From Glamour to Gloom
RED SQUARE AND GREENBACKS: Sergey Grishin, the billionaire Russian banker, is being sued in Santa Barbara Superior Court over the late Warren Austin’s historic Val Verde estate — yet another chapter in the property’s bumpy ride.
On the Beat
Grishin, who bought the 17-acre Montecito property out of bankruptcy last year for $15.3 million, is being sued by the bankruptcy trustees, who claim that Grishin reneged on an agreement to buy the estate’s furnishings for an additional $450,000. Trustees say they ended up auctioning the paintings, antiques, and other valuable items for only $200,000 last January.
Meanwhile, questions are being raised about financial dealings by the nonprofit Val Verde Foundation, which took over after Austin died in 1999, and which declared bankruptcy last year after falling $1.4 million behind in payments on its $13-million loan. The bankruptcy case remains open while trustees look into issues.
One question posed by critics is, where did the money go?
According to county records, Grishin recently sold Val Verde to neighbor Peter Muller, a Morgan Stanley money man, for $14.8 million. According to Steve Cushman, Santa Barbara Chamber of Commerce president, although the price was less than what he bought it for, Grishin retained part of the property adjacent to his own home.
Grishin, you’ll recall, donated $50,000 to Cushman’s losing mayoral bid last fall. Grishin and Muller could not be reached for comment.
Austin’s dream of the estate being opened to the public for tours was shattered in 2000 when neighbors vociferously objected and the Board of Supervisors, rightly or wrongly, refused to grant a permit. Austin led what many might call a charmed life. The fortunes of war brought the young physician not to the battlefields of World War II but to the Bahamas, where those notorious wastrels the Duke and Duchess of Windsor were waiting out the war.
Posted to an Army hospital, Austin soon became, in effect, the duke’s private physician and was a regular fourth at bridge at Government House, according to Errol Trzebinski’s biography The Lives of Beryl Markham (W.W. Norton & Co., 1993). “Warren was not easy to forget,” she wrote. “He was sensationally tall and good-looking; his voice was not unlike that of Cary Grant, with that same debonair quality.” At war’s end, when Austin announced plans to go into practice in Santa Barbara, the duke insisted that he get in contact with world-famous pilot and sleep-around free spirit Beryl Markham, Trzebinski wrote.
That he did, engaging in an affair with Markham, while living with her and her writer husband, Raoul Schumacher. Markham had shot to international fame with a pioneering solo westward transatlantic flight in 1936. She later claimed authorship of West with the Night (North Point Press, San Francisco, 1942). It’s an exquisitely written memoir but by most accounts ghostwritten by Schumacher. After catching Markham in flagrante delicto with a mutual friend, Schumacher blew town.
Austin clearly found her fascinating, if maddening, according to Trzebinski. Markham could not understand why Austin had to go off every day to make a living or pay debts involved with equipping his office. After all, she didn’t pay her debts; why should he? Meanwhile, Austin was overwhelmed with patients, thanks to recommendations from the Duchess of Windsor. But, then in her forties, Markham was insanely jealous of his attentions to other women. At a beach party one night, irked by his paying attention to someone else, she let the air out of Austin’s tires and smashed his windshield. After that tempestuous romance ended, a billionairess entered Austin’s life.
Florence “Bunny” Horton, whose father founded the Chicago Bridge & Iron Co., was said to be one of America’s richest women in the first half of the 20th century. She and Austin wed and, in 1955, bought Val Verde. Their parties attracted such celebrities as Katharine Hepburn, Gloria Swanson, and Vincent Price. Once, after Bunny died in 1991, I visited Austin and his mansion jammed with antiques, paintings, and silver statuary. After his death, however, all went to hell.
The Val Verde Foundation, with no tour income, filed for bankruptcy last year to avoid having the estate sold at auction. When I visited Sunday, I found Val Verde and its superb gardens designed by Bertram Goodhue and Lockwood de Forest enclosed behind a locked gate, its future uncertain.
SYLVIA: I wasn’t sure what to expect from a play about a married couple and a dog. But Sylvia, A.R. Gurney’s comedy now on the boards at Solvang Festival Theater for PCPA Theaterfest, is a clever, touching look at what happens when man’s best friend comes between him and his wife. Stephanie Philo is endearingly funny as the adopted pooch, Sylvia.
