Dolphin Mansion: the country’s ugliest house hits a fascinating planning snag.

The Dolphin Mansion is up for sale again!  Indianapolis’s most notorious home has struggled to find an occupant for the last seventeen years, but it’s not for lack of trying.  Actually more of a campus with six structures on a mega-lot, surrounded by mid-century middle-class housing that’s a lot humbler (and I mean that in the most flattering of terms), this mansion on Kessler Boulevard (the Kessler Mansion) has suffered exactly the sort of fate that the neighbors would have anticipated after its owner and builder, Jerry Hostetler, died in 2006.

Conceived and constructed over a few decades, starting at a point in time when the Fall Creek Valley area (west of Brendonwood, for those in the know) was quasi-rural and outside the Indianapolis city limits, this eccentric villa is out of step with the overwhelming majority of buyers.  And it’s not just because most people can neither afford nor are seeking a 30,000 square foot home. The aesthetic of the Dolphin Mansion hasn’t exactly aged well—not that it was ever most people’s definition of a dream home.  Here’s a photo the exterior from the frontage along the road:

And yes, there amidst the overgrown shrubbery, are just a few of the dolphins that earned the home its nickname.  But Hostetler couldn’t satisfy his cetacean obsession through just one sculptural feature.  The place has a multiple, and it used to have many:

The dolphins are mere whimsy.  The source of the controversy is less the size of estate than its mismatched styles, its custom windows, and its hodgepodge character, endowing it with its own paradoxical unity.  Every square inch of the house is equally tacky. There’s nothing else like it anywhere else in the world—exactly Hostetler’s intent.  But then, Hostetler apparently never bothered to ask the question: if his descendants didn’t want it—they may very well not wish to deal with the formidable maintenance costs—who else would possibly be interested?  (It turns out Hostetler had no direct descendants: his only daughter pre-deceased him.)  He left the home to his secretary.

Though unique on its own aesthetic terms, homes like the Dolphin Mansion aren’t all that rare, as viewed through a lens of real property.  Often constructed by the nouveau riche from the same rapid impulse in which the owner earned his or her riches, they typically serve as a testament to the millionaire-in-question’s distinct vision, and, more often than not, reflect their monumental egos.  A shrine to themselves—a personal Xanadu.  (Compare this to the carefully conceived, tasteful details of the late philanthropist Christel DeHaan’s estate—just six miles away from the Dolphin Mansion.  Sure, her home was opulent, but it shows what a coherent long-term vision can do to a property’s resale value.) But when a wealthy individual strives for customized everything because he/she can afford to do so, with no consideration for the viability of the immobile product over a half century, what’s left after the millionaire moves or perishes than a vainglorious folly?  A massive white elephant?

These vainglorious villas typically occupy massive lots in the country, or at least a large city’s exurban fringe.  And, when abandoned, they become the stuff of YouTube legend through daredevil film crews who explore them, usually illicitly.  In that regard, the Dolphin Mansion is an exception for its comparatively urban setting, though 4923 Kessler Boulevard East Drive was itself a humble ranch when complete in 1953; Jerry Hostetler was but a teenager.  His first major business venture as a young adult was running a prostitution ring, to which he pleaded guilty in 1964.  His more lucrative enterprise followed, in the construction industry, where his wealth proliferated almost as much as his weight.  (Always a large man nearing seven feet tall, Indy’s “Mr. Big” weighed nearly 500 pounds at his death).  Though more reputable than pimping, his construction earnings are still dubious.  He purchased this run-of-the-mill three-bedroom ranch home on Kessler in the 1970s, then acquired at least one of its neighbors, expanding in fits and starts over the years, in between bankruptcy declarations.  Each addition reflected Hostetler’s passing fancy at that moment, eventually totaling 11 bedrooms, 7 baths, and a nearly 200,000 gallon swimming pool.  The Dolphin Mansion includes turrets, ballrooms, wet bars, a grotto with a hot tub.  Evermore the pimp palace.

