Living Large: 'Oversized Mansion Syndrome'

July 30, 2008— -- There are pockets of America that have, until now, seemed untouched by the real estate bubble's burst. Places, for example, set on 30 acres of rolling hills in posh Greenwich, Conn.

The dream of owning such a property is a reality for Stanley and Dorothea Cheslock, whose home boasts 26,000 square feet of some of the finest materials money can buy.

"That's a hammerhead beam structure, which is the same beam structure that's in Westminster Abbey," Stanley said on a recent tour of his home.

The vertical posts came from a barn that was built in 1760. And in their wine room, which can hold 3,700 bottles, the base of one table weighs 2,000 pounds. "We had a crane to bring it in and set it down," Dorothea said.

Not to mention the little extras: a movie theater with a marquee and concession stand, an indoor lap pool, a bass pond and the piece de resistance: a view to die for, courtesy of a French bird cage elevator.

So who wouldn't want to bask in all this luxury? The same family who owns it: The Cheslocks.

"You know, we're not really going to be around enough to take advantage of this place, so we should probably just sell," Stanley said.

The Cheslocks painstakingly built the Hillcrest estate from the ground up. They devoted four years and $21 million to building their dream mansion. But just over a year after moving in, it was time to call the movers again -- their dream was just too big.

"It's like a Cinderella house. To me, it's a castle," Dorothea said. "I never really needed the castle, and I think somebody else could enjoy it now. It's been fun, but I'm going to keep my prince, and I'm just going to go I think to a smaller home. But I'll take my prince with me."

Dreams (and Homes) Too Big?

Robert Frank, a Wall Street Journal columnist who writes about the ultra rich, says he has a name for the Cheslocks' change of heart. He's seen it too many times in America.

"I call it 'Oversized Mansion Syndrome,'" or OMS, Frank said.

"I've heard that recurrent theme," Stanley said. "Houses are too big, people are going to go back to smaller houses and then the next cycle in the real estate boom the houses get bigger. I just think that's part of the cycle."

So how did a couple like the Cheslocks, who came from humble beginnings, end up with Frank's so-called OMS?

Stan and Dorothea met 40 years ago at a Long Island junior high school. Their first house was modest, but as their Wall Street fortune grew, so did their extravagant lifestyle.

"I think it's a Cinderella story. I really think it is," said Dorothea.

"It's a real testament to the Unites States, I think," added Stanley.

And that American Dream led them to Hillcrest. It began as a modest project among the hedges and hedge funders of picturesque Greenwich. But it quickly grew.

"It grew," said Stanley. "As we kept planning, we kept adding to it, so it did get big."

"Stan would wake up and say, 'I have a new idea,'" Dorothea recalled, "and each new idea was either a bigger section, a higher ceiling, but it wasn't originally going to be anywhere near this size, in my mind."

The Hunt for Buyers

But as the project grew, Stanley Cheslock's fortune didn't. His merchant banking firm lost $100 million in the faltering economy and the couple became anxious. To be fair, they're still worth just under $100 million, but with the real estate market grinding to a halt they couldn't unload the house that costs $200,000 in upkeep every year.

"The conventional selling to a regular broker, we just didn't get any action on it," said Dorothea.

In 2006 they put their house on the market for $31 million. No takers.

So today, there's no "for sale" sign on the Cheslock's lawn. In an unusual real estate twist, they turned to marketing guru Jon Gollinger, shelling out $200,000 to his firm to market the house. Then he'll get a cut of the standard six percent realtors fee on the future sale of the home. All of this in hopes that he can work some mansion magic and make the house disappear.

Gollinger and the Cheslocks have now taken a cue from the foreclosure world, opening a five-week auction with bids starting at $19 million -- a measure usually reserved for properties seized by banks, not high-end real estate.

"What we do is we set a sealed bid price at a price point that is a below market price," said Gollinger.

Real-estate experts say Hillcrest is the most expensive house in U.S. history to be sold this way.

"This is, pretty much a watershed event, I think, for high-end homes," said Gollinger. "You're not going to be able to sell them utilizing typical ... broker-to-client standard kind of process. People are going to have to be more bold in their outreach."

'Everything's Negotiable'

And the envelope please ... on August 15th, the bidder with the highest offer will come home to Hillcrest. But what happens to the theater, the pool, the sculptures ... even the wine? Does it come with the house?

"All negotiable," said Stanley.

"Negotiable. Everything's negotiable," added his wife.

"I'm confident we will get bids," Stanley continued. "Whether we see bids at a number as high as we would like to see is questionable but it's gonna sell. We'll find out what market is."

So what's next for the couple who outlived their dream?

Believe it or not, the Cheslocks are at odds over size. Stanley's keen on a 7,000 square foot house. Dorothea, a former teacher, says she can live with just 3,500.

"We've enjoyed it," she said. "I think we're really, really lucky to come this far. Stan's done a phenomenal job with his business and I think good for us and good for my family. It's been great and I wouldn't change anything."

"Houses, cars, investments. That's fleeting," adds Stanley. "It's really the other things that are important ... friends and family."