The future of the Tahoe Biltmore Lodge & Casino is uncertain after the development group that acquired the historic property in 2021 defaulted on a loan exceeding $100 million. The Tahoe Biltmore has remained closed for nearly two and a half years, and its fate hangs in the balance after EKN Development, the California-based real estate firm that bought the property, defaulted on a $110 million loan.
EKN Development acquired the Tahoe Biltmore in September 2021 for $56.8 million. Despite grand plans for the property, they shuttered its operations in April 2022. The property, which had been a fixture in the area for 76 years, now stands gated and boarded up, with financial constraints preventing any demolition or redevelopment.
First American Title has been appointed as the trustee to manage the interests of the investors whom EKN has failed to repay. The outstanding loan, along with interest, fees, and other expenses, now totals more than $110 million.
EKN President and CEO Ebbie Nakhjavani told the press that the company is not insolvent and is making efforts to refinance the loan. “EKN is working diligently to restructure the existing loan and expects to complete this process in the next three to four months,” Nakhjavani said. “In the meantime, EKN is continuing to invest in the project and construction activities are continuing at the site.”
However, First American Title is moving ahead with auction plans in the meantime. An auction for the 15-acre property is scheduled for October 8, which gives Nakhjavani less than two weeks to secure new funding and pay back the original principal.
When news first surfaced in April about EKN’s financial struggles, Nakhjavani claimed that multiple institutions were interested in his vision for converting the property into a Waldorf Astoria resort. Yet, the announcement of the auction represents another letdown for the Crystal Bay community, which has seen numerous promises of significant investment in its gaming and resort sector go unfulfilled.
Oracle billionaire Larry Ellison had also planned substantial investments in revitalizing the historic Cal Neva, a famous hangout of the Rat Pack once owned by Frank Sinatra. Ellison purchased the property in 2018 for $35.8 million but lost interest during the COVID-19 pandemic and eventually sold it last year. Ellison also owns the Hyatt Regency Lake Tahoe, acquired in 2021 for $345 million.
The Waldorf Astoria Lake Tahoe project envisioned a sprawling resort featuring a hotel, residences, a resort pool, and several restaurants, including the luxury brand’s signature Peacock Alley. The plan also included a 19,000-square-foot retail promenade and a 10,000-square-foot boutique casino with a few dozen slot machines and select table games.
Additionally, EKN intended to provide lake access for the first time by transforming a nearby property into a 3.5-acre beach club. This development involved the acquisition of 10 run-down cabins for $18 million and the construction of a shuttle service to transport guests approximately three miles to the lakefront club on the California side of town.
As the auction date draws near, the future of the Tahoe Biltmore remains uncertain, leaving the Crystal Bay community to wonder if the once vibrant gaming and resort scene will ever be restored to its former glory.
