The 407-acre wooded site, complete with guard towers and a stone house with 18-inch-thick walls, will soon go on the auction block at a starting bid of $2.6 million.
The bank that foreclosed on the land near Couderay, about 140 miles northeast of Minneapolis, said Capone owned it in the late 1920s and early 1930s during Prohibition when liquor was banned. Local legend claims that shipments of bootlegged alcohol were flown in on planes that landed on the property's 37-acre lake, then loaded onto trucks bound for Chicago.
"He spent a lot of time there," Chippewa Valley Bank Vice President Joe Kinnear said. "Whether it was for getting whiskey out of Canada or whoever knows. It is an incredible property."
The property was more recently used as a tourist attraction. It includes Capone's two-story stone home with a massive fireplace, two guard towers — reportedly manned with machine guns whenever Capone visited — a caretakers residence and other outbuildings.
Kinnear said the bar on the property was built from what was originally Capone's eight-stall garage and still includes some portholes built to shoot through.
"It's pretty neat," he said.
The bank will auction off "The Hideout, Al Capone's Northwoods Retreat" on the steps of the Sawyer County Courthouse in Hayward on Oct. 8.
The bank acquired the property after foreclosing on owner Guy Houston and his company The Hideout Inc. in April 2008, according to court records. The Houston family bought the property in the 1950s from Capone's estate and had operated it as a seasonal bar and restaurant, known for its prime rib, and offered guided tours focusing on the Capone lore.
Kinnear said the bank's bid of $2.6 million to recover its money is not expected to be the only offer. He said two or three other bidders were interested, perhaps to use it as a retreat, and there has long been talk about developing the property.
"It was appraised years ago at $3.7 million," he said.
Kinnear declined to comment on what led to its financial troubles. Houston's attorney, Todd Smith of Rice Lake, did not return telephone messages. Houston had an unlisted telephone number.
Capone — nicknamed "Scarface" — headed a massive bootlegging, gambling and prostitution operation during Prohibition and raked in tens of millions of dollars. He was widely suspected in several murders but never charged.
He was considered the mastermind of the gangland killing on Chicago's North Side in 1929, known as the St. Valentine's Day Massacre. Seven rivals of Capone's gang were gunned down in a garage, but investigators never could collect enough evidence to put anyone on trial for the deaths.
Capone was eventually convicted of income tax evasion and spent part of an 11-year sentence at the infamous Alcatraz prison. He died in 1947.
The Wisconsin property also was advertised in Chicago, in part because Kinnear believes the Capone element could draw more interest.
"I am hoping there is some, especially with the success of the gangster movie that came out earlier this year about Dillinger," Kinnear said, referring to "Public Enemies" starring Johnny Depp as Depression-era bank robber John Dillinger.
The Hideout had been a top tourist attraction in the area, said Leslie Strapon, assistant executive director of the Hayward Area Chamber of Commerce.
"It is always interesting to go somewhere and touch that piece of history," she said. "Al Capone is definitely a public figure, a gangster he may be but still infamous."