The story behind that vintage sign on the road to Tahoe

Here’s the real deal behind the historic Rainbow Lodge.

Members of the Donner Party came through the lodge grounds 

The current-day Rainbow Lodge, née Rainbow Tavern, dates to the mid-19th century. “The lodge was built around 1860 or 1870 for the railroad, but wasn’t named until 1894, from what we know,” says current owner Christopher Peatross, who purchased the lodge and grounds in 2016. The lodge served as a stagecoach stop for Wells Fargo during the years between its mid-1800s construction — which Peatross says relied heavily on wood “borrowed” from the then-abandoned railroad tunnels built by the Union Pacific on nearby Donner Summit — and 1894.

However, the circa-1870 building was constructed in an already popular resting place for travelers headed west, and the most famous travelers to stop for the evening weren’t carrying mail — they were carrying supplies to rescue the near-death Donner Party. By December 1864, the infamous Donner Party had been trapped by heavy snowfall 10 miles east at what’s now Donner Lake.

With dwindling resources and no success hunting or fishing, 17 survivors headed west in search of help. Thirty-one days later, with only seven in their group remaining, they reached Sutter’s Fort in Sacramento. Eventually, 63 days after the settlers left Donner Lake, the first relief party reached the site of the Rainbow stagecoach stop, where they made camp. Two days later, they reached Donner Lake, ultimately saving 45 people. 

Rainbow Tavern operated one of Tahoe’s first ski lifts

When stonemason and hotelier Herstle Jones bought the land in the 1920s, he expanded the property and rebranded it as the “Rainbow Tavern and Trout Farm,” marketed as a summer escape for San Francisco’s elite. A 1938 newspaper advertisement promised “accommodations with steam heat and baths,” ranging from $3 to $6.50 a day — between $62 and $135 in today’s money.    

Rainbow Tavern’s big draw at the time was its on-site ski resort facilities. In the 21st century, Rainbow Lodge has primarily served visitors spending their days at nearby Sugar Bowl Resort and Royal Gorge Cross-Country Ski Resort; it once was the site of one of California’s very first ski resorts. Installed in 1938 — one year before the opening of Sugar Bowl Ski Resort — at the cost of $12,000, the Rainbow Tavern J-Bar (or up-ski) carried guests to the top of the 350-foot hill behind the hotel.

There was also an on-site ski rental shop, and more advanced skiers could head to nearby Sugar Bowl Resort or Beacon Hill (now Soda Springs Mountain Resort). A 2013 Sierra Sun article reported that rides were 25 cents each, or approximately $5.38 when adjusted for inflation — hardly steep by today’s three-digit ski resort prices. 

However, flooding from the nearby Yuba River significantly damaged the first-floor ski shop. In February 1963, the Auburn Journal reported “branches, mud, and debris piled at the door of the Rainbow ski shop,” causing thousands of dollars in damage to rental gear. It’s likely that the flood damage, combined with the appeal of newer and larger nearby ski resorts, led to the Rainbow Tavern ski area’s permanent closure. 

The lodge’s basement has more than one murder to its name 

Though the Rainbow Lodge was a hot spot for northern California families with summers free to travel to the mountains, the basement attracted a more disreputable crowd. The Rainbow Tavern and Trout Farm officially opened in the late 1920s, and by 1935 there was already a well-publicized murder on site.

Local slot machine owner Lawrence C. Christensen was shot in the chest by tavern employee and so-called “mountain man” Lonnie Jones in a dispute over a drinking game at the basement bar (still the lodge’s game room today). News reports at the time said Jones had a “reputation for peace and quiet” but was “intoxicated, almost dead drunk at the time of the homicide.” Christensen died on the lodge’s first floor while Jones fled to a nearby cabin before being apprehended by police the following day. He was sentenced to life in prison in 1936. 

Depending on the source, though, that wasn’t the first murder at the lodge. Evidence is light, but various reports claim that the Rainbow Tavern was more likely than not a speakeasy during Prohibition. Both the current-day owners and Donner Summit Historical Society records point to a first murder, most likely pre-1933, in which a card game turned deadly. According to a 2014 article from the Donner Summit Historical Society, a player lost somewhere between $25,000 and $40,000 worth of gold in a card game. Rather than immediately paying the winner, he instead “left, and then returned with wet legs and apparently without the gold.” Supposedly, fellow gamblers took this as a sign that he had buried the gold in the river, especially since he then killed the man who’d won.

While there are no original sources to back up the tale, it’s easy to understand why no one would have filed a report or called the sheriff for a crime in an illegal speakeasy. But the allure of knowing there may be buried treasure around the lodge is still enough for some treasure hunters to justify the 10-mile drive from Truckee, metal detectors in hand. Of course, ghost hunters are also drawn to the lodge — supposedly, the murdered man still haunts the first floor.

The Rainbow Lodge today

Today, Rainbow Lodge is no longer the go-to ski lodge of yesteryear. Overshadowed by resorts like Sugar Bowl and Palisades Tahoe, Rainbow Lodge’s value declined, and it went into a bank conservatorship in 2011 following a failed plan to develop condos between the lodge and nearby Royal Gorge. It was eventually purchased for somewhere around $1 million in December 2013, though, unfortunately, it enjoyed only a brief renaissance as a hotel and restaurant before closing again in 2016. That’s when current owner Christopher Peatross purchased the property.

“The tavern is not currently open, which is something we know people would like,” he says. “But unfortunately, it had not been busy enough to keep it open and therefore failed in the past.” 

Now, Rainbow Lodge is exclusively an event venue, selling full buy-outs for weddings, corporate events and anyone else willing to meet the $9,000 minimum price tag. And as for the vintage billboard along Highway 80, it was actually made in 2020, and will likely be there until heavy snow knocks it down — but even then, any replacement will likely have the same vintage feel.

“We updated the billboard, but wanted to keep true to the historic look of the lodge,” says Peatross.

While the lodge isn’t open as a hotel, Peatross invites guests to keep an eye on its Facebook page, as it occasionally hosts public events. History aficionados are also invited to email the lodge if they want to see everything from the original architecture to historical photos to snowshoes supposedly owned by the 19th-century, on-snow mail carrier John “Snowshoe” Thompson, as the caretakers are happy to arrange visits when possible. And Peatross hopes to one day reopen the tavern and bar for drivers headed to Tahoe.

“Up until the 1950s, before Highway 80 and the Olympics, the only way to Tahoe was through the two-lane Highway 40, where Rainbow Lodge is,” says Peatross. “There were a lot of wonderful old lodges on the way up, but none are really left or have been restored like Rainbow. It’s filled with so much history.”