Global Crossing investors, ex-employees galled at CEO's lavish mansion restoration

LOS ANGELES — Even by the standards of Bel-Air, Gary Winnick's mansion 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. The founder of telecommunications giant Global Crossing is 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. Its stock soared on hope and hype after its 1997 start-up. 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, chairman and the largest individual shareholder, lost billions in paper wealth. But he had sold millions of shares two years earlier, when the stock was flying high. He cleared more than $575 million and used some of it to buy his $94 million mansion — the highest price ever recorded for a home in Los Angeles County.

The 8.4-acre spread now 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 companies 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.

Other tech leaders have been humbled by the collapse of their companies. In April, Bernard Ebbers, the deposed chief executive of long-distance giant WorldCom, 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's former chairman, Kenneth Lay, sold homes in Colorado and Texas to stave off personal bankruptcy. His wife, Linda, opened a thrift store in hopes of raising cash.

Winnick, by contrast, continues to pour money into his home renovation, 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 Bel-Air Country Club member 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."

The mansion, dubbed Casa Encantada, or House of Enchantment, was built to be talked about. Its design reflected the original owner's determination to impress.

A 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.

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.

"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 ... 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 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. The house took two years to build and cost an estimated $2 million — $23.7 million in today's dollars.

Poor investments and gambling cost Weber her fortune, and Hilton bought the house and its contents in 1950 for $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. In his 70s when he moved into the mansion, Hilton nonetheless hosted frequent parties, sometimes rolling up the carpet for dancing. The house served as a backdrop for several movies.

After Hilton's death in 1979, Dole Food 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.

Winnick, himself a major fund-raiser, visited many times. Murdock rebuffed several offers before succumbing, said Jeff Hyland, co-author of "The Estates of Beverly Hills" and president of Hilton & Hyland Real Estate.

"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.' "

Although 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, also an architectural historian.