The property has fallen on hard times because of the double-whammy of the recession and competition from Las Vegas and Indian casinos. Its casino was forced to shut down in 2010 due to declining business.
During its heyday from 1960 to 1963, the Cal Neva was owned by Sinatra and became one of the most famous resorts in the country. It drew fellow Rat Packers Dean Martin, Sammy Davis Jr. and Peter Lawford, and stars such as Marilyn Monroe, Joe DiMaggio and Juliet Prowse.
Monroe spent her final weekend at the Cal Neva before she died of a drug overdose in Los Angeles in August 1962. Five small cabins, including the one where she stayed that year, also will be renovated, Radovan said. The other cabins were used by Sinatra and friends.
Sinatra himself renovated the Cal Neva, adding the celebrity showroom and a helicopter pad on the roof. He used tunnels to shuffle mobsters and celebrities beneath the resort so they wouldn't be seen by the general public. The tunnels were built in the late 1920s so liquor could be smuggled in during Prohibition.
The showroom will be improved with modernised equipment, painting and new carpets, Radovan said, and the tunnels will be preserved. Public tours of the cabins and tunnels will resume after the project is completed. Bigger plans are in store for the showroom.
"The acoustics in that place are amazing. The modernized equipment will allow for high-end concerts," Radovan said, adding the room where Sinatra, Martin and Davis once performed will continue to be named after Sinatra.
Owners hope to make the hotel a four-plus-star resort instead of a one-star by upgrading rooms with modern amenities, larger bathrooms and bigger windows offering Lake Tahoe views, he said. Plans call for the redesigned casino to reopen with blackjack and other table games.
Radovan declined to provide a cost estimate for the project, but acknowledged it'll cost a "pretty penny".
"There will be an elegant, clean, post-modern feel to it after we're done," he said.
"You don't want to lose the history of the Frank Sinatra era and eras before it. But you have to ... bring it back to where it's a modernised version of what it was in the heyday."
Owners hope to reopen the Cal Neva on December 12 of this year, which would have been Sinatra's 99th birthday. He died in 1999.
Sinatra's gambling license was stripped in 1963 by Nevada gambling regulators after Chicago mobster Sam Giancana was spotted on the premises.
The Cal Neva is one of Nevada's first legal casinos. The present resort was built in 1937, when a fire destroyed the original lodge that had opened in 1926.