TIME OF MY LIFE: You’ll need to scan the diagram in your program carefully during the Santa Barbara City College Theatre Group’s production of Alan Ayckbourn’s play Time of My Life. Action in a Chinese Restaurant jumps back and forth through 27 months as a family sadly/comically shatters the fragile crockery of life. By stage time, it ends nearly three hours before it begins. A superb cast of top area actors makes this quirky domestic play work.
Barney Brantingham can be reached at barney@independent.com or 805-965-5205. He writes online columns throughout the week and a print column on Thursdays.
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Great column! One addition: Dr.A was married briefly to a Chicago meatpacker girl before Bunny. Bunny also had a prior marriage.
Dr. Austin's incredible generosity of his $20 million estate and other assets has apparently been totally lost by mismanagement by those in charge. I was doing an estate inventory when Sue Adams, Larry Crandell, and John Gherini all left the board. The loss in only 8 years is beyond belief, yet no one seems willing to investigate. At the bankruptcy auction I was told 3 sterling flatware sets I inventoried were found in the executive director's garage!
How can we imprison a lady for 2 years for embezzeling $2000 from the nun's housing fund and ignore this $20 million fiasco?
toto (anonymous profile)
July 15, 2010 at 2:45 p.m. (Suggest removal)
Yes thanks for this great article! And thanks to you too toto. Oh this is deliciously Moneycito. And no one will investigate! Is there a Sheriff's council board member involved? And who is this go-to gossiping mayoral candidate 50K recipient character Steve Cushman. "Vociferously" objecting Moneycito neighbors, or shouldn't that be NIMBY rather than neighbors. After all NIMBY is what we're usually called in the Santa Barbara lowlands and by those same old long time well respected influential noridc immigrants. I still often wonder who was heading the gay 'whisper' campaign that Welsh has mentioned? And what was that all about?
DonMcDermott (anonymous profile)
July 16, 2010 at 6:34 a.m. (Suggest removal)
Sad story of a local cultural treasure lost...
You forgot to mention that Charles Lindbergh stayed at the house for awhile to avoid the press after his sensational kidnapping tragedy. I worked there for a bit after Austin died, I remember all the fantastic art covering the walls, original Dali, Chagall lithos, the upstairs bathroom even had a greek mural painted on the walls...
ironbelly (anonymous profile)
July 16, 2010 at 10:10 a.m. (Suggest removal)
---After catching Markham in flagrante delicto with a mutual friend, Schumacher blew town.--
Too funny... He never "blew town", he stayed here and married my grandmother.
cartoonz (anonymous profile)
July 16, 2010 at 2:19 p.m. (Suggest removal)
Very sad about Val Verde, gross mismanagement. Was there ever an explanation for where all the money went?
mtndriver (anonymous profile)
July 16, 2010 at 3:19 p.m. (Suggest removal)
I have appealed to our county supervisor, the grand jury, 3 newspapers and elsewhere and all I got was an article smearing Austin and Wright Ludington as the gay elite! We are living with journalism worthy of the 3rd world- except Barney. Maybe he can dig for the scandalous facts!
toto (anonymous profile)
July 17, 2010 at 12:32 p.m. (Suggest removal)
A minor correction regarding the person to whom Warren Austin was married before he married Bunny Heath Horton Austin. His brief first marriage was to Peggy Pillsbury, whose social stratum was different than that of a 'Chicago meatpacker girl.'
ValVerdeLost (anonymous profile)
July 18, 2010 at 9:49 a.m. (Suggest removal)
Hi! I was actually there when Mr. Grishen bought Val Verde at the auction. 4 weeks before the auction; the pumps failed.....the landscaping water and the pond water with the koi were shut off. Three weeks (at least) before he owned it; he paid to have the pumps replaced.....and he did save ; if not only the trees......(which were severely stressed) the koi and the aquatic animals which depend on the water features.
The landscape and the fish......were saved! The trees were on their last legs......and they are rebounding! Thanks to Sergey Grishin! I was there.....and I saw it!
In my opinion; there should be a criminal investigation into the board of Val Verde. This was operated as a "non-profit"! HA!!! It was a complete mockery of a "non-profit"!!
They borrowed millions of dollars. (14?)
They spent none of it on the property or the buildings. They were lining their own pockets. It is ludicrous.
Who is in charge of non-profits in the state?
Barney. Thanks for bringing this up! We should be demanding that an investigation start!
Thankfully; the "poolhouse" and the "main house" of Val Verde are reunited under a person who can afford to maintain them.....and wants to maintain them.
