The $100M house that Blixseth built
The $100M house that Blixseth built

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BIG SKY - This is the house that Tim Blixseth built, and it starts with 120,000 square feet - almost three acres - of boards and timbers and stone called the Warren Miller Lodge at the Yellowstone Club.

"That's your basic $100 million lodge," Blixseth said.

The lodge contains ski shops and restaurants, lobbies and bars and lots of big, gas-fired fireplaces. Fine art adorns the walls, bronze statuary stands guard everywhere. The wine list will blow your hair back, or at least the prices will. Almost everywhere you look, an employee is cleaning something. The furniture is heavy. The spaces are expansive. Ceilings rise and rise and rise. The heat bill must be incredible.

Upstairs, you find condominiums, some serviced by private elevators. The biggest condo measures 5,900 square feet and each one of those square feet recently sold for about $1,100. That works out to roughly $6.5 million.

And the lodge is just the gateway to this very private and expensive club, where nobody enters until the security guard gets the OK.

On one flank lies a golf course, on other flanks rise mountains where 15 ski lifts carry a thin stream of passengers from mansion doorways to mountaintop.

At mid-mountain, there's a restaurant where buffet items include seared yellowfin tuna and chicken wrapped in grape leaves. Servers are attentive. The napkins are linen. There's no cash in sight. Since it's a private club, everybody just signs the bill and pays later.

Another thing you won't find is a lift line. And come summer, there's always a tee time, for those who can afford the multimillion dollar cost of membership.

Surrounding the mountains are 14,300 acres of club property, most of it under a conservation easement. Members can ride horses or hike or bicycle, if they crave a little privacy.

Alongside the ski slopes, sky cranes loom, building more mansions.

Business is brisk. Last year, the club sold $95 million worth of real estate, according to club executives, bringing the total above $1 billion over the past 10 years.

And prices keep rising.

The first lots sold for about $200,000 in the late 1990s, Blixseth said. Now, some property here sells for $1 million an acre and up.

At those prices, buyers aren't hauling in any double-wides. They're building what one area artist called "the halls of the mountain kings. Every time I go there, I expect to hear Grieg."

It takes nearly 600 people to run this place during peak season, and that doesn't include construction workers. The traffic from carpenters, masons, electricians and other laboring people accounts for 20,000 to 30,000 vehicle entries a month, according to Charlie Callander, vice-president of sales.

All that construction has been in the forefront of Gallatin County's economic boom over the past decade, according to Leon Royer, president of American Bank and a close observer of the local economy.

"I think the whole expansion of the economy you could lay at the foot of The Yellowstone Club," Royer said. "They've done more to bring prosperity than any other entity. It's created, I honestly believe, thousands of jobs."

And now the club's future is unknown. Blixseth tried for months to sell the place, but a proposed deal with CrossHarbor Capital, a Boston-based private equity firm, fell apart late in March. Sam Byrne, a principal in that company, also is a Yellowstone Club member who is building a set of luxury condominiums here.

And now Blixseth and his estranged wife, Edra, are clawing for control of the club. She maintains it's on the verge of bankruptcy and she has asked a judge to toss Tim Blixseth out and name her as the boss.

Tim Blixseth maintains that is nonsense. He says the club is current on its bills, and fell behind on legal settlements and contractor payments only because the CrossHarbor deal fell apart.

"She's pretty good at interior design but has no concept of finances," he said of Edra Blixseth.

Judge Loren Tucker, in sleepy Virginia City, will eventually decide whom to believe.

MISTER HUSTLE

Blixseth, now 57, has a long history in real estate deals, some of them controversial. He said he made his first million by the time he was 25 years old, buying and selling timber and land in his native Oregon. He grew up poor, the youngest of five children who were forced to attend what he now calls a religious cult focused on apocalypse.

"It was definitely a mini-cult," he said. "Not nearly as big or sophisticated as some."

His first job in the timber industry had him bundling cedar shingles as a teenager. His first dream was to be a singer-songwriter and he once produced an album of his songs that he called "Timothy," because some people have a hard time pronouncing his last name. He still writes songs, records and promotes them.