But some of these eccentricities aren’t just custom-made; they reflect a sensibility that few people are likely to share.  Why, for example, would he have continued to build semi-levels, ramifying off of the original ranch house, complete with opulent curved staircases, all while he was getting older and packing on the pounds?  As one listing noted, about half the sweeping staircases only lead to a single room.  Even more baffling: as the surrounding area urbanized, becoming part of the City of Indianapolis through Unigov in 1970, why didn’t Hostetler ever pursue integration with the City wastewater system?  It’s still on septic.  Half of the campus seemed to accommodate decadent parties that he threw regularly in the swinging’ 70s and coke-fueled 80s, but creditors encircled him by the 90s; those dolphins no doubt assumed the appearance of sharks.  As the new millennium approached and Hostetler’s construction mafioso days reached their sunset, it’s unlikely that he used more than half the home, given that his mounting debts precluded him from making even basic repairs, not to mention his own physical limitations.  By the early 2000s, the final years of Hostetler’s life, the Dolphin Mansion was rotting around him.

Hostetler’s poor secretary had no idea what to do when Mr. Big handed her the architectural albatross of an estate upon his death.  As the online magazine Do317 notes, various banks had financed the additional wings separately, so some portions fell into foreclosure and others got sold—along with quite a few of the dolphin statues—to pay off remaining creditors.  A few years later, Chad Folkening, a successful local internet entrepreneur, bought the Dolphin Mansion with the hopes of turning it into an AirBnB-style time share.  Though he spent a few million refurbishing the most dilapidated parts while briefly calling it his home, Folkening’s most successful ventures with the property were as a stint on HGTV, a party home for musical artists recording and producing in Indy, and (my favorite) a prospective site for a Big Brother-style reality TV show that never materialized.  Folkening put the home back up for sale in 2012 for $2.2 million, marketing the house for co-working and quirky weekend getaways.  Branding it The Ugliest House in America became an ironic selling point.   As a 2017 New York Post article indicates (complete with a great assortment of interior photos), he reduced the price with multiple new liftings, falling even below $1 million.  

Finally, in the spring of this year, it had a new buyer.  While most real estate listings in metro Indianapolis have risen considerably—up to 40%—in the months following the pandemic, Spann Alexander Reig LLC paid a meager $660,000 for it.  This fledgling firm intends to invest $1.5 million back into it to convert it into a small apartment community, approximately ten units, with management on site, and all the gaudy Hugh Hefner features as amenities for the tenants, as well as more parking, a fitness center, recreational space, viewing decks, and improved security lighting.  With such amenities shared among only ten units, the Dolphin Mansion could easily pass as an apartment complex that is (that egregiously overused word) luxury.

And there’s the rub.

A ten-unit apartment complex might be the most practical reuse of the property, but does it really fit?  I’m hardly one to cavil about “fitting in with the existing community character”.  Quite the opposite, in fact: I’ve defended many a conversion or infill property that increases density and intensity in urban settings, quite vociferously here on my blog and (even more targeted) on Urban Indy.  At least one neighborhood association in the nearby area supports the apartment conversion.  But the Metropolitan Development Commission will need to rezone the property from D-2 (dwelling) classification to D-P (a planned development).  City planning staff is recommending denial.  And while I have felt in the past that the City caters too much to anti-urban NIMBYism, I believe this is probably the right decision in this instance, for a few reasons.

