctions April 8, Canyon officials said.The new management team NHH Hotels and Resorts focuses on turn-around scenarios, said John DePaul, president and CEO of the company.The property managements main goal is to maintain and stabilize the asset, DePaul said.In the past two weeks NHH has reached out to the local community include the North Lake Tahoe Fire Protection District, the Reno-Sparks Convention Bureau and the North Lake Tahoe Chamber of Commerce, DePaul said.