A family's $14 million fortune swiftly slips away

WAMEGO, Kan. — Grateful to have found work in this tough economy, Nick Martin teaches grape growing and winemaking each Saturday to a class of seven students in a simple metal building here at a satellite campus of Highland Community College.

Then he drives 14 miles in an 11-year-old Ford Explorer to a sparsely furnished tract house that he rents for $900 a month on a dead-end street in McFarland, a smaller town. Just across the backyard is a shed that a neighbor uses to make cartridges for shooting the prairie dogs that infest the adjacent fields.

It is a far cry from the life that Martin and his family enjoyed until recently at their Adirondacks waterfront camp at Tupper Lake, N.Y. Their garage held three stylish cars, including a yellow Aston Martin; they owned three horses, one that cost $173,000; and Martin treated his wife, Kate, to a birthday weekend at the Waldorf-Astoria, with dinner at the “21” Club and a $7,000 mink coat.

That luxurious world was fueled by a check Martin received in 1998 for $14 million, his share of the $600 million sale of Martin Media, an outdoor advertising business begun by his father in California in the 1950s. After taxes, he kept about $10 million.

But as so often happens to those lucky enough to realize the American dream of sudden riches, the money slipped through the Martins' fingers faster than they ever imagined.

They faced temptations to indulge, with the complexities and pressures of new wealth. And a pounding recession pummeled the value of their real estate and new financial investments, rendering their properties unaffordable. The fortune evaporated in little more than a decade.

While many millions of Americans have suffered through this recession with only unemployment benefits to sustain them, Martin has reason to give thanks — he has landed a job at 59, however far away. He also had assets to sell to help tide his family over.

Still, Martin, a strapping man with a disarming bluntness, seemed dazed by it all. “We are basically broke,” he said.

Though he faulted the conventional wisdom of investing in stocks and real estate for some of his woes, along with poor financial advice, he accepted much of the blame himself.

“We spent too much,” he conceded. “I have a fourth-grader, an eighth-grader and a girl who just finished high school. I should have kept working and put the money in bonds.”

Kate Martin recalled the summer night in 1998 when the family was having a spaghetti dinner at home in Paso Robles, in central California, and a bank representative called to ask where to wire the money. “It seemed like an unbelievable amount,” she said.

Soon after the money arrived, the family decided to leave Paso Robles, amid some lingering tensions that Martin felt with his brother and brother-in law, who had run the business. Martin had never been in management at the billboard company, though he had been on the board and worked at Martin Brothers Winery, another family business.

First, the Martins bought a house in Somerset, England, near the home of Kate Martin's parents, and he decided to write a novel. At about the same time, they spent $250,000 on the 3.5-acre camp with four structures on Tupper Lake, deep in the Adirondacks, as a summer home. They began extensive renovations at the lake, adding a stunning three-story boathouse and two other buildings.

Clouds gathered quickly. Life in England turned sour when Nick Martin's novel, “Anthony: Conniver's Lament,” did not sell, and the family's living costs — school fees, taxes and even advice for filing tax returns — swelled. In 2002, fed up with England, the Martins chose a new base, Vermont, and plunked down about $650,000 for a home there, as renovations continued on the Tupper Lake property.

By March 2007, the Martins were determined to move to the lake full time.

They managed their expenses for a while, but the costs mounted and mounted some more as they worked at refurbishing the Adirondack property — eventually totaling a staggering $5.3�million, Martin said. He poured an additional $600,000 into the Vermont property, he said.

He vacillates between blaming the builders and blaming himself for letting costs get out of hand. “We should have built something quite modest,” he said.

Tensions rose in 2007 as summer came without any offers for the Vermont home.

So “we started selling cars, shotguns, antique furniture, whatever,” Martin said. The Aston Martin fetched $395,000. With a big gap in his employment history, he found a job teaching English at Paul Smith's College near his home in Tupper Lake for $14,000 a year. For an additional $7,000, he coached the school's cross-country runners.

Then came the financial crisis. The markets plunged, as did the value of the Martins' trust. By fall 2008, with much of the family's net worth tied up in housing, Martin faced a series of margin calls. He needed more cash in his brokerage accounts because he had been tapping into a credit line with his investments as collateral. In January 2009, he cashed in a retirement account worth roughly $91,000.

The houses could not be sold quickly. The family ultimately put the Adirondacks property on the market for $4.9 million, then quickly slashed the price by half. Last month, the Martins got an offer for just half of the latest $2.5 million asking price.

They have stopped making payments on their $1.1 million mortgage and their $53,000 in annual property taxes in the Adirondacks as well as the mortgage and taxes on their Vermont home. They cannot afford those obligations on Martin's current salary of $51,000. Their household income is down from $250,000 four years ago. At the moment, they are working with a loan modification unit at their bank.

Until Christmas, when she plans to join him, Kate Martin continues to work as a substitute teacher with autistic children at an Adirondacks elementary school: a $12,000-a-year job she loves in a place she says she is hesitant to leave. With their younger daughter, she has moved into a smaller building on their big property.

A lively woman who loves bike riding and horses, she has built a close network of friends. “What is the place in Kansas like?” she asked a reporter with some trepidation before her first visit at Thanksgiving.

Nick Martin, who moved to Kansas last April, brought the couple's 13-year-old son, Edward, to join him in the fall. He has been counting the days until his wife and Sophia, 9, come permanently. The older daughter, Kate Martin's from a previous marriage, has found work in Florida after finishing high school.

In the meantime, Nick Martin is also overseeing a 1-acre vineyard beside the Oregon Trail Road, drawing on his knowledge of the wine industry from his California days.