ASPEN, Colo. — Five days before former Enron Corp. Chairman Kenneth L. Lay took a verbal whipping from members of the Senate Commerce Committee, a 3,015-square-foot home he and his wife, Linda, bought in 1991 for $1.95 million sold for a soothing $10 million.
The Lays had planned to retire to the cozy retreat they called "the cottage." One of their grandchildren was baptized there, and they'd celebrated a son's wedding in the yard, which borders the Roaring Fork River, a scenic stream that meanders around the village of Aspen and through some of its most desirable residential areas. Now the Lay cottage, an architecturally undistinguished product of the 1950s, is someone else's tear-down: Brad Bell, executive producer and head writer of a CBS soap opera, could replace the house with something bold and beautiful.
"In Minneapolis or Cincinnati, people would make some improvements on a house like that. But here, someone paid $10 million for the dirt," said Bruce Carlson, an investor who has lived here for 32 years. "The buyer will probably scrape the house and build a pretty nice place for another $10 million."
The Lays, who are often described as unpretentious, collected some rarefied Rocky Mountain dirt. Before the collapse of Enron and the specter of stratospheric legal bills mandated some quick de-accessioning, the couple owned three houses and a lot here, in addition to property in Houston, where they are based, and Galveston, Texas. Besides the cottage on Shady Lane, they are also selling a 4,537-square-foot house for which they paid $4.825 million in November 1999 (list price: $6.125 million) and a slightly larger house across the street, for which they paid $6.145 million in August 2000 (list price: $6.150 million). A 3-acre lot in a subdivision of $5-million homes that face the ski runs of Ajax Mountain sold for more than $2 million on Feb. 12, the day Lay, 59, was in Washington exercising his 5th Amendment right against self-incrimination.
Midwestern merchant princes, Wall Street power lords, Texas oil barons, Hollywood knights and Bel-Air trust fund princesses have been coming to Aspen, a once-booming silver mining town nestled 8,000 feet above sea level, since the 1950s. As luxury playgrounds go, Aspen has it all: spectacular natural beauty, athletic diversions, sophisticated restaurants and a range of intellectual pursuits and cultural activities, crowned by a summer music festival. What other American ski burg has Chanel, Gucci, Prada, Fendi, Bulgari, Louis Vuitton, Dior and Baccarat boutiques? The Alpine Bank automated teller machine at the foot of Aspen Mountain's Silver Queen Gondola spits out crisp, new $100 bills so anyone getting $500 of pocket change won't be burdened by a messy wad of twenties.
Among its other charms, Aspen, which has only 6,000 year-round residents, has become known as a smart place to invest in real estate. "I've been selling property in Aspen for 25 years," said Carol Dopkin of Carol Dopkin Real Estate Inc. "People who have significant wealth are comfortable parking it here, because historically, they haven't lost their principal and in the last few years there's been dramatic appreciation. There have been modest downturns of 10 or 15%, but most of the time it just goes up. And that's particularly true in the high end of the market."
Here, that means prices that soar higher than big hair in Texas: The average home price is $3.6 million. In November, Priceline. com Inc. chief executive Richard S. Braddock paid $22 million for a house on Red Mountain, not far from where Leslie Wexner, billionaire founder of the Limited, just closed the deal on a $15-million lot. Wexner already had a mansion on the hill, but the additional property will ensure his privacy.
Such extravagance notwithstanding, even Aspen has its version of hard times. Shopkeepers complain that business is down, and realtors admit there are too few buyers for a swollen inventory of pricey homes. Anyone house shopping in the $5-million-to-$8-million neighborhood could choose from 45 alternatives to the Lay's homes.
Full-time residents such as Carlson, an oral surgeon who began buying property in Aspen in the early '70s and retired in his 40s, aren't worried. "You don't get disaster sales in Aspen," he said. Joshua Saslove of Joshua & Co., who represents all the Lay properties, reduced the prices of the pair of larger homes last week from $6.5 and $6.8 million, "to reflect current market conditions." Until those homes sell, the Lays will be on the hook for monthly mortgage payments of $36,429 and $28,217. The annual property taxes on the two homes are $9,967 and $7,672.