1. Infrastructure in the area accommodates medium- and low-density residential.  The surrounding Fall Creek Valley area was suburban or even exurban in the early 1950s, when the hen laid the egg that ultimately hatched into the Dolphin Mansion.  (Had enough animal metaphors already?)  The single-family ranch homes south of Kessler Boulevard East Drive (near DeQuincy Street) are much older and lower-density (about 4 dwellings per acre) than the homes built into subdivisions on the north side of this collector (closer to 8 per acre).  While four-lane Kessler Boulevard East Drive can handle more traffic, the area remains eminently suburban and not really walkable.  The density of water and wastewater networks befit single-family homes, a huge contrast from the downtown Chatham Place development where I strongly encouraged multifamily development to push for higher density.  I mean, the Dolphin Mansion still uses septic; it’s unlikely but still possible that neighboring homes (especially around DeQuincy) do as well.
2. An eccentric and wealthy homeowner should not get privilege to find loopholes around regulations that the plebeians must follow.  As the map above indicates, showing the Kessler Mansion (I prefer the “dolphin” nickname), Hostetler took a single-family detached home, transformed it beyond recognition, and, when running out of room on that conventional lot, purchased at least one (and maybe two) adjacent parcels to expand.  (Check the map below closely and notice that sliver of a parcel to the east; Mr. Big most likely bought a parcel, subdivided it and merged half with his own, leaving a demi-parcel too small to build, but one that allowed him to divide his own property declarations across a smaller useless lot, saving a hefty chuck in property taxes.  Smart little bugger.)  Just because most homeowners don’t pursue the real estate strategies that Hostetler did doesn’t mean they wouldn’t.  And setting a precedent for one person with seemingly unlimited funds only invites other people to push the envelope even further.  Rinse and repeat, then the fundamentals of zoning regs break down.
3. Fundamentally, rezoning from D-2 to D-P in this instance would be almost the textbook definition of spot zoning, where city planning leadership reclassifies its zoning specifically to serve purposes for uses not otherwise permitted, usually to favor a single property owner.  The practice creates a zoning island—a single parcel that defies all land use laws that surround it.  Spot zoning is not usually illegal, but the public generally finds it unethical so it often opens a floodgate for civil suits.  The only reason the Spann Alexander application for rezoning doesn’t 100% pass as spot zoning is because Hostetler cobbled together his property from multiple lots; the relaxing of zoning restrictions from D-2 to D-P is taking place on what originally was a cluster of parcels.  Since multiple structures rest on the merged parcels, it’s fundamentally no longer a single-family detached house by most legal definitions.  But does it matter what historically was when it comes to changing the laws?  Not likely unless the property enjoys historic protections.  And the Dolphin Mansion certainly isn’t historic.  Exploiting the grandfather clause to save an eccentric building is a pretty dodgy move for any city, at the expense of the neighbors’ assurance that they would always live next to a home and not an apartment complex, which is what the Dolphin Mansion would become.  

The final verdict is not yet out for Spann Alexander as the new owner of the Dolphin Mansion.  But the fact that the City recommends denial of their rezoning request leaves them few options.  The tiny, little-known architect/developer firm may have more wisely pursued a special use permit of the property, akin to the application for operating a home business that occasionally requires client visitors.  But that would be dishonest; special use permits typically have a termination date, and the goal here is to convert the Dolphin Mansion into apartments in perpetuity.  It’s possible the owner might have pursued a sort of internal subdividing akin to the byzantine foreclosure proceedings, taking the biggest portion of the house as “main” and seeking to lease the “satellite structures” as accessory dwelling units (ADUs, or granny flats).  But that would require both permissive ADU laws and the owner to be a primary resident.  Lastly, a variance would be a more credible option—an indicator of hardship that requires regulatory relief, to achieve viable use of a property. Variances are the least extreme, but they usually requires evidence that the existing regulations in place would constitute a taking—i.e., a denial that fundamentally prevents use of land for any viable economic purpose.  Denial or rezoning here is not a taking; a person could still use the Dolphin Mansion as a single-family residence.  No single person with money to burn wants it for that purpose; it couldn’t find a buyer after Chad Folkening, who no doubt found it as much of a white elephant as many Hollywood celebs’ tributes to their vanity scattered throughout Malibu or Beverly Hills.  By this point, it needs tons of rehab.  And did I mention it’s still on septic?!?

If the Metropolitan Development Commission takes the City’s recommendation and rejects rezoning to benefit Spann Alexander, the future of the Dolphin Mansion is bleak.  Spann Alexander might be able to pursue some of those other options—ADUs, special use, a variance—but these efforts are likely to elicit the same reaction, as well as considerable opposition from the homeowners nearby.  The only other marketable use I can think of—an events space for weddings and special events—would be no better than apartments, since it would require a fundamental change in the inherent use stipulated by D-2 residential zoning.  Too bad.  The city planner in me wants to see the execution of good planning principles, and an apartment conversion is less wasteful, promoting efficient use of land and infrastructure without sending lots of stone and stucco into the landfills.  But, alas, the Kessler Mansion, without a viable vision or a buyer aligned with Mr. Big’s eccentricities who will actually live at the place, seems increasingly likely to face the wrecking ball in the years—or even simply months—ahead.

Just be sure to grab the remaining dolphins beforehand.  They at least deserve better.

All photos courtesy of Mary Hasser.