Rancho Mirage: At 27% Off, Is Yellowstone Club Founders' Estate a Bargain?

Life just isn't what it once was for Tim and Edra Blixseth. The couple, now divorced, founded one of the most elite private ski clubs in the world, the Yellowstone Club near Big Sky, Mont.

Now the lavish home in the California desert where they once lived, Porcupine Creek in Rancho Mirage, is on the market for $55 million. That's 27 percent less than its original asking price of $75 million back in February.

The home is now in the hands of the former Mrs. Blixseth, but not for long. She filed for Chapter 11 protection last year and has debts of $500 million to $1 billion. The 30,000-square-foot estate (the main residence is a mere 18,430 square feet) has a 240-acre private golf course, clubhouse, a pool guarded by bronze lions, automated fountains, a 1,700-foot-long driveway, a beauty parlor, wet room, massage room, hand-painted ceiling murals, a prayer room, a commercial kitchen, and a children's wing (with bedrooms, a playroom and a nanny's room). There also are eight, two-bedroom guesthouses, a resort-style pool, a spa and a gym.

Porcupine Creek is being sold to satisfy the creditors of the Yellowstone Club and its holding company. Laugh if you want, but you can't say the Blixseths didn't have vision.

In the late 1980s and early 1990s, Tim Blixseth swapped the federal government 100,000 acres that he and two partners had bought in Montana for the primo real estate that is now the Yellowstone Club. Perhaps the world's sole, members-only ski resort, the Yellowstone Club is still exclusive, private, and boasts a Who's Who of members from Dan Quayle and the late Jack Kemp to Bill Gates, Starwood Hotels' founder Barry Sternlicht and News Corp. President Peter Chernin.

And talk about deals: Mountain-view lots that sold for $200,000 in the late 1990s were going for $1 million in 2005. Homes were built with private elevators, wine cellars, movie theaters -- no skimping. One wild spec home, called the River Runs Through It home, even featured an all-glass passageway to the guest quarters with a heated river flowing below it. When the financial world was rocking and rolling, the Yellowstone Club had $1,000-per-person New Year's Eve bashes in the clubhouse, complete with sommelier, concierge service and full access to the caviar bar.

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In 2005, Tim Blixseth took out a $375-million loan from Credit Suisse and pledged the assets of the Yellowstone Club as collateral. He used the Credit Suisse loan to buy up properties around the world, to fulfill his vision of taking the Yellowstone Club concept international -- creating mega luxurious timeshares or fractionals (a glammed-up Exclusive Resorts concept). Court documents claim that the Blixeths also pocketed about $209 million in cash.

In November 2008, the Yellowstone Club filed for Chapter 11 protection.

Like most rich people during the boom, the Blixseths spent extravagantly. Edra Blixseth hosted a $90,000 party at Porcupine Creek for about 100 guests, who were invited to whack pinatas shaped like Tim -- filled with gold-foil-wrapped chocolate coins. This was, of course, after the couple split.

When their divorce was final, Edra was awarded a 14th-century French chateau outside Paris, some land in St. Andrews, Scotland, the Yellowstone Club and all its debt, and Porcupine Creek.

Of course, there are countless lawsuits and accusations, including a suit against Credit Suisse alleging the bank tempted resort owners into taking profits out of their clubs with predatory lending practices. At one point, Mrs. Blixseth hoped to stay at Porcupine Creek, turn it into a revenue-generating golf resort. But the drop in the property's price by more than a quarter, plus her significant debt, makes that pretty unlikely to happen.

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