Time-share king restarts work on Florida Versailles as business booms
ORLANDO, Florida |
ORLANDO, Florida (Reuters) - David Siegel, owner of the largest privately held time-share company in the world, says he is rebounding from the recession so well that he is restarting construction on an extravagant Florida home modelled on the Palace of Versailles outside Paris.
His company, Westgate Resorts, this year is also hiring 1,500 new employees, closing on $450 million in mortgage-backed securities in the first such transactions since 2007, and fending off banks that he says "are throwing money at us now."
"We're the most profitable we've ever been," Siegel told Reuters, projecting nearly $500 million in gross sales this year and expecting to be debt-free within two and a half years.
That is not the epilogue viewers of the movie, "The Queen of Versailles," now screening in independent movie theatres around the country might expect.
The documentary film chronicles the outsized lives of Siegel and his flamboyant wife Jacqueline as they tapped the pre-recession gusher of money from Westgate time-share sales to build what would have been the largest privately owned home in America, a 90,000 square-foot (8,360-sq-metre) indulgence just outside of Orlando patterned after the French Palace of Versailles.
The film ends with Siegel halting construction on the shell of the mansion to marshal all available resources to protect his company.
Viewers watch the lights go out in 2011 on the Westgate name atop the 52-story Planet Hollywood Towers on the Las Vegas Strip, as Siegel, hamstrung by the credit crunch and banks' unwillingness to finance sales, loses his biggest project and millions of dollars he personally invested.
Presenting the documentary as an "allegory of the overreaching of America," director Lauren Greenfield won the directing award for U.S. documentaries at the 2012 Sundance Film Festival showcase for independent films.
Siegel, 77, contends the film inaccurately depicted his company as failing, and that sensational parts of the film, such as his 46-year-old wife, Jacqueline, taking their kids through a drive-through restaurant in a limousine, were staged. The family, he said, does not own a limo.
On the eve of the film's premiere at Sundance, Siegel filed a defamation lawsuit over the portrayal of his business which continues to wind its way through federal court.
Now that film is being seen by a wider audience, the Siegels have brought in a public relations crisis team, made themselves available for media interviews and opened their lives to more scrutiny, including their current 26,000-square-foot (2,415-sq-metre) home in the tony Isleworth gated community, best known as the scene of Tiger Woods' 2009 car crash just before his divorce.
"LEAN AND MEAN"
As a private company, Westgate's financial figures are not publicly available. However, for the past three years, Westgate has ranked within the top 50 private companies in Florida by revenue, as assessed by Florida Trend magazine.
"I'll be the first to admit in 2008, we were fat," said Siegel who said gross revenue topped $1 billion that year. "We had departments that were maybe out of control. I was making so much money I didn't care. I didn't know what to do with the money. That's why I was building this big home."
Then came the crash, and Siegel cut payroll at Westgate from 12,000 people to 5,000, drastically reducing overhead costs. He said the company also became choosier about the potential buyers it qualifies.
As a result, Siegel said, the sales force now closes deals with 25 percent of the potential buyers it engages, compared with a typical time-share closing rate of 10 percent to 15 percent, increasing net profit on the deals.
"We got lean and mean. We're basically doing what the whole country should be doing. We're living within our means. The company today is more profitable than it was back in its heyday of 2008 in terms of actual profit. We're more profitable today than we have been in our history," Siegel said of his 30-year-old firm.
His next big project, Siegel said, is coming up with a financing scheme to restart construction later this year of a Westgate resort in the Anaheim Garden Walk Mall adjacent to Disneyland, a project which also stalled after the credit bust.
Jacqueline Siegel, a former Mrs. Florida who now owns the pageant franchise, accomplished her own version of recessionary budgeting, paring housekeeping staff from 15 to one and enlisting the five nannies for the family's eight children, who are aged 5 to 18, to help with chores in their spare time.
While her husband worries over the depiction of his company in the film, Jacqueline liked the limelight, and said she has heard from the people behind the "Supernanny" reality show and other producers about possible future projects.
"I like the camera and doing projects. I don't know if it's my five minutes of fame, or it's going to develop into a mini-career," she said.
Meanwhile, the Siegels are in the process of getting building permits to restart construction on their Versailles.
Siegel said he took out enough money through a refinancing to finish the facade over the next year, as a gesture to the neighbors and to make the house more appealing to buyers.
But when the house is finally finished, some of the children will be heading off to college, making features like a full-sized roller rink, two-lane bowling alley and three swimming pools, less desirable.
The asking price? Only $100 million completed or $75 million as is. (Editing by David Adams and Eric Walsh)
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