Inside what would be the biggest house in America
David and Jackie Siegel's 90,000-square-foot Florida dream house spins a cautionary tale in recession economics.
© John Raoux/AP
"Our house is like a convention center compared to the other houses here," David Siegel says as he drives through The Reserve at Lake Butler Sound, a gated community in Orlando, Fla. The other houses here are not small; they average 10,000 square feet. But his home will be nine times as large.
Siegel stops at the end of Kirkstone Lane, pulls into his driveway and looks around. "Next door is a 12,000-square-foot house. That could be my maid's quarters one day," he says lightly. Then he catches himself and adds, "No, I shouldn't say that, it sounds like an insult."
David and Jackie Siegel's dream house sits on 10 acres of lakefront property. Built on a custom-made hill, it occupies one full acre and, when finished, will be the largest home in the country. David Siegel, the founder and chief executive officer of the biggest private time-share company in the world, Westgate Resorts, designed it. The Siegels named it Versailles. (Bing: How do timeshares work?)
The house is made of concrete and will be covered in white marble from Italy. It is 67 feet tall. It will have French balconies and balustrades and columns. The 20-foot-high front doors are made of a Brazilian mahogany that is no longer exported. So are the frames on the 160 windows. They cost $4 million. "Here's the great room," Siegel says as he walks in. "It's 120 feet long by 60 feet wide with a 45-foot ceiling and a big, 6-foot-high, stained-glass dome. Look at it: That's probably one of the finest domes ever made. We built the room for charity functions. We can have parties for 500 people here." Staircases sweep down two sides of the ballroom. Jackie Siegel once said she imagined herself descending on one, her husband on the other. "In fairy-tale land," he says about that. Then he points to the balcony overlooking the room: "We could make speeches from there."
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The wine cellar will have room for tastings and 20,000 bottles. "It's going to be beautiful," Siegel says as he walks back up the circular staircase to the main floor. "But I don't even like wine." Then he walks through the chef's kitchen and the family kitchen and into the living room. "Here's the part I'm going to like the best: a giant aquarium with exotic fish. SeaWorld is going to do it for us."
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David Siegel is 76, Jackie Siegel is 46, and they are raising eight children, including an adopted niece, ranging in age from 5 to 18. The home will have 13 bedrooms, 22 bathrooms and nine smaller kitchens. The kids will have their own wing with a stage, a computer center and a living room. They'll have their own movie theater. The adults will have a movie theater, too, modeled after the Paris Opera House. Downstairs will be a two-lane bowling alley, a video arcade, a roller-skating rink, an indoor pool, a fitness center, a spa and staff quarters. Outside is a half-acre deck with three pools, a waterfall and a rock grotto. Plans call for a boathouse, a guardhouse, a sandy beach, a formal garden, a baseball field and two tennis courts, one with stadium seating. (The property appraiser lists the unfinished home at 67,000 square feet; the finished house will be 90,000.)
For now, though, the house is secured with a chain-link fence and a padlock. The white marble from Italy is stacked in 200 crates in the 20-car garage. There is no electricity, no plumbing, no interior walls. The Siegels had to stop construction on Versailles three years ago when financing for Westgate Resorts faltered, putting the company and their personal fortune at risk. Versailles is only 60% complete. It's also for sale: The price was just reduced from $75 million to $65 million. "Watch your step," Siegel says as we walk out the service entrance.
A familiar story
The Siegels are not like most Americans, but theirs is a very American story. It's a tale of hard work and borrowed money, of idle consumption, wanton ambition and what happens when it all comes to an abrupt halt.
David Siegel, the son of a struggling grocer and sometime gambler, was a high-school wrestling champion, college dropout, retired television repairman and newly remarried father of six when he moved from Miami to Orlando in 1970. He came because of Walt Disney. The company was buying thousands of acres of farmland, with plans to build Disney World. Siegel became a real-estate broker, eventually acquiring property, including an 80-acre orange grove near Disney World, for himself. He was soon well off, and nearly content, too.
Then, in 1980, a businessman offered to buy 10 acres of the orange grove to build a time-share resort. Siegel had never heard of such a thing and was intrigued: He kept the land and the idea. "When we first started, there was a stigma about time shares. We were supposed to be swamp people with gold jewelry and chains," he says. "The big banks didn't want to touch us. We got the second-tier lenders."
That didn't bother Siegel, because the second-tier lenders seemed to have plenty of money. "They were throwing it at us," he says on a meandering drive around Orlando, past six of his resorts and the land where he wants to build more. The time-share business, as Siegel and others practice it, depends on cheap, borrowed money. The customer borrows from the company; the company borrows from the bank. In that transaction, multiplied by tens of thousands, Westgate makes a fortune. (Bing: Who are second-tier lenders?)
