BERKELEY - A century-old gray castle looms high over the pine trees of Berkeley, a monument to a time that existed so briefly in this Ocean County neighborhood that it almost never happened.

Seven stories high, this nearly century-old Spanish Renaissance-style structure appears out of place — eerily institutional — among the modern suburban homes and schools stretching through the trees of the Pinewald section of Berkeley.

For nearly a century, this concrete Goliath has been the subject of mobster folklore and local ghost stories. But before the legendary Royal Pines Hotel failed in this tree-lined neighborhood, it was to be the centerpiece of a dream city that never materialized.

The Royal Pines Hotel was originally a vacation sanctuary for Philadephia's and New York's wealthy elites, people who took trains to the sweet pine air and bay amenities. The hotel overlooked forest and had sweeping views of the man-made Crystal Lake, tennis courts and an 18-hole golf course. Vacationers spent afternoons strolling the hotel's sidewalks to the bay or horseback riding.

The Royal Pines also developed a hushed reputation as a place to imbibe in illegal alcohol during the final years of Prohibition.

At its opening in 1930, a newspaper article described the hotel as having a barbershop, Turkish baths, beauty parlor and lakefront villa attached to the hotel by underground passages.

Rumors circulated, and continue to this day, that the hotel was a hangout for gangster Al Capone.

Berkeley residents also still talk of the secret tunnels where bootleggers allegedly moved shipments of alcohol from Barnegat Bay to the hotel.

Gerald Beer, president of the Berkeley Township Historical Society, said there is little evidence Capone was ever a guest at the Royal Pines.

"There are no records to say he did or didn’t," Beer said.

In addition, "the rumors about the (secret bootlegger) tunnels are a lot of a baloney," he said.

In reality, the glory days at the Royal Pines were short-lived. Almost immediately after completion, changing American vacation norms, scandal, the Great Depression and poor placement ruined this once elaborately decorated hotel built on a lofty dream.

At its inception, the Royal Pines was to be at the center of a sprawling community of some 300,000 residents; at least that's what developer Benjamin W. Sangor envisioned and sold to investors.

Yet before the hotel was open, the first hints of disaster were taking shape. Sangor was named in a lawsuit accusing his company of fraudulently selling 80 acres in Pinewald to the Toms River Amusement Co.

A year after the Royal Pine's opening, the Keen Kote Plastic Studio of Philadelphia sued Sangor, saying he did not pay for plaster work worth $11,386 — the equivalent of about $191,871 in 2019 dollars.

Scandal soon soured the public's opinion of Sangor, but there was another, more powerful force at work against the hotel's success: Royal Pines opened just a year after the stock market crash of 1929.

Just two years after its opening, the Royal Pines was already up for sale. By 1935, the $1.5 million hotel (nearly $25.3 million in 2019) was in bankruptcy and sold for just $50,000, according to the Berkeley Historical Society

And the scandal continued to grow.

Sangor and partner Anthony M. Then, president of the mortgage company called Toms River Trust, found themselves in court again and again on accusations of fraud over the hotel's finances and the housing lots surrounding the facility.

By 1935, both were convicted of embezzlement and of having appropriated $81,000 worth of securities (nearly $1.4 million in 2019) in nearly worthless hotel bonds. About $75,000 worth of Royal Pines Hotel bonds sold for only $30 in the early 1930s, according to Asbury Park Press articles at the time.

The 8,000-lot housing development around the Royal Pines was never realized — titles were not always clear on the lots and in some cases. Sangor's company was accused of selling the same lots to different owners.

Instead of a luxury getaway, the Royal Pines was transformed into a hospital, and has spent more than 84 years as a health care center for this community. Its names have changed over decades — the Dennis Memorial Hospital, the Pinehaven Nursing Home and Sanitarium, the Bayview Convalescent Center — but its use as a healthcare facility continues today.

In 1999, the Royal Pines was renovated and took on the name it still bears today: The Crystal Lake Healthcare & Rehabilitation Center.

This 235-bed facility still has some of the hotel's former facade and interior flourishes, but it never succeeded as a luxury hotel.

The sprawling city at its feet also never came to be.

Today, Berkeley is home to more than 41,000 residents, a fraction of the 300,000-resident city envisioned by Sangor some nine decades earlier.

Sangor fared better than his hotel and planned community. After serving his prison sentence, he went on to help form the American Comics Group. After his death in 1953, he would be better remembered for his work as a comic book and pulp magazine publisher than for his failed hotel in the pines.

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Amanda Oglesby is an Ocean County native who covers Brick, Barnegat and Lacey townships as well as the environment. She has worked for the Press for more than a decade. Reach her at @OglesbyAPP, aoglesby@gannettnj.com or 732-557-5701.