It was Al Capone’s hideout and Elvis’ playground. The Coast could lose it forever.

It was built as a hideout for mobster Al Capone, was a hangout for Elvis in the 1950s as he became a star and now Gulf Hills Hotel is in danger of losing that history and heritage.

An investor who wants to buy the 92-year-old resort met Thursday with the residents of the community that adjoins the 10-acre property. Walt Reinhaus shared his vision for a “luxury” RV park near the water to help make the resort profitable, along with restoring the hotel, installing gardens, reopening a restaurant, renewing the swimming pool and adding a fitness center.

“There are a lot of good things in your proposal that we really like,” one resident said, but the sticking point was the RV park. Residents said they are most concerned about the traffic on narrow roads and their property values.

“I have no interest in pursuing a project when there is community opposition,” Reinhaus said several times during the meeting. Since many of the 150 people at Thursday’s meeting made it clear they don’t want an RV park near them, no matter how luxurious, Reinhaus said he’s backing out.

But first, he said, he plans to go before the Jackson County Planning Commission Wednesday and tell them what he had planned. He suggested the homeowners get together and buy the hotel to protect it.

The asking price has dropped, from more than $6 million when it was listed for sale two years ago to $2.6 million today, said general manager Donna Brown. She estimates another $2 million to $3 million will be needed to pay to restore the siding, fix the swimming pool, which is the same one Elvis swam in, and to complete cosmetic work throughout.

“The hotel has not been sold,” she said. Reinhaus entered into a due diligence contract on May 22, she said, and he has 60 days to seal the deal or walk away.

The mob

The hotel has a colorful history from day one. It was built in 1927 by the Branigar Brothers out of Chicago, reportedly with laundered money and for Al Capone. It was fully documented that Capone lived in Del Castle in Ocean Springs, Brown said. The hotel was where his mobsters stayed, she said.

During Prohibition, they shipped bootleg alcohol out of Canada to Chicago. From there it was a straight shot by rail to Ocean Springs. “This was the hub,” she said, and from the Coast, the alcohol went by rail east and west.

Capone and his gang met outdoors around a round table, she said. If federal agents came after them by land, they had two big boats running on the water. If the feds came by water, two cars were gassed and ready to go, she said.

They probably didn’t know the feds were staying among them. Brown said she learned of this when federal agents held a reunion at Gulf Hills several years ago.

A former FBI agent out of New Orleans told her, “I have some fond memories of this place when the mob used to be here.” He said the agents would be well dressed and arrive in nice cars with pockets full of money like rich tourists. The man said his assignment was to hang out at the Pink Poney Lounge, where Elvis later performed. The man said he kept a log, but his home and everything in it was lost during Katrina.

Suite Elvis

Judy Garland, Jayne Mansfield and Marilyn Monroe were among the celebrities who stayed near the mob in the villas on the waterfront at Gulf Hills, Brown said.

Elvis wasn’t a star when he arrived in the 1950s. He was out of Tupelo and just got started in gospel music, she said. He played at juke joints and off the road places along the Gulf Coast, she said, and on the Louisiana Hayride, a radio show that launched stars.

“It was at these venues that people got discovered,” she said.

In the 1950s Gulf Hills was a dude ranch and Brown said Elvis learned to ride there. He stayed at the resort in the summers, she said, along with his parents and his band, when “Hound Dog,” “Heartbreak Hotel” and “Blue Suede Shoes” made him a star.

During these years he met June Juanico from Biloxi and they were engaged. Brown said Elvis’ manager, Col. Parker, made them sign a non-disclosure agreement that they wouldn’t reveal they were engaged.

“June actually has a copy of that,” Brown said. Juanico is the only girlfriend Elvis Presley Enterprises has recognized beside Priscilla Presley, Brown said, and her book about her time with Elvis at Gulf Hills is sold at the resort.

Guests want this connection to Elvis, Brown said. A cutout of Elvis can be seen on the second-floor balcony that leads to the Gulf Hills’ “Love Me Tender Love Me Suite” decorated in 1950s style when Elvis stayed there. The three-bedroom suite is a favorite.

What now?

The entire hotel is booked for this weekend, Brown said, but the hotel is not a money maker. The hotel has 52 rooms now but to become profitable it will take that many more, she said.

“In its heyday, it had 100 rooms,” she said, but the villas by the water and two other buildings with guest rooms were torn down over the years. Cottages can’t be built along the water in the flood zone, but there is space for an addition next to the hotel.

Reinhaus told the residents he doesn’t plan to build a hotel and he doesn’t have any problem with not being chosen as the one to revitalize the resort. But if he pulls out of the deal, is Gulf Hills in danger of closing or being demolished?

“It could be,” Brown said, “if the property gets sold into the wrong hands.”

The local families that own it are going to sell whether the neighbors approve or not, she said.

Other investors have suggested turning it into a nursing home, into storage units or tearing it down to make way for apartments. One group said the hotel was too clean, Brown said, and money could be saved by reducing the housekeeping staff and cleaning supplies.

“The hotel is impeccably clean,” she said.

She wants what is best for the hotel, the neighborhood and the staff, Brown said.

A few residents suggested to their neighbors to consider the alternatives if the resort isn’t sold and deteriorates.

“How does that improve our neighborhood?” one resident asked.

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Mary Perez is the business and casino reporter for the Sun Herald and also writes about Biloxi, jobs and the new restaurants and development coming to the Coast. She is a fourth-generation journalist.