In Greenwich, Conn., there sits an estate with an 1,800-foot driveway, 15,000 square feet of living space, 50 acres of waterfront land and aÂ $190 millionÂ price tag. When it hit the market in May, it was proclaimed theÂ most expensive homeÂ ever formally listed in the country, and an extraordinary monument to magnitude.
But that was just the half of it.
Copper Beech Farm, as the estate is called, also carries more than $120 million in debt, surely making it one of the most heavily mortgaged homes in American history as well. In recent years, it has been yoked, through its loans and through its owner, to a tale of the American West; of forestland, big plans, a scarcity of water and a devastating infestation of spruce budworm, which are, essentially, caterpillars.
Copper Beech Farm was built in 1898 and was owned for much of the 20th century by the Lauder Greenway family; George Lauder helped start a steel company in the late 19th century with his cousin,Â Andrew Carnegie. That company later became U.S. Steel.
In 1982, the estate was sold to the current owners, John M. Rudey, a timber magnate, and his wife, Laurie Rudey, for $7.55 million. They have not been in the local news much since, though in 2003Â an article from The Associated Pressreported that Mr. Rudey had been charged with providing alcohol to minors after two Harvard rugby players who had been attending a party at his house were caught running naked in a public park. One of Mr. Rudeyâs children was a member of the team. (Records do not reveal how the case turned out.)
The Rudeys have taken out mortgages on the property all along, through companies they owned â $15 million here, $26 million there â but in 2006, the dollar amounts exploded.
That year, a company owned principally by Mrs. Rudey took out a $59 million mortgage on a portion of the Copper Beech property with Bank of America, a loan that was personally guaranteed by Mr. and Mrs. Rudey. There was already an existing $41 million worth of mortgages with M&T Bank.
Also in 2006, a company called Inland Fiber Group, which owned forest land in Oregon, and of which Mr. Rudey was president and principal executive officer, went bankrupt.
The tale swings west in 1999, when a company Mr. Rudey controlled paidÂ $60 millionÂ for more than 50,000 acres in Kittitas County, Wash., an area that was once abuzz with timber production. But after a sharp decrease in logging on federal land about 25 years ago because of environmental concerns, like the designation of theÂ spotted owlÂ as an endangered species, the supply chain started to come apart.
âWhen the mills start shutting down, youâve got a real challenge, youâve got huge transportation costs,â saidÂ Peter Goldmark, the Washington State commissioner of public lands.
Nature has played a part as well, bringing forth an assault of spruce budworm (the caterpillars) and bark beetles on the area, along with warmer temperatures â all of which have roughed up the forest and made the trees less valuable as timber.
In the face of those challenges, many timber companies packed up and left. Those that didnât chose a well-trodden path.
âYou log it really hard, then the next scenario is to develop it really hard,â said Peter Goldman, director of theÂ Washington Forest Law Center. âAnd at the end of the day, youâre out.â
Kittitas County, east of Seattle, has become a major second-home destination in recent decades, and the Rudeys spent years exploring ways they might develop their land, local officials said, though no formal plans were ever filed. It appears that the challenges overwhelmed the possibilities.
There were endangered species to contend with, and local opposition. There were new and increasing water restrictions. And perhaps most important of all, there was the enormous cost of building a large number of new homes in the middle of a forest.
âIn an area like that, itâs not a small undertaking,â said Paul Jewell, a Kittitas County commissioner. Just getting clean water to residents and building safe roads in and out could have cost hundreds of millions of dollars, he estimated.
By the end of 2010, companies owned by the Rudey family had a $59 million mortgage on one portion of Copper Beech Farm and a $79 million mortgage on the forestland in Washington, both with Bank of America. Those loans were cross-collateralized and personally guaranteed by Mr. and Mrs. Rudey, meaning that if they fell behind in payments, the bank could force the sale of either property and, if they still came up short, the Rudeys would be personally liable. They also had $65 million worth of mortgages, again through a corporation, on another section of Copper Beech with M&T Bank, effectively bringing the total debt associated with the property to as much as $203 million.
In 2011, Bank of America started foreclosure proceedings on its portion of Copper Beech Farm. The Rudeys, meanwhile, had filed a suit against the bank, alleging âpredatory lending practices,â among other accusations. The following summer, those two lawsuits were dropped.
The Rudeys then struck a deal to sell the forest land to the Washington State Department of Natural Resources, for $97 million. In December, the Rudeysâ longtime apartment at 1030 Fifth Avenue was quietly sold for $16.5 million. And a few months after that, Copper Beech Farm, no longer cross-collateralized with the forestland, hit the market.
How much Mr. Rudey still owes the banks is not a matter of public record. But according to a person with knowledge of the arrangement, the Rudeys are trying to sell the properties in Washington and Connecticut as part of an agreement to pay back their lenders.
Mr. Rudeyâs real estate broker, David Ogilvy, denied this, however, saying that all of this was just estate planning on the scale of a very wealthy family. (Mr. Rudey is 70.)
At a certain age, Mr. Ogilvy said, âa banker looks at you and says, âYou know, you have to plan ahead.âÂ â
Mr. Rudey did not return several calls seeking comment, and attempts to reach him through his lawyers in Connecticut and Washington, as well as through Mr. Ogilvy, were unsuccessful.
While the mortgage amounts are high, Mr. Ogilvy said, they are a standard loan percentage; if one assumes the property is worth $190 million, the mortgages would be about 65 percent of the value.
But that assumption is far from a certainty. The most expensive property ever sold on the open market in Greenwich is believed to be an estate that went for $45 million in 2004, according to the appraisal firm Miller Samuel.
Nonetheless, Mr. Ogilvy said he had confidence in the asking price because Copper Beech Farm occupies 50 acres right on the water, and other waterfront properties in the area have sold for between $4.5 million and about $9 million per acre. By subdividing the land, he said, which is permissible under town zoning regulations, the numbers become enormous.
Regardless of whether Mr. Rudey gets what he is asking for in Greenwich, however, his position in Washington is all but assured. He will sell about 50,000 acres to the state as part of aÂ larger planÂ to protect the watershed and natural habitats, and he will keep about 900 acres. The deal is set to close in September. So, by the end of the year, that particular tie between east and west will be all but severed.