Living Large: The Troubled History of Arizona's Largest House (Part 2 of 3)

In my research into Phoenix history, I have become fascinated by the largest private home in the State. This three-part series is a deep dive into the troubled story of Arizona's Largest House, known as the McCune Mansion or Hormel Mansion.

Part one is about Walker McCune, who began building the palatial house in 1960 and owned it until his death in 1971, though he never lived in the main residence. Part two covers Gordon Hall, the flashy businessman who owned the house from 1983 until 1992, just five years before he was arrested by the FBI. Part three is about George Albert "Geordie" Hormel, an accomplished composer and musician and heir to a family fortune who owned the home from 1992 through the end of his life in 2006.

Each of the house’s three owners was substantially wealthier than an average person, and yet each of their lives was a roller coaster of misfortune and tragedy.

Paradise Mountain Estates

In Part one of this three-part series, we looked at the life of Walker McCune, the man who built Arizona’s largest private home. Following his death, the home eventually passed to Paradise Mountain Estates, Inc. by 1983.

According to a 1983 newspaper article, the 36-acre parcel of land surrounding the house was divided into 28 lots and offered for sale as luxury home sites. The house was listed for an asking price of $6 million.

The house is described in the article as 31,582 square feet on three stories. Amenities include Ice rink, 10-car garage, elevator, servants’ quarters, a poolroom and a children’s suite. All it needed now was a buyer.

Greed is Good

The 1980s were a decade of change in corporate America. It was the era of the “Corporate raider” – when investors such as Carl Icahn and T. Boone Pickens orchestrated hostile takeovers of large companies, reaping massive profits for themselves. Michael Milken made a fortune as the “Junk Bond King” before his conviction of insider trading.

During this time, Wall Street was rallying and fortunes were being made with every merger, acquisition, or takeover. This character of the 1980s high-risk, high-reward investor was portrayed by actor Michael Douglas in his role as Gordon Gekko in the 1987 movie “Wall Street.” A famous scene in the film has Douglas’ character explaining that “Greed is good” which became a mantra for a certain type of person during this time.

The story of the morally corrupt, greedy 1980s corporate raider has also been told by actor Leonardo DiCaprio playing Jordan Belfort in the 2013 movie “The Wolf of Wall Street” which is based on accounts of corruption on Wall Street during the 1980s.

But these were not characters created to tell entertaining stories, they were based on real people. People like Gordon Hall.

Poster for the 1987 movie "Wall Street" which exemplifies the high-risk, high-reward persona of 1980s stockbrokers and investors.

Gordon L. Hall

Facts about Gordon Hall’s life have been culled from a March 30, 1986 article in the Arizona Republic and a December 18, 1997 article in the New York Times. Here’s what we know:

Gordon Leroy Hall was born in San Diego, California around 1953 to parents Thomas and Delores Hall. Gordon has five brothers and sisters, and graduated from Mount Carmel High School in 1971. After high school, he says he worked as a commercial fisherman before joining the U.S. Army. Hall was stationed at Fort Carson, Colorado where he worked as a mail clerk. He served for three years, three months and three days.

After the Army, Hall was working as a night clerk at a liquor store. In 1975, he married a woman named Lugene and they had a daughter together, Alicia Ann Hall. The marriage didn’t last and in 1977, the couple divorced with Lugene saying her ex-husband was physically abusive and Hall denying it.

The Self-Made Millionaire

In 1976, Gordon Hall was working at a health spa in Colorado Springs and worked his way up to manager. When the club went up for sale, he bought it with his business partner Will Milenz by mortgaging his small house and taking out a $25,000 loan.

Within a year, he split ways with Milenz and had sold the club. He founded a health club chain “24 Hour Nautilus” in Los Angeles. A brochure published by the Gordon Hall Corp. says that he became a “self-made millionaire by the age of 24.”

In 1979, Hall relocated to Mesa, Arizona. He opened a chain of health clubs that had inexpensive memberships and 24 hour operations. At its peak, the chain had grown to 17 locations in California, Arizona, and Texas.

In 1980, Hall married his second wife Stacy and they went on to have three children together. It was during this time that Hall became a member of the Church of Jesus Christ of Latter-Day Saints.

