Redstone Castle hitting auction block

Redstone Castle hitting auction block.

Redstone Castle will be auctioned on Oct. 7.

IRS auctioned Redstone Castle in 2008, following investment scam.

Redstone Castle

The Redstone Castle will be auctioned on Oct. 7.

The historic Redstone Castle is about to hit the auction block — again.

The 23,000-square-foot mansion, 26.6 miles from Glenwood Springs, will be auctioned for the highest amount above a reserve price of $2 million on Oct. 7.

It will be auctioned by Platinum Luxury Auction. Some auction houses frown on setting reserve prices, preferring to let the market determine the price.

Last year, the mansion, which is surrounded by about 150 acres in the Roaring Fork Valley, was listed for $7.5 million.

The 42-room castle offers several revenue generating conversion opportunities.

With 24 bedrooms and 19 bathrooms, the residence can be transformed into a bed and breakfast.

Additionally, the castle’s English-style Great Hall, Russian-inspired dining room and picturesque mountain views offers brides and grooms a fairy-tale wedding experience.

The property includes several outbuildings. One is a 12-stall carriage house, gatehouse and gazebo with views of White River National Forest.

This is not the first auction rodeo for the Redstone Castle, also known as Cleveholm Manor.

Redstone Castle

Another view of the Redstone Castle.

In 2005, the Redstone Mansion, listed on the National Register of Historic Places since 1971, was auctioned by the Internal Revenue Service.

The IRS auctioned it to return funds to about 1,000 victims of an investment scam to recover some of their $56 million.

In 2008, Denver-based Norman Schmidt, then 72 years old, was sentenced to 330 years in prison for masterminding the scheme.

Schmidt and others promised investors returns ranging from 2 percent to 400 percent per month.

Instead, they took the money from investors to buy the Redstone Castle and eight NASCAR race cars, among other illiquid investment.

The scam ran from 1999 to 2003.

After the IRS acquired the castle, it conducted an economic development study that determined Redstone needed to keep the castle open or it “would totally devastate,” the local economy.

“The castle is really the heart and soul of the Redstone community,” John Harrison, a special agent with the IRS Criminal Investigation said in 2008.

Redstone Castle

The Redstone Castle, to be auctioned Oct. 7, sits on a 150-acre site.

John Cleveland Osgood, a coal baron and one of the nation’s richest men in 1900, built the castle. Construction began in 1897 and it took five years to complete, opening in 1902. Some believe that Osgood still haunts the Redstone Castle.

The Tudor-style castle features turn-of-the-century furnishings, original wooden paneling and European artwork collected by the Osgood family.

The castle is owned by Ralli Dimitrius, a part-time Aspen resident California businessman, through Redstone Castle LLC, based in Pasadena, California.

The LLC  bought the castle in the IRS auction for $4 million.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

 

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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