OT OT OT
Eat your heart out Martha Stewart....
COLUMN ONE
Global's Unsinkable Captain
Gary Winnick's cable firm went under, taking
billions in investor wealth with it, but he is
lavishly restoring his $94-million mansion.
By KAREN KAPLAN and ELIZABETH DOUGLASS
TIMES STAFF WRITERS
July 4 2002
Even by the standards of Bel-Air, Gary Winnick's
mansion on Bellagio Road is lavish.
Perched on a bluff overlooking the Bel-Air
Country Club, the Georgian-style house commands
views from downtown to the coast. Its 64 rooms
include a kitchen with six sinks and enough
ovens to warm 100 plates at once. The master
suite boasts separate massage, sitting and
shower rooms. There are a dozen bedrooms and a
dozen bathrooms just for servants.
But Winnick isn't satisfied. He's spending
millions to restore the 65-year-old estate.
Inside, craftsmen are stripping away seven
layers of paint, refurbishing antique doorknobs
and light fixtures and sculpting plaster crown
moldings using techniques in vogue when the
house was built. Outside, as many as 100 workers
are resurfacing patios and replacing ailing
trees and shrubs.
None of this sits well with former employees and
shareholders of Global Crossing Ltd., the
telecommunications company Winnick founded in
1997. For a few years its stock soared on hope
and hype. Then, in January, the company filed
the fourth-largest bankruptcy case in U.S.
history, wiping out $54 billion of shareholders'
money and putting thousands of employees out of
work.
Winnick, the company's chairman and the largest
individual shareholder, lost billions in paper
wealth. But he had sold millions of shares two
years earlier, when the stock still was flying
high. He cleared more than $575 million then and
used some of it to buy his $94-million mansion--
the highest price ever recorded for a home in
Los Angeles County.
Now the 8.4-acre spread has become the stuff of
legend among those who lost their jobs,
investments or both in Global Crossing's
collapse. They see the 23,000-square-foot
mansion as symbolic of the excesses of the tech
boom, when stock options and a giddy atmosphere
on Wall Street enabled some entrepreneurs to get
rich even as the firms they led were about to
melt down.
"The company's going down the tubes, and he's
flaunting his money and spending millions of
dollars on the house," said former Global
Crossing employee Michael Nighan, who has joined
other laid-off workers in an effort to recoup
$32 million in severance pay wiped out by the
bankruptcy filing. "At this point, we're beyond
anger. Now it's amazement more than anything
else."
The house and the elaborate renovation are
lampooned regularly on a Web site run by former
Global Crossing employees. "Where do I sign up
as a subcontractor? I need a job," one former
worker wrote recently.
Other tech leaders have been humbled by the
collapse of their companies. In April, Bernard
J. Ebbers, the deposed chief executive of long-
distance giant WorldCom Inc., sold his yacht to
pay off some of the approximately $400 million
he owes on loans he used to buy now-worthless
company stock.
Enron Corp.'s former chairman, Kenneth L. Lay,
sold luxury homes in Colorado and Texas to stave
off personal bankruptcy. His wife, Linda, opened
a thrift store in hopes of raising cash by
selling family castoffs.
Winnick, by contrast, continues to pour money
into his home renovation, which is expected to
cost as much as $30 million. Because the house
is Winnick's personal property, it cannot be
seized by Global Crossing's corporate creditors
as part of the bankruptcy.
"People talk about the house all the time," said
attorney Randy Sunshine, a golf enthusiast and
member of the Bel-Air Country Club who has
watched the renovation from the five greens that
surround the house. "You can't help it--it's
just so huge and it just looms right over the
golf course. And with all of what's going down
with Global Crossing, I think there's an irony
there."
Built to Be Talked About
The mansion--dubbed Casa Encantada, or House of
Enchantment--was built to be talked about. Its
very design reflected the original owner's
determination to impress.
A gurgling fountain adorned with bronze statues
dominates the long, curving driveway, and four
slender columns frame the entrance beneath a
triangular pediment. Painted the color of white
stone and topped with a pitched copper roof, the
mansion would look at home on the Mall in
Washington.
Inside, a grand, curving staircase rises above
the entryway's parquet floor. Each step is
decorated with an oval design resembling a
seashell. The grounds--big enough to hold three
major league baseball fields--include several
lawns and plazas, elaborate formal gardens, a
tennis court, a pool, a two-story pool house and
a pair of greenhouses. Pine, eucalyptus and
other trees shield the estate from public view.
Winnick, who lives in a Brentwood estate,
declined to discuss his Bel-Air house. Friends
say the 54-year-old entrepreneur, who has
pledged more than $100 million to charity over
the years, considers the restoration another of
his many philanthropic efforts.
Previous owners opened the house for lavish
parties and fund-raisers to benefit a variety of
causes.
"It's a very handsome house," said actress Jane
Wyatt Ward, who lives nearby and visited the
house when hotel magnate Conrad Hilton was the
proprietor.
"The dining room was huge, about three times as
big as mine," said Ward, best known for her role
in the 1950s TV series "Father Knows Best." "The
living room and the library are immense. It has
very high ceilings. And there were formal
gardens. I hope when [Winnick] gets through he
has an open house so we can all see the
beautiful gardens."
The house was built for Hilda Olsen Boldt Weber,
who purchased the property in 1934 for $100,000.
A New York City nurse who married one of her
wealthy patients, Weber wanted to build an
estate that would give the impression of old
money, according to books on the history of Bel-
Air.