Sergey was an interim owner who wanted to "save" Val Verde from ruin. And we are very lucky he did. The landscape and the wildlife.....and the property were neglected sorrowfully by the bogus "Board".
All they did was pay themselves.....and rape and pillage the estate any way they could. And every dollar they collected (including mine) they used for themselves. The house was a sad disaster..completely neglected. They were setting up some ridiculous computer-generated tour ! Paying their friends to fool around with something which made no sense whatsoever. No one was overseeing any of this. The house was going to rack and ruin.
Their expenses were completely bogus. 14 million dollars........gone. Not spent on the house.....or grounds. Gardeners (three generations) not paid.....Tragic!
There should be an investigation!
Barney!! You go!!! Hooray for you!!
There must be a government body who is responsible for non-profits! This is the most egregious I could imagine!
Those of us who care about this treasure of a house and a landscape must thank Sergey Grishin for his role in saving it. No one else stepped up to the plate to buy it! No one else stepped up to pay for the new pumps to save the landscape and the fish and animals.
It is ridiculous that he is being sued.
I am grateful that he did what he did. Far better than anyone who was on that Board of a "Non Profit"!!
Penelope Bianchi
penelopebianchi (anonymous profile)
July 19, 2010 at 12:07 a.m. (Suggest removal)
The estate wasn't bought at auction. Grishin's offer for the estate was accepted by the Bankruptcy trustees in/around August of 2009 to pay off the holder(s) of the $13 million loan note---a note that never should have been collateralized by the estate, counter to the expressed wishes of the Austin. Auctions were later held in Jan and Feb of 2010 to sell WR and HH Austin Foundation personal property that Grishin had agreed to buy in addition to the house and real property. Yes, Grishin did apparently pay to repair the Val Verde landscaping water supply-obviously, he wanted to protect his investment. This doesn't mean he's a hero, rather he was acting like a sensible investor.
Definately agree that the Board members responsible for the fiasco need to be accountable for it. Agencies that can/do provide oversight to 501c(3) organizations include the local DA, State Attorney General, the IRS and the Department of Justice.
ValVerdeLost (anonymous profile)
July 19, 2010 at 7:07 p.m. (Suggest removal)
I contend that he is a hero!
Excuse me! Keeping the fish alive was not "acting like a sensible investor".
I know him; he cared about the fish and the animals. He cares about the trees! I walked the property with him. He didn't know if he would end up getting it. He paid for replacing the pumps. The koi would have been cooked within hours. I was there.
No! That is a very cynical approach. No "just an investor" cares not about fish. Seriously. HUH? Who cares about the fish? That is going to affect the value of 17 acres? Ridiculous! He CARED!!!
He has a heart. And he cared about Val Verde. He did not buy it to sell it. He bought it to save it. I was there with him. He ended up selling it to the person who owned the "pool house". Lovely that those two buildings are reunited. How sad that someone who calls himself "ValVerdeLost" would not hail him as a person who did, in fact make sure "Val Verde" was NOT LOST!!!
It was a falling-down wreck. Seriously neglected for many years. The gardeners who had lived there for two generations had stayed for months after they were no longer paid. Because they cared for the plants and the animals. My own gardener is cousins of those families.
He is a hero to me! Is "ValVerdeLost" going to contact the government bodies who can investigate? I hope so! I would like to help!
I assume this person cares?
I do!
I donated money I am sure was misused!
I would like to help if I can!
Penelope Bianchi
penelopebianchi (anonymous profile)
July 23, 2010 at 11:09 p.m. (Suggest removal)
penelopebianchi
Believe it or not, there are details about the bankruptcy processes and the sale of Val Verde that you apparently don't know. As much as you would characterize Grishin's behavior as great heroicism, the the "save the fish" move was mostly a "preserve the investment" move. I "was there" too.
Do direct your valid concern to encouraging oversight entities to investigate the management of the Austin Val Verde Foundation, instead on carrying on about the briefly imperiled fish and the billionaire banker who "flipped" Val Verde.
ValVerdeLost (anonymous profile)
July 25, 2010 at 10 a.m. (Suggest removal)
Looks like what seemed to be serious interest in this horrendous criminal boondoggle has again been put on the back burner. I hope it explodes and envelopes all those responsible and our lazy press in a conflagration worthy of the $20 million we all lost!!
toto (anonymous profile)
July 26, 2010 at 6:14 p.m. (Suggest removal)