In 1984, Hall sold his chain of health clubs to focus on other business ventures. Not long after, the chain filed for Chapter 11 bankruptcy, but that was no longer Gordon’s problem. It seemed like things were going well for Hall at this time, but things were about to switch gears in a big way.

 

Shoot for the Moon

After selling off his chain of health clubs, Gordon wanted to try his luck as a real estate developer. Friends and associates said that he had expressed his ambitions to be rich and successful. He told People Magazine in an interview that he planned to be a billionaire by age 40. Hall loved the attention he got from the press and sought to get as much of it as he could.

In the mid-1980's, Mr. Hall promoted two major projects that never got built. The first was a proposed 60-story office tower to be located at Central Avenue and Thomas Road in Phoenix, which was humbly named Gordon Hall Towers. This project stalled when his application for a loan to buy property at the site was denied by Incor Inc., a loan-brokerage firm.

The second project was a 1,200-room hotel proposed for downtown Phoenix at an estimated cost of $104 million. It too was thwarted when the $18.6 million incentive package he was seeking was rejected by city of Phoenix officials.

Hall spent a significant amount of effort trying to convince the leadership of West Jordan, Utah to relocate city hall into a proposed 2-million square foot office and shopping complex called Fox Crossing, which never materialized. He was turned down for a $27 million dollar loan for the project, and the site’s owners say he failed to make a $350,000 balloon payment on the property and filed suit against him.

Hall did manage to get three small shopping centers built, including the Paseo de Oro shopping center at Alma School and Elliot road in Chandler. However, his grand ambitions for major developments never came to fruition.

Gordon Hall Mansion

Hall made a big splash when he purchased the Walker McCune mansion in Paradise Valley, Arizona on July 4, 1983. Hall paid slightly less than $2 million for the home, though he told reporters he paid $5 million. A fact check of public records indicated $2 million was the correct figure.

People Magazine ran a profile about Gordon Hall in January 1986, focusing on the home and its lavish amenities. It describes the home as having 16 bedrooms, 25 bathrooms, 6 dining rooms, 14 fireplaces, an outdoor swimming pool with waterfall, an ice-skating rink, a 14-car garage, 6 kitchens, a portico with 7,250 light bulbs, and a hair salon.

According to a newspaper article, Hall spent more than $2 million renovating the property. He hired Audrey Lynne Rounding, a Scottsdale architect and decorator, to remodel and expand the house from 33,000 square feet to 55,000. As one would expect, the renovations were as outlandish as Hall’s personality. He had the words “GORDON HALL MANSION” painted on the roof in 44-foot wide black letters, so that people would know who lives there.

A 14-person Jacuzzi tub was installed in the master bath. The exercise room within the home had custom doors made featuring life-size portraits of Arnold Schwarzenegger and body building champ Lisa Lyon. The price for the art was $150,000.

The "Gordon Hall Mansion" in 1985.

 

Additionally, Hall bragged of having two Bosendorfer pianos from Vienna, 133 telephones on 12 lines, and a 250-kilowatt generator on site. The home boasts 49 security cameras and infrared detectors feeding a console of 29 television monitors to sense every motion in the house. Hall also had a considerable cache of weapons, which he called "just toys." 

Shortly after, Hall taped a segment for the television program Lifestyles of the Rich and Famous, which ran from 1984-85 and later in syndication. I was not able to confirm if the segment actually aired.

Real Estate Crash and Downsizing

The one thing that Gordon Hall did not see coming was the real estate crash of the late 1980s. The stock market crashed on Monday, October 19, 1987. By day’s end, the DOW had fallen 22.6% in an event now referred to as “Black Monday.”

The ripple effect that this had on the commercial real estate industry was devastating. Gordon Hall was nearly broke. Prices on real estate continued to slide for the next four years as a result.

The headline reads "Quick sale sought for palace" on this October 28, 1989 newspaper article in the Arizona Republic.

Hall put the house on the market in 1986 for $9.85 million. In December 1986, he held a private auction and received a bid of $3.4 million. The offer was rejected.

Gordon Hall sold the mansion to the Southwest Savings and Loan Association in 1989. Though he had received a foreclosure notice, the proceedings were never finalized as he sold the house to Southwest. He had lived in the home with his family for approximately four years.

