Virginia Beach’s Cavalier Hotel is for sale

By thestoneteam • January 3rd, 2013

Cavalier Hotel is for sale

 

A view of the Cavalier Hotel looking at the East Wing. (Charlie Meads | Virginian-Pilot file photo)

A view of the Cavalier Hotel looking at the East Wing. (Charlie Meads | Virginian-Pilot file photo)

Cavalier Hotel, a stately landmark perched on a hill overlooking the Atlantic Ocean and once visited by presidents and movie stars, is up for sale.

A family feud among the property’s owners led to a court order to liquidate their assets, which include the hotel, a kyanite mine and 30,000 acres of timberland.

The 86-year-old, 110-room hotel and its 1970s-era, 282-room sister hotel across Atlantic Avenue are being marketed together.

CBRE | Hotels, which is handling the sale effort of The Cavalier hotel, did not list an asking price, but court records indicate the property to be worth around $41 million. The city of Virginia Beach has it assessed at $34 million.

“A lot of people expressed interest in it. A lot,” said Richmond attorney Thomas Wolf, who represents one-half of the Dixon family. He declined to identify potential buyers.

Gene Dixon Sr., who made a fortune mining kyanite in Buckingham County, purchased The Cavalier Hotel, now called Cavalier on the Hill, in 1960. His grandchildren, minority shareholders in the family business, sued the majority owners, their uncle and cousin, in a dispute over company profits.

The grandchildren, Virginia Beach resident Curtis Dixon Colgate and his sister, and their father who is also a plaintiff, have so far prevailed in the lawsuit. A judge in Fairfax County ordered that the family business be dissolved. (The case was moved from Buckingham County after all the judges there recused themselves.)

Colgate, his sister and their father, who own 42 percent of the business, would get 42 percent of the proceeds, Wolf said.

The defendants in the case, Colgate’s uncle and cousin, Gene Dixon Jr. and Guy Dixon, tried to stop the sale of the properties but so far have failed. After losing in state court, they are awaiting a ruling from the Virginia Supreme Court whether it will hear their appeal. In the meantime, the state judge refused to halt the sales while the appeal is pending.

In the lawsuit, Colgate and his sister said the Dixons kept company profits for themselves instead of fairly dividing them among all shareholders. The suit also says that the Dixons used company assets for their own benefit – including a beach house owned by the Cavalier Hotel and “thousands of dollars worth of meals” at the hotel – without properly compensating the company, and failed to run the Cavalier Hotel as a profitable business.

The company denied the allegations and argued that its owners had the right to use their business judgment to make decisions for it.

Besides the Cavalier Hotel , the family owns what is believed to be the largest kyanite mine in the world as well as 30,000 acres of nearby timberland. Kyanite is an exceptionally hard, heat-resistant mineral used in the manufacturing of porcelain and automotive products such as brake shoes. The family business is called The Disthene Group. Disthene is what kyanite used to be called.

A Disthene Group subsidiary, Cavalier Hotel Corp., owns the two hotels that sit on about 21 acres. The historic brick Cavalier Hotel has been visited by at least 10 presidents (three just gave speeches there) and movie stars such as Judy Garland, Will Rogers and Bette Davis.

The Richmond-based receiver in charge of the sales said in a court filing that he expects the hotel sale to be completed by May. The other two properties – the mine and the land – will be marketed in the coming months.

As of Wednesday, CBRE hadn’t yet listed the Cavalier hotel on the company’s website. Doug Henkel, a CBRE | Hotels executive vice president and the lead broker in CBRE | Hampton Roads’ Norfolk office, is overseeing the sale effort.

“This unique opportunity offers not only a historic hotel and an oceanfront hotel, but enough land area that has the potential for a really outstanding mixed-use redevelopment,” Henkel said in a prepared statement.

The receiver and attorneys for the Dixons did not respond to messages Wednesday.

By Tim McGlone
The Virginian-Pilot

History of The Cavalier Hotel

For over 80 years, The Cavalier Hotel has been the hotel that made Virginia Beach famous. Founded in 1927, the Cavalier hotel has attracted a wide range of guests and celebrities, including Dwight D. Eisenhower, Richard Nixon, and five other US Presidents. The Cavalier Hotel was also used as a naval training center during World War II.

Construction on The Cavalier Hotel Begins

It was 1926. The days of the Charleston, Calvin Coolidge, and The Cavalier Hotel. The roaring 20s were well underway when the idea came about for an unsurpassable resort to be built in beautiful Virginia Beach. As strong financial backing helped the idea become reality, the local newspaper ran a contest to name the new hotel. The names were narrowed down to the Algonquin, the Linkhorn, the Crystal, the Sea Pine, and The Cavalier hotel.

On March 5, 1926, The Cavalier Hotel prevailed as the official name, and the clearing of the land for the hotel and adjoining 18-hole golf course continued. Months later, on May 9, Mayor Tyler of Norfolk spoke at the ground breaking, setting in place the corner stone of The Cavalier hotel.

It took 13 months of steady labor to build the hotel. At times, there were as many as 225 men on the job. But in all that construction, there was not a single casualty. The building was constructed of cement-covered steel, making it fireproof before the term “fireproof” was even invented.

The men then laid in place more than half a million bricks. At the time, it was the most bricks ever used in a single building in the state of Virginia. When the Cavalier Golf Course was completed, it was 6060 yards in all, with some holes modeled after the famous North Berwick and St. Andrews in Scotland, and Chicago’s golf club at Fox Chapel. A beautiful sunken garden was planted on the South Side of The Cavalier hotel.

Its flowers were used to decorate each guest’s room, as well as the dining room and lobby. In all, The Cavalier hotel originally consisted of 195 guest rooms and 350 acres (290 acres of golf course and 60 acres of hotel property) Even from the start, The Cavalier hotel set the very highest standards of quality.

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