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Article Courtesy of The Orlando
Sentinel
By Beth Kassab
Published
November 3, 2011
Four years ago, David Siegel was one of Central Florida's biggest names, with brisk time-share sales at his Westgate Resorts, a growing portfolio of properties and a 90,000-square-foot home under construction.
Today he is contending with lenders who have stepped in to call the shots on everything from how much he gets paid to whether he can sell time-share units at his new Las Vegas tower. He has slashed his workforce in half. And he is looking for a buyer for his unfinished Windermere home dubbed "Versailles."
"I'm going through a very difficult time right now," Siegel, 76, told me.
The man often called Orlando's time-share king is now coping with a decidedly scaled-back business empire and lifestyle. The time-share industry took a hit along with the residential housing market, logging sales last year that were 40 percent off the 2007 peak.
He says demand for time shares is still strong and blames his company's troubles on the credit freeze that has halted his stream of financing.
"We never stopped being profitable, but the banks that we are dealing with are in trouble, so |
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Aerial
view from May 2010 of the 90,000-sqf home time-share mogul David
Siegel was having built. He has since put the home up for sale for $75
million, but has had no takers.
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they're not funding us," he said. "We had to cut the company in half. The demand is incredible. We could do twice the business we're doing if we had financing."
That's a big "if" and one that so far has proven elusive as Siegel has fought to manage the fallout from the recession.
At the end of 2009, he opened PH Towers Westgate, which is connected to the Planet Hollywood resort in Las Vegas.
Now, however, the building is being used as a hotel because sales of time-share units there have been blocked by Siegel's bank on the project.
"The lenders won't fund our sales and we can't afford to sell there until we get funding," he said.
In the past, Westgate was able to borrow against the mortgages of time-share buyers, but that has dried up.
That is one reason new construction he had in the works has gone from $2 billion three years ago to zero today, he said.
His more than 12,000 employees have been whittled to 5,500. He said lenders have cut his salary in half.
He still owns the Gulfstream jet he once used to fly between Orlando and Vegas but says "we can't use it because the bankers don't want us to."
Today he flies commercial.
And he won't be moving into his planned palace with 13 bedrooms that was originally designed to include an ice rink, bowling lanes and a children's playroom with a stage for live performances.
"It was a magnificent home," he said. "Did we need it? No. Did we want it? Yes."
The unfinished house, which was put up for sale last year for $75 million, has generated some inquiries, but no takers.
"I'm very frugal," Siegel said. "That house kind of makes me look the other way … now that money is so tight I squeeze every penny."
So Siegel, his wife Jacqueline and their eight children will stay put in their 20,000-square-foot home in the exclusive Isleworth neighborhood.
He remains proud of his company's charitable giving through the Westgate Resorts Foundation, which has raised $10.8 million since 2001 and last month gave away 1,000 vacations to military personnel who served in Iraq and Afghanistan.
Lean times have meant he's cut back there, too, however. Tax forms for the charity show that Siegel contributed more than $300,000 in 2007 and 2008 and $60,000 in 2009, the most recent available.
He's hoping for a thaw in the credit markets or other streams of capital that can help his company grow again.
Through it all, laying off so many employees has been the most trying.
"Affecting all these families has been the worst thing I've gone through," he said. "I hope a lot of them I can hire back over the next few years."
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