The IRS will auction the castle, carriage house, barn, and 150-acre site with an easement. (EG&G Technical Services)

In Colorado's stunning Crystal River Valley stands one of the country's most unusual mansions, an elaborate architectural confection. John Cleveland Osgood, who made his fortune in the coal industry, built his stately 24,000-square-foot Tudor country home between 1899 and 1901, calling it Cleveholm Manor. He imported European craftsmen to adorn the one-of-a-kind, 42-room house where he entertained the likes of Theodore Roosevelt and Buffalo Bill.

Since then, the property now known as the Redstone Castle passed through several owners. Most recently, a trio with bed-and-breakfast plans snapped it up for $6.3 million. Then a scandal broke.

Leon and Debbie Harte and Norman Schmidt had purchased the castle in the spring of 2000 with ill-gotten gains from an international-investment fraud scheme in which seven people took "investors" for $56 million. Eventually the U.S. Internal Revenue Service became the caretaker of the property, seizing it in 2003.

Last month, the IRS announced plans for a public auction of the castle, along with its carriage house, barn, and 150-acre site, on Mar. 19. "Our goal is to balance the right price for the victims with the need to preserve the castle and the needs of the surrounding community. The castle has a big impact on the local economy," says IRS Special Agent John Harrison.

Since the announcement, a coalition of nearly 10 groups, including the National Trust, Colorado Preservation, Inc., the Colorado Historical Foundation, and the Redstone Historical Society, has worked around the clock to put a conservation easement in place before the sale. Formalized in the early days of March, the easement will protect the exterior of the castle and its outbuildings as well as historic features and furnishings inside the castle and portions of its landscape.

"We're a lot more comfortable now that a new owner can't come in and strip the Tiffany light fixtures away and sell them on eBay," says Darrell Munsell, president of the Redstone Historical Society, based in Carbondale, Colo. At a meeting on Feb. 25, the group convinced the government to auction the property in one parcel rather than the three originally announced, more good news for preservationists.

Redstone's roomy carriage house (EG&G)

"The castle is one of the real gems of Colorado," says James Lindberg, director of preservation initiatives for the National Trust's Mountains-Plains Office. "This is a building that has an interesting history and great architectural significance in both its exterior features as well as a completely intact interior. It's got a lot of integrity for a building of that age."

Osgood, a self-made man who founded the Colorado Fuel and Iron Company, was a pioneer in the practice of industrial paternalism. He believed in the link between employee satisfaction and productivity and established the town of Redstone as a model he hoped other industrialists would embrace for their workers.

Osgood built 84 comfortable cottages along Main Street between 1900 and 1902, providing electricity and running water for workers and their families. Bachelors resided in a spacious boarding house. Unlike the grim coal camps of the day, the town boasted every convenience, from its own post office, school, and library to a theater and clubhouse. In 1901, the company newspaper quoted a happy resident: "We do not have monotonous rows of box-car houses with battened walls painted a dreary mineral red, but tasteful little cottages in different styles, prettily ornamented, comfortably arranged internally, and painted in every variety of restful color."

Between 1900 and 1909, 249 coking ovens produced 11,000 tons of high-grade coke a month for the Pueblo steel mill. Today 44 of the coke ovens survive across the river, along with about 20 cottages and small buildings along Redstone Boulevard. The former boarding house endures as the Redstone Inn, a Historic Hotel of America.

Architect Theodore Davis Boal, who also designed the village, based his plans for Osgood's 4,200-acre estate on an English feudal manor. He placed the house an "aristocratic mile" from town, looking out on the pristine Crystal River and the red-rock mountains that gave the town its name. Outbuildings dotted the estate: two gatehouses, stables and a carriage house, a greenhouse, a gamekeeper's cottage, and a hydroelectric plant. Visitors traveled by steamship and railroad to Redstone, where horse-drawn carriages transported them to the welcoming courtyard at the magnificent manor house.

The manor house's library (EG&G)

Osgood's second wife, Alma, known to villagers as "Lady Bountiful," hosted lavish parties. In the evening, Tiffany chandeliers cast a glow over the Osgoods and their guests, who gathered in the drawing room before a grand, two-story fireplace. Dinner was served in the stunning Russian tea room, decorated with red velvet, Honduran mahogany paneling, and a delicate gold-leaf ceiling. After dinner, the ladies adjourned to the French music parlor, with its marble fireplace and frescoed ceiling, while the men played billiards in the game room.

The social whirl came to a close in 1903 when Osgood lost control of his company to John D. Rockefeller and George Gould. He kept ownership of the town, however, and Redstone continued to house workers. In 1909 they closed down the mine and coking camp. "That marked the end of the social experiment," says Darrell Munsell, "but even though it lasted for less than a decade, Redstone was a primary example of an industrial betterment village." As for Osgood, he seldom visited his country house until 1924, when he returned, hoping to restore the village. He died before he could finish the job.

Over the past two summers, several thousand tourists have taken a walk into history at the castle, thanks to a cooperative arrangement between the Redstone Inn and the IRS—tours locals hope will continue. "In terms of long-term goals, we're halfway there with the easement," says Lindberg. "The other half is what the public use would be to allow people to continue to experience the castle, whether it's a museum or a B&B or some other kind of public or non-profit use."

What the castle becomes depends on the next owner, of course. "The Redstone Historical Society would like to see a philanthropist buy this historic treasure with the full intention of preserving it and keeping it open to the public," Munsell says. "That would be a great gift to the people of this nation."

For more information about the auction, visit www.treas.gov/auctions/customs/redstone01.htm.

Catherine Clarke Fox, who writes from Herndon, Va., always leaps at a chance to visit Colorado.

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