By Kent Demaret
May 27, 1985 12:00 PM

Introducing Michael Callie the Magnificent. For his first trick Callie—a stocky, disheveled former gag writer—transforms normal buildings into King Tut-style pleasure palaces. Poof! He suddenly produces fortune-tellers, levitators, mind readers. Poof! He throws in a few predictable trimmings to distract his audience: an elegant restaurant, a flashy discotheque. And shazam! Callie, 41, has created two Magic Island nightclubs, which grossed $10 million last year selling magic as entertainment for grown-ups.

Okay, everybody. You can applaud now—because Michael Callie has conjured up a winning combination in his nighttime playgrounds. By taking fortune-tellers and magicians, as well as comics, out of seedy venues, he has made them safe for the masses. Those tricksters have given a lift to a form of nightlife that usually offers little more than neon and droning music. The result is magical profits. Since his Newport Beach, Calif. club opened in 1981, 4,000 people have joined and the place can’t fit any more; 2,800 belong to the eight-month-old Houston club. The fees are steep: $1,600 to $6,500 initiation fee, depending on frills and number of members, then $250 to $600 yearly after that. Doctors and millionaires are especially beguiled by the Magic Island.

Callie begins his show right at the front stoop. On approach, the Houston club’s giant brass doors swing silently open to a sanctum decorated with palm fronds and plush purple carpets. Plunge your membership card into the gaping mouth of a gold-plated cobra, its eyes flash red with recognition, and a sandstone wall grinds open to reveal an antechamber full of cobwebs and skeletons. A $300,000 elevator opens, begins a smooth ascension, then plunges downward as if the cable had snapped and lands alarmed first-timers in a murky pool of water that members call the Nile. “We have the Egyptian decor because magic was widely introduced in the days of Egypt’s greatest glory,” explains Callie. “Also, after the King Tut exhibit left the U.S., there was a lot of Egyptian stuff for sale at bargain prices.”

Performances take place in 11 rooms, ranging from a 125-seat auditorium to six-person private parlors. In the Den of Osiris, fortune-tellers read palms and tarot cards. In the Court of Nefertiti, dinner is served by waiters adept at sleight of hand. At Pharaoh’s Retreat, entertainers conduct séances during which the spirits of Egyptian kings—and some hidden mechanical devices—make tables rise and candles flicker. When the spirit moves them, members retreat to a disco with a roof that slides open to release simulated thunder and lightning.

Renowned magician Harry Black-stone, who sits on Callie’s board of advisers, and such master tricksters as Doug Henning and David Copperfield, perform there about twice a year. “At Magic Island you feel free to try new material and work out technical bugs,” says Blackstone. “With the audience so close, you can see the smile lines on individuals and know how it’s going over.” Callie handpicks a rotating cast of a dozen or so lesser-knowns for the regular shows. His method for choosing psychics: He stares at them and says, “Well, did you get the job?”

Callie, who was born in Detroit, moved to L.A. with his mother after his father was killed in World War II. He graduated from Hamilton High School, then got a B.A. at Woodbury University in Los Angeles before joining the National Guard. As a second lieutenant in Vietnam, he was assigned to security duty for Bob Hope’s USO tour and pumped Hope’s gag writers for tips about comedy. Back home in 1966, Callie and partner Bob Levy peddled their own jokes to comedy clubs, then wrote some gags for Lenny Bruce, Bob Newhart, the Smothers Brothers and Laugh-In. Callie and Levy produced two low-budget blue movies in the ’70s. “It was 70 dirty jokes in 80 minutes,” says Callie of his if You Don’t Stop It You’ll Go Blind. The film earned huge profits, enabling the partners to open a chain of still-thriving Texas and California comedy clubs called Laff Stop. In 1979, while scouting talent at the established L.A. magician’s club called the Magic Castle, Callie got a brainstorm: Put the same tricks in a fancier setting. The spell worked.

Callie lives with his wife, Nancy Young, 30, and son Aaron, 10 months, in a million-dollar Newport Beach home with a 27-foot cabin cruiser docked out back. Despite his success with magic, he has never lost his affinity for one-liners. Says the man who plans to build Magic Islands from London to Los Angeles: “I want signs up in every city saying ‘Last Magic Island Before Freeway.” ”