She hired architect James Dolena, who prepared
400 sets of plans before Weber was satisfied
with the design. The house took two years to
build and cost an estimated $2 million--$23.7
million in today's dollars--including elegant
sculptures and paintings and room upon room of
custom furniture, designed specifically for the
estate.
Poor investments and gambling cost Weber her
fortune, and she had to sell. Hilton bought the
house and its contents in 1950 for a mere
$225,000.
Hilton made few changes during his 19-year stay.
He kept the furniture, the aging French lace
curtains and the somber green paint, but
converted a playroom into a trophy room. Though
he was in his 70s when he moved into the
mansion, Hilton hosted frequent parties,
sometimes rolling up the carpet for dancing. The
house served as a backdrop for several movies,
featuring stars such as Natalie Wood, Robert
Redford and Christopher Plummer.
After Hilton's death in 1979, Dole Food Co.
Chief Executive David Murdock purchased the
property for $12.4 million and sold most of the
original furnishings and art. In the 20 years he
owned Casa Encantada, Murdock held numerous
political fund-raisers there and hosted
Presidents Richard Nixon, Ronald Reagan and
George H.W. Bush.
Winnick, himself a major fund-raiser, visited
many times while Murdock owned the house and
tried to buy it.
"He fell in love with the house," said Rosalie
Zalis, a longtime friend and executive director
of the Winnick Family Foundation, the vehicle
for Winnick's charitable giving. "It's just a
beautiful property."
Murdock rebuffed several offers from Winnick
before finally succumbing, said Jeff Hyland, co-
author of "The Estates of Beverly Hills" and
president of Hilton & Hyland Real Estate in
Beverly Hills.
"He didn't want to sell, but Gary kept
sweetening the pot," Hyland said. "David finally
said, 'I've got to do this. I'd be foolish if I
didn't.' "
Winnick grew up far from Bel-Air, in the Long
Island town of Roslyn. His father owned a food
service business that fell into bankruptcy in
1960. While attending the C.W. Post campus of
Long Island University, Winnick worked as a bus
driver, a golf caddy and a ski-shop salesman.
After college, he signed on with a furniture
retailer that failed.
Then Winnick joined junk bond king Michael
Milken at Drexel Burnham Lambert, moving to Los
Angeles in 1978 to work in the bond sales
operation. The division became the centerpiece
of a fraud scandal, though Winnick never was
charged with wrongdoing. He left Drexel in 1985
to start his own investment firm.
He became a man of influence in Los Angeles,
donating heavily to political causes, funding a
children's petting zoo and pledging $40 million
to the Simon Wiesenthal Center to help pay for
an institute on peace and tolerance in Jerusalem.
In 1996, he launched what became Global
Crossing. The firm was built on a vision of
wiring the world with fiber-optic cable to
transmit phone calls, faxes and e-mails.
Winnick had little expertise in
telecommunications, but he knew how to sell. He
raised $20 billion from investors, more than any
corporate start-up ever. Over the next four
years, the company laid more than 100,000 miles
of cable across continents and beneath oceans.
Though the firm never turned a profit,
expectations that customers would rush to use
the network sent its stock soaring. Winnick was
crowned the richest person in Los Angeles in a
1999 ranking by the Los Angeles Business
Journal. His stake in Global Crossing then was
worth $6 billion.
But the network did not fill with traffic.
Demand was much lower than expected, and other
start-ups competed for customers. Global
Crossing couldn't bring in enough revenue to
repay its debt. A lack of stable leadership made
matters worse: The company changed CEOs five
times in four years.
Global Crossing's accounting methods came under
scrutiny early this year. After the bankruptcy
filing, the Securities and Exchange Commission
launched an investigation. Angry investors have
filed dozens of lawsuits against the firm.
Fixated on the Details
Before the money ran out, Winnick was known for
his free spending and his love of historic
architecture.
As chairman, he lavished perks on Global
Crossing executives and board members, including
Aston Martins and Rolls-Royces. Among his pet
projects was a meticulous $7.5-million
restoration of the ornate former MCA building in
Beverly Hills, where the company's executive
offices were based.
Former employees say that even the smallest
details of the renovation commanded Winnick's
attention. He personally inspected each brick
and ordered replacements for those that were
dirty, the wrong color or just not right. He
repeatedly rejected the shades of white paint
used in the hallway leading to the room he chose
as his office, a replica of the Oval Office.
"They went through painting the whole area five
times or so to get it just exactly the shade he
wanted to complement his art," said a former
Global Crossing manager.
Though it drove his subordinates to distraction,
Winnick's perfectionism earned him great respect
among preservationists, who are grateful to see
Casa Encantada in the entrepreneur's hands.
"We don't have any historical protections here,
so it's always a sigh of relief when someone
buys an important house and does the right
things to it," said Hyland, who also is an
architectural historian.
Although close friends say Winnick is a modest
man not prone to self-aggrandizement, he often
surrounds himself with politicians and notables.
Most of his charitable donations have put the
Winnick name on buildings, scholarships or other
projects.
His latest acquisition "is a definite trophy
property," said Joyce Rey, executive director of
Coldwell Banker Previews International in
Beverly Hills, the estates division of the
realty firm. "It takes a certain personality to
want it."
If you want other stories on this topic, search
the Archives at latimes.com/archives. For
information about reprinting this article, go to
www.lats.com/rights.
-------------------------------------------------
-------------------------------
Copyright 2002 Los Angeles Times
_____________________________________ |
