Fall of the House of Siegel

The Wild Ride of the 1%


The Siegels' dream home, called "Versailles," after its French inspiration, is still a work in progress. Its steel-and-wood frame rises from the tropical suburbs of Orlando, Fla., like a skeleton from the Jurassic age of real estate. Ms. Siegel shows off the future bowling alley, indoor relaxing pools, five kitchens, 23 bathrooms, 13 bedrooms, two elevators, two movie theaters (one for kids and one for adults, each modeled after a French opera theater), 20-car garage and wine cellar built for 20,000 bottles.

At 90,000 square feet, the Siegels' Versailles is believed to be the largest private home in America. (The Vanderbilt family's Biltmore house in North Carolina is bigger at 135,000 square feet, but it's now a hotel and tourist attraction). The Siegels' home is so big that they bought 10 Segways to get around—one for each of their eight children.


Versailles sits half-finished and up for sale. The privately owned Westgate Resorts was battered by the 2008 credit crunch and real-estate crash. It had about $1 billion in debt—much of it co-signed by the Siegels.

The banks that had loans on Versailles gave the Siegels an ultimatum: Either pay off the loans or sell the house. So it's now on the market for $75 million, or $100 million if the buyer wants it finished.


The Siegels' Versailles may be the nation's most extravagant monument to the debt-fueled, status-crazed real-estate binge of the past decade. Like many Americans, the Siegels borrowed too much, spent too much and bet that values could only go higher. Even in the age of excess, Versailles was excessive.


The Siegels show how the cycle of high-beta wealth plays out in the lives, values and economy of the rich. Before 2008, Mr. Siegel's company, Westgate, was earning hundreds of millions of dollars a year for the family. The Siegels poured $50 million into Versailles, which seemed reasonable at the time. When friends asked David why he wanted to build the largest home in America, he had a simple answer: "Because I can."

"I was cocky and I didn't care what the house would cost because I couldn't spend all the money I was making," Mr. Siegel says.

When Westgate couldn't roll over its debts, he had to bail out the company with hundreds of millions of dollars of his own. He fired half of his workforce of 12,000 people and sold off assets. Mr. Siegel says that today, Westgate is "highly profitable" and demand is strong, but revenues are still half their peak levels due to lack of financing.

The Siegels took their first hard look at their own lifestyle. They fired 14 of their 15 housekeepers and lost their private chef, named "chef Jeff." They pulled their kids out of private school and put them in the local public school.


Ms. Siegel ... does miss one luxury—the Gulfstream. After they defaulted on the $8 million jet loan, the banks seized the plane. The Siegels can use it only occasionally, with the banks' permission.

Recently, the family boarded a commercial flight for a vacation, making for some confusion. One of the kids looked around the crowded cabin and asked, "Mom, what are all these strangers doing on our plane?"

Comment: Not feeling sorry for them. More on: David Siegel’s Unfinished Mansion Raises the Bar on Excess. Photos from the WSJ

1 comment:

  1. Let's see how many Biblical rules they violate....coveting/conspicuous consumption, the principle that the truly rich man often doesn't show off with servants, cosigning for loans.....


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