Historic Cave Hill estate in foreclosure

bfortune@herald-leader.comJune 21, 2009 

Cave Hill, the historic Lexington estate that once served as the state's temporary governor's mansion when John Y. Brown Jr. was in office, is in foreclosure and scheduled to be sold on July 27 at a Fayette County master commissioner sale.

Bruce Fein, a Washington D.C. constitutional lawyer, and his wife, Mattie Fein, own the property. They bought Cave Hill from Brown in July 2006, for $1.9 million.

The 17-acre estate, the site of elegant parties while Brown was governor, has a 7,500-square-foot residence — the original portion was built in 1821 — pool, tennis courts, a three-bedroom guesthouse, putting green and horse barn.

The house is listed on the National Register of Historic Places.

"John bought that house for me, right after we got married, " said former First Lady Phyllis George. "It was my dream house. I wanted an old Southern mansion with big white columns."

In the past three years, the fortunes of the stately house and once immaculately groomed grounds have fallen on hard times. It is abandoned, neglected and a judge has ordered it be sold to pay the mortgage that the owners have defaulted on.

The historic mansion has been empty since it was purchased by the Feins, according to Mattie Fein. The couple put it back on the market in December 2006 for $2.45 million.

Glass in the back door has been broken out and trespassers jimmied the lock to get inside, said George, who has seen the mansion. Wood floors are warped from water damage. The recent ice storm left the lawn littered with broken limbs and downed trees, which have not been cleaned up.

"Talking about it breaks my heart," George said.

The Feins bought Cave Hill after spending two weeks at the Kentucky Horse Park in May 2006 while their two daughters competed in a hunter-jumper horse show.

"It hit us this would be a really wonderful place" for the children "to have a really wholesome environment," Mattie Fein said at the time. She grew up riding and showing horses.

Bruce Fein, an assistant attorney general under President Ronald Reagan, writes a weekly column for the Washington Times and Slate, an online political magazine. He and his wife own Lichfield Group, which produces political shows for television and does celebrity public relations.

According to court records, Cave Hill went into foreclosure after the Feins defaulted on a $1.3 million mortgage from Logan Asset Back Fund, a private lender in Boca Raton, Fla. The mortgage was held by Cave Hill LLC in the spring of 2007, but personally guaranteed by the Feins.

Six months later, the Feins and Cave Hill LLC stopped making the $16,800 monthly payment on an interest-only loan, states a lawsuit brought by Logan Asset Back Fund.

Court documents show that in the spring of 2008, the couple filed for divorce.

Coldwell Banker McMahan Co., a Lexington real estate firm, joined the Logan Asset lawsuit, claiming that a $15,000 check from the Feins as deposit on the purchase of Cave Hill was returned for insufficient funds.

"There's been a lot of controversy about the place and why it got into this situation," Mattie Fein said in a phone interview from a Maryland horse show. "It was simply two people deciding they were not going to be married anymore."

In her divorce action, Mattie Fein said she's asserting that equity in Cave Hill belongs to her. "All the money for buying Cave Hill came from my family's money. Obviously, that was something we wanted to protect," she said.

Telephone calls to Bruce Fein were not returned.

Last month, Fayette Circuit Judge Ernesto Scorsone ordered Cave Hill be sold by the master commissioner to raise $1.3 million, plus additional costs including interest and taxes. If the sale does not raise the needed amount, he ruled the Feins would be held individually liable.

The foreclosure sale is set for noon, July 27, in the first floor courtroom in the Circuit Court building.

In her phone interview last week, Mattie Fein said she had a buyer for the property and had signed a contract the previous evening to sell Cave Hill. She declined to give the purchase price or the prospective buyer's name except to say he did not live in Kentucky and was not in the Thoroughbred business.

"He has lots of experience with these kinds of historic properties. ... And he certainly has funds to purchase the property," she said. The individual wants to close on the deal in the next three weeks, she said.

The Feins' attorney in Lexington did not return calls to confirm the sale.

However, Eric Case, a Lexington attorney representing the mortgage holder Logan Asset Back Fund, said, "We have not been contacted about a contract being in place for the sale."

He added, "We, as the mortgage holder, have a mortgage on the property. Before they can sell the property, they have to call us. We would have to be paid, just like any mortgage holder."

Mattie Fein indicated that she and Bruce Fein did not agree with Scorsone's ruling. "Five or six issues have real legal problems," she said.

If the private sale does not go through, "if there is some sort of snafu ... we intend to appeal the court's decision to the Kentucky Supreme Court, as well as to the Supreme Court of the United States," she said.

Former Gov. Brown, who made his fortune as chief executive officer and co-owner of Kentucky Fried Chicken Inc., and George, a former Miss America, bought Cave Hill soon after they married in 1979. The purchase price was $450,00.

Brown was trying to decide whether to run for governor. "I didn't have residency in Kentucky at that time," he said in a telephone interview last week.

Later that year, Brown, a Democrat, was elected governor. The couple moved into the Governor's Mansion in Frankfort and lived there a month before it was condemned by the fire marshal.

"We decided to live at Cave Hill. We worked around the clock to get the house ready. In six weeks, we moved in," George said.

The Browns added a sixth bedroom and a breakfast-sitting room. It was furnished with period antiques including a chandelier, originally made for the White House, that hung over the dining table that could seat 20 people.

The Browns entertained frequently, using Cave Hill to sell Kentucky, the former governor said. "It was part of our Kentucky presentation. It was a special place and people wanted to be invited to visit," he said.

The Browns threw elaborate post-Derby Day parties on the lawn. Guests included actor Gregory Peck, TV host Barbara Walters, singer Kenny Rogers, Miami Vice star Don Johnson, developer Donald Trump, artist Andy Warhol and boxing great Muhammad Ali. Bill and Hillary Clinton visited while he was governor of Arkansas.

A helicopter pad was built in the field behind the mansion so Brown could shuttle between Lexington and his Frankfort office. He held cabinet meetings at Cave Hill and entertained business prospects.

This week Brown said he was not particularly sentimental about Cave Hill and not interested in buying back the property. "Time moves on. Circumstances move on. But it's a great memory," he said. Brown and George were divorced in 1998.

However, he acknowledged "Two people in the Brown family have a strong emotional attachment to the place," referring to George and their daughter Pamela, 25, a reporter and weekend anchor for ABC affiliate WJLA-TV in Washington, D.C.

Pamela and her brother, Lincoln, 29, were raised at Cave Hill.

"Pamela loves it better than her mother. She says she is going to make enough money to buy it back someday," Brown said.

Reach Beverly Fortune at (859) 231-3251 or 1-800-950-6397, Ext. 3251

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