Once a Crook, Always a Crook

After exiting the health club business and failing to secure funding for any of his wildly speculative development projects, Hall was in need of a new venture. Over the next three decades, he would be involved in a number of fraudulent business schemes involving used cars, stock manipulation with organized crime families, bogus silver investments, and a Ponzi scheme in South Carolina. As the old saying goes: “once a crook, always a crook.”

Used Car Stock Scheme

From 1992-1994, Hall put his remaining funds into Eagle Holdings, a publicly-traded used car company. Federal regulators accused Hall of manipulating the stock price in a pump-and-dump scheme that netted him $2 million in profit.

HealthTech Stock Scheme

Hall went back to fitness clubs in the 1990s as the CEO of HealthTech, which too was publicly traded.
In 1997, Hall was indicted on criminal racketeering charges. He was arrested by FBI agents when he arrived at work, two days before Thanksgiving. He was accused of working with the members of the Genovese and Bonanno crime families to manipulate his company's stock price. On Dec 10, 1997, Nasdaq delisted the Healthtech stock.

 

Article about Hall's indictment from Nov. 29, 1997

Dec 18, 1997 – Gordon Hall appeared in Federal District Court in Manhattan, pleaded not guilty to 25 counts of fraud and racketeering charges in a stock manipulation scheme that involved members of the Genovese and Bonnano crime families and half a dozen brokers.

A Manhattan jury convicted him in 1999 after four mobsters pleaded guilty in the case. Hall was sentenced to 87 months in prison and three years of probation.

Atlantic Bullion & Coin Scheme

Hall's probation in the securities case was scheduled to end in 2010. Less than two years later, authorities said he and his 22-year-old son, Benton Hall, became embroiled in a Ponzi scheme involving bogus silver investments.

Authorities said the Halls agreed to help a key figure in the South Carolina scheme hide $1.5 million from federal investigators, including the U.S. Secret Service.

Gordon Hall was convicted of conspiracy to obstruct justice and wire fraud in April 2014. He was sentenced to 180 months in prison and ordered to pay $172,000 in restitution. Benton Hall was sentenced to 24 months and was also ordered to repay $172,000.

South Carolina Ponzi Scheme

In 2015, Hall was sentenced to 96 months in prison for orchestrating a $93 million tax scam with roots in the sovereign-citizen movement. That's on top of 180 months he's already serving for his involvement in a South Carolina Ponzi scheme.

It will be a very long time before Hall is a free man again. The amount of effort he has put into the various schemes throughout his life is simply staggering.

Prologue

The Southwest Savings and Loan Association, which bought the mansion from Hall in 1989, was keen to find a new buyer for the property. They hired Las Vegas-based Eric Nelson Auctioneering, which had sold Liberace’s former residence, to auction the home. The auction date was set for December 9, 1989.

Prior to the auction, a number of open-house preview events were held on November 26, December 2-3, and Dec. 8th. Large crowds of the public flocked to see the house. A November 20, 1989 newspaper article described the house as having “unfinished construction, peeling wallpaper, and stained carpets.” The house was estimated to need $750,000 to $1 million in renovations, according to a local real estate broker.
Ahead of the auction, estimates on the house’s value were all over the place, ranging from $1 million to $18 million. Monthly upkeep on the property was reportedly $30,000 including a staff of three gardeners to tend to the estate.

December 1989 auction: An anonymous bidder submits a bid of $3.95 million for the house, but backs out. The bidder is never identified, other than as a “woman from London.” The second highest bid was $3.05 million from Bruce Jennings of Newport Beach, CA.

Jennings and his wife AnnaLeah had plans to renovate the 53,000 square foot house. They were reported to own a medieval castle-style home in Newport Beach and a ski lodge in the mountains near Lake Tahoe with an indoor waterfall that drops into a Jacuzzi.

 

Jennings is a real estate investor and part owner of a flight school, as well as a licensed pilot who has two jets: a Citation and a Lear. However, the couple changed their minds and re-listed the property shortly after buying it.

The Jennings' ended up selling the home in March 1991 for $3.75 million, earning a tidy $700,000 profit on the home. We will learn about the buyer, George A. “Geordie” Hormel II in Part 3 of this three-part series.