As a young man in Oregon, he often worked with other people's money, buying and selling, usually moving fast. It worked for a while. Then, in 1986, when the timber market collapsed, he found himself in bankruptcy court, unable to pay a reported $16 million in debt.

But within a couple years he was back on his feet, a partner in a new company called Crown Pacific Ltd., which borrowed $300 million and bought nearly a half-million acres of timberland in Washington and Oregon. Blixseth was back in the fast lane, zipping around in a private jet. When his partner bought him out in 1990, for a figure Blixseth described as "eight figures" - which means at least $10 million - he tried taking it easy for a while.

"I tried that retirement crap once in 1990," he said.

It didn't work.

Within a couple years, he and some partners bought 140,000 acres in the Gallatin National Forest. That's also when Montana real estate prices started climbing, and Blixseth was on the path to some serious money through his creation of the Yellowstone Club.

There were a lot of big-gulp moments along the way.

"Like about every day," he said. "In the early days, everybody thought I was crazy."

Today, the club is an established presence and 340 millionaire families have become members, which means they bought club real estate and pay $16,000 in annual dues, roughly annual take-home pay for somebody with a $10-an-hour job. The number of front doors in the club, whether homes, condos or duplexes, will be limited to 864.

Only 100 homes have been completed and 80 more are under construction, Callander said. While awaiting construction of their own homes, members can rent slope-side cabins or the existing homes of other members. Assuming the Blixseths can settle their legal differences, or find another buyer, hundreds more homes could be built here.

"Love him or hate him, he pulled it off," Gallatin County Commissioner Bill Murdock said of Blixseth. "I leave it to others to say if it's good or bad."

The personal future of the Blixseths remains unknown. But their legal bickering affects hundreds of employees and contractors, plus the 340 families who have bought into the club. Whatever happens in court, however, it seems unlikely the club will go away, with so many millionaires already so heavily invested.

A number of members, or a group of them, could easily buy the club if they so decide, said one member, speaking on condition of anonymity.

CRITICAL MASS

Blixseth said the club reached a "critical mass" when 100 people embraced the concept and bought property here.

"It was pretty obvious we were getting past the tipping point," he said. "Those 100 people all tell four friends how much they like it in Montana. Then one of those friends buys."

It didn't hurt to have club members like Microsoft founder Bill Gates, former vice presidential candidate Jack Kemp, and pro golfer Anika Sorenstam on board to help build the club's image.

The land sales made it possible to finance the infrastructure: 15 ski lifts, 31 miles of paved roads, a private fire department (with $1.2 million worth of trucks and 21 fulltime firefighters), the golf course and that great big lodge, where diners can dig into chilled caviar, then take a seat, if they choose, on antique furniture covered with real zebra or leopard skins. If they want a full meal, a Persian carpet 100-feet-long pads the hallway to the dining room.

"It's been an interesting ride so far," said Warren Miller, the ski movie pioneer for whom the lodge is named.

Now in his 80s, he still skis every day.

"The snow's still white, it still sticks to a hill. The lifts still run," he said. "What else do you need?"

BAD NEWS

One thing the club, and the Big Sky area, needed in recent years was publicity. And the club attracted it by the trainload, much of it cultivated by Tim Blixseth. Most of it was good. Golf, skiing, architecture and lifestyle magazines profiled the club, mostly in terms ranging from favorable to glowing.

"There were a couple hundred pretty good articles and a couple of bad ones," Blixseth said.

The bad ones have arrived recently, and have focused on the increasing bitterness of his divorce and the recently settled, then reopened, lawsuit filed by bicycle racing champion Greg LeMond and other, early, club investors. They claimed Blixseth tried to buy out their interest at a lowball rate, then kicked them out when they complained.

Judge Tucker reinstated them as members and Blixseth has agreed to buy their shares for $38 million. But the last payment of $20 million is overdue, and now LeMond and the others want interest and legal fees, which will be considerable, because legal documents in the case fill 4 feet of a courthouse shelf.