Every sales room at every one of his 27 resorts features what Siegel calls his credibility photos. "There I am with Bruce Willis, Morgan Freeman, Sylvester Stallone, Joan Rivers, Arnold Schwarzenegger. I've met everybody," he says later at Westgate Lake Resort and Spa, which has 1,100 villas. Of every 100 people Westgate pitches, 25 end up purchasing a week at one of his resorts after only 90 minutes of consideration. "It's an impulse buy," he says.
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These days, Westgate's buyers have an average income of about $75,000; Siegel describes them as Wal-Mart customers. A time share is the right to a property for a given amount of time, sold by the week. The right to an annual week at one of Westgate's resorts costs an average of $25,000 for a two-bedroom, two-bath apartment. (That does not include maintenance, which might run $700 a year). A typical buyer puts 10% down and takes out a 10-year mortgage from Westgate with a 16% to 18% interest rate. Westgate borrows against the mortgage, at a rate of 5% or 6%. More than half of what Westgate makes every year comes from that interest rate spread, according to the company's chief financial officer, Tom Dugan.
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No one at Westgate calls this subprime lending; no one at Westgate thinks of time shares as mortgage factories. But Dugan says the customer default rate is about 20%. Among those with a credit score around 500, it is as high as 50%. "Why would you be in a business like that?" he asks. "Because our cash flow was still positive, and with unlimited financing it made sense to do it. The lenders didn't have to trust the individual buyers. They had to trust the company, that we could generate a new mortgage when one went bad."
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By 1995, Siegel's first resort in Orlando, Westgate Vacation Villas, had 1,000 apartments and 75,000 owners. The city itself had become the time-share capital of the world, with Wyndham Hotels and Resorts, Marriott International and Disney building resorts near the many theme parks and attractions. "Everyone goes after the same people here," Siegel says. "We're just better at producing bodies and better at selling the bodies. We know how to close a sale. We're aggressive, but in a nice way."
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Siegel hired thousands of people to call likely prospects and offer them a cheap stay at a Westgate resort in exchange for touring the properties and listening to a sales pitch. (In 2009, Westgate paid a $900,000 settlement with the Federal Trade Commission over unauthorized phone calls by its vendors to people on the nation's "do not call" list.) Siegel also put small Westgate kiosks in hotels, theme parks and every 7-Eleven in Orlando. The best prospects, though, are references: Owners who give Westgate names of friends to contact are rewarded with cash or credits toward their maintenance fee – sometimes worth as much as $500.
By the way, why isn't **** serving time for electoral fraud?
In a February 2012 interview by Susan Berfield, Siegel elaborated:
"Whenever I saw a negative article about [Al] Gore, I put it in with the paychecks of my 8,000 employees. I had my managers do a survey on every employee. If they liked Bush, we made them register to vote. But not if they liked Gore. The week before [the election] we made 80,000 phone calls through my call center—they were robo-calls. On Election Day, we made sure everyone who was voting for Bush got to the polls. I didn’t know he would win by 527 votes. Afterward, we did a survey among the employees to find out who voted who wouldn’t have otherwise. One thousand of them said so."
Way to go Little Guy307, if I come up with any ideas I will track you down. Help out the small guy for a change. This country needs to get back to helping each other instead of always looking out for #1
I met a traveler from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed:
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
I think that Mr Seigal is an artist of such, in that he has a vision of creating masterpieces where there are non. I also don't believe he does this for his own profit, but because it's never been done before. From the story I feel he builds these homes for what he feels they all should have for his family to live, and enjoy, while in the safety of their own componds. My own beliefs about artist are that they create for themselves, and not for societys betterment (unless they are being paid to design something for others). They build for their own person satisfaction, and can give little about what others think about it. I'm very happy to for these visionaries in our lives, for I would hate to think how dull life would be without them, & I would like to thank all of the David Seigals who have created the Hearst Castles of the world for their time, effort, money, and jobs they create for us to admire, wonder, amaze, startle, or even dislike, but what imaginations they possess!!!
Wow the comments I have read here are so bitter. You all act like it's this guys fault you don't have as much as he does. You all should be ashamed!
At least he hasn't jumped down the bankrupt slide. Would most likely have been easier for him. I read over 5000 jobs lost, half of his work force, and cuts to all the rest. These are the people that after loosing their income couldn't pay their mortgage. Remember that?
The financial Institutions in this country cut commercial credit in 2007/2008. In my opinion this is one very big reason we went in economic hole. These are the guys that were paying for their loans. They should have stopped give out loans to "people" that couldn't afford them, but I guess they knew the government would jump in to save "the people". We need to get behind American Business and start building a great country again!
Best of luck to you Mr.& Mrs. Siegel. I do hope you succeed in all your endeavors.
He says people who make 75,000.00 a year are your: "wal-Mart"...People.....Nothing would suit me more than his business to go belly up and he lives on that much or less...He can't even afford to live in it now.. I think I would just keep my mouth shut if I couldn't afford to finish it...MORON...
We're neither poor nor rich, and we have a nice home. I must state that regardless of the size, cost, etc. of this home it's got to be one of the ugliest ones I've ever seen. Evidently beauty really is in the eye of the beholder.