October 22, 2011; Wall Street Journal | If you don’t know why so many people sympathize with the Occupy Wall Street movement, read about Jacqueline and David Siegel. Wealthy due to David Siegel’s stake in Westgate Resorts, the largest time-share company in the United States, the Siegels were building a 90,000-square-foot house in suburban Orlando, Florida, when the credit crunch hit. Their home, modestly named “Versailles,” was to have an indoor bowling alley, indoor relaxing pools, 23 bathrooms, 13 bedrooms, 2 movie theaters (designed as French opera theaters), a 20-car garage, a wine cellar for 20,000 bottles of wine, an 80-foot waterfall, and 10 Segways to get around the house because it was so large. Tearful Jacqueline can’t finish the monstrosity because Westgate Resorts had about $1 billion in debt—with a good chunk co-signed directly by the Siegels—and the banks called the loans on their wannabe Xanadu.
As reported by the Wall Street Journal, “Versailles was supposed to be done by now. The Siegels were supposed to be living their dream life—throwing charity balls and getting spa treatments downstairs after a long flight on their Gulfstream. The home was the culmination of David Siegel’s Horatio Alger story, from TV repairman to chief executive and owner of America’s largest time-share company . . . with more than $1 billion in annual revenue and $200 million in profits.” With the bank loans called, the Siegels are now selling the real estate atrocity for $75 million unfinished, $100 million finished.
Why did the Siegels decide to build this thing? “Because I can,” said David Siegel. “I was cocky and I didn’t care what the house would cost because I couldn’t spend all the money I was making.” Unable to finish their palace in Windmere, the Siegels have to make do living in their 26,000 square foot home in Islesworth, which also counts Tiger Woods as a resident.
So sad. Jacqueline Siegel misses their Gulfstream, which was repossessed when the Siegels defaulted on an $8 million jet loan. As a result, the Siegels children are confused when the family flies by commercial jet and wonder “what are all these strangers doing on our plane?” They had to fire 14 of their 15 housekeepers as well as their private chef, and the kids were pulled out of private schools and enrolled—oh, the horror!—in public school.
What makes this a nonprofit story, besides its obvious consonance with the message of the Occupy movement? A couple of things. David Siegel couldn’t spend all the money he was making? C’mon! His Westgate Resorts firm had two foundations, the Westgate Foundation (for scholarships, medical assistance, and funeral costs of Westgate and Central Florida Investments employees) and the Westgate Resorts Foundation (which made a variety of donations to local charities). The foundations received contributions not just from Siegel but also from other individuals and companies, including contractors, so it wasn’t all Siegel money. According to the 990s, the payouts of the two foundations were as follows (including some Westgate Resorts Foundation grants to the Westgate Foundation):
Westgate Resorts Foundations grants
Westgate Foundation grants
$810,587 (incl. $80,000 to Westgate Foundation)
$624,655 (incl. $130,000 to Westgate Foundation)
Do realize that even in the down year of 2009, the Resorts Foundation found $25,000 to give to the Miss America Pageant scholarships, compared to $50,000 the year before (Jacqueline Siegel is apparently some sort of former beauty queen). The Siegels were spending more on their Versailles knick-knacks than they were giving to their foundations and charity—Siegel could have found ways of disposing of his disposable income beyond the Siegels’ apotheosis of how the 1 percent lives and indulges.
The other nonprofit dimension? Without the 90,000 square foot Shangri-La, Jacqueline rues the lost opportunities of hosting charity balls. And due to their financial woes, she has started a nonprofit “mega thrift-store” called ThriftMart to sell donated clothes.
And you wonder why there is an Occupy Wall Street movement?—Rick Cohen