Inside the would-be biggest house in America (© John Raoux/AP)

© 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."

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.

What's your home worth?

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.

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.

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."

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."

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.