Blixseth doesn't like talking about the LeMond case. But he also noted that the recent negative publicity helped him decide not to proceed with Yellowstone Club World, meant to be a chain of luxurious castles, haciendas, yachts and golf courses he's been purchasing around the world, in part with money he borrowed, using the Yellowstone Club as collateral.

His plans called for selling world-club memberships for $3 million. The New York Times Magazine called it "Club Med for the Multimillionaire Set."

Now it's off the table, at least for a while.

"We put selling those memberships on hold," he said.

World Club assets include a French castle, resorts in Mexico and the Caribbean, and some land in Saint Andrews, Scotland, where plans called for a private golf course.

Edra Blixseth said last week that selling one of those properties would cover all of the club's debt, but Tim Blixseth refuses to sell.

The squabbling continues.

GOOD NEWS

As the Yellowstone Club drew reams of publicity over the years, the impact of all that ink spilled in lots of places.

Tom Simkins, along with his family, owns Simkins-Hallin Lumber in Bozeman. The family also owns a big chunk of land near Big Sky's Meadow Village. The road to the Yellowstone Club passes right through it.

For years, Simkins said, the family had contemplated building a "downtown" on the land, a combination of residences and pedestrian-accessible retail space. For a long time, visitors had complained about a paucity of concentrated shopping in the sprawling resort area.

Once the Yellowstone Club took off, the Simkins family decided to go ahead with the Big Sky Town Center, which will be providing construction jobs for another decade or so.

"Big Sky was kind of not doing much," Simkins said. "The Yellowstone Club was the first to really catch hold and that started the turnaround. It brought a lot of notoriety and put Big Sky on the map."

Simkins said he was dubious of Blixseth's plans at first.

"When he started, a lot of people thought he was crazy: a private ski and golf community?" Simkins said. "But he made it happen. And this is what allowed our family's plan to take hold. It raised the consciousness about the whole Big Sky area."

Blixseth, along with Pittsburgh financier Jim Dolan, also started the Spanish Peaks development, a high-end but somewhat less exclusive resort on neighboring property: At Spanish Peaks, the security guard at the gate just waves to visitors. Blixseth has since sold his interests to Dolan.

Those two developments, Blixseth said, contribute at least $500 million a year, maybe considerably more, to the local economy on purchases, club employees' wages and construction.

The Montana Department of Commerce last year estimated construction in the entire Big Sky area creates 7,431 jobs.

"Every business in Bozeman has benefited," Simkins said. "Grocery stores, restaurants, lumber yards."

Simkins and Royer agreed there's been a marked slowdown in construction in the region in recent months. There have been layoffs, and home sales have dwindled. But they both said they remain optimistic about the region's long-term future.

"I'm very bullish about the prospects of the Big Sky, Bozeman, Livingston area," Simkins said.

And for the ultra wealthy, the kind of people who can afford a mansion at the Yellowstone Club, the wavering of the economy won't make much difference, Royer said.

"The high end is going to continue where it is, which is above the fray," he said.

BLIXSETH'S FUTURE

Blixseth said he has no plans to retire. Before the proposed sale fell apart, he said he had plans for at least two more Yellowstone Club-type developments, near major cities in the West. He wouldn't name them, but said they would offer private memberships for golf, horseback riding and other recreation, with houses in the $1 million range instead of the $10 million range.

It would be a much bigger market.

Now, he said he plans to fight Edra's takeover move in court and manage the club long term. He's shifting his sales model, from one focused on "bare dirt" to one emphasizing "vertical product," condominiums that sell more quickly. As of last week, he was working on one such project with Sam Byrne, the CrossHarbor principal who backed out of the overall purchase.

Some of the properties he acquired for the Yellowstone Club World could be converted to stand-alone clubs, Blixseth said.

He likes challenges, he said, doing things nobody's done before. But another Yellowstone Club isn't likely to happen.

For now, he's living in Medina, Wash., in his lakeshore house.

"Water's kind of peaceful for me," he said.

Plus, the water's deep. He can park his yacht there.

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