$4 million Rehoboth-area mansion gets leveled

• Mansion was built in 1990s by developer Mario Capano along Rehoboth Bay at mouth of Bald Eagle Creek%2C near Rehoboth Beach Country Club.
• Demolition by new owners%2C Alan and Ellen Levin%2C creating buzz around the area.

During its short lifespan, she proudly flaunted her bling-bling to the old-money set at the country club next door.

Now, the bay-front palazzo, once the home of real estate developer Mario Capano and his wife, Rebecca, has gone the way of the bulldozer, generating as much buzz in death as she did in life.

The new owners of 173 East Side Drive near Rehoboth Beach, the Levin family, demolished the opulent 10-bedroom mansion in the spring to make way for a home that better fits their lifestyle, said Delaware Economic Development Director Alan B. Levin.

The demolition of the 12,200-square-foot palace has generated a lot of chatter in the area, including among members at the Rehoboth Beach Country Club, where the golf course once bordered the villa, said Jim Killion, general manager of the club.

"After driving past it for 12 years, I drove by one day and they had already started to tear it down," said Killion, adding there hadn't been much activity at the house in recent years.

Bill Sargent, a commissioner with the Rebohoth Beach Board of Commissioners, said there are "a lot of surprised people."

"It's not every day that people take an asset that costs that much money and tears it down. It'd be one thing if it was 100 years old or 50 years old, but it's fairly new," Sargent said.

The Levin family bought the neoclassical-style house with its own boat dock and beach on Rehoboth Bay last year through a limited-liability company called JE Real Estate LLC for $4.13 million, according to Levin and public records.

At one point, the house and 1-acre property had been listed for $4.75 million. Ellen Levin is the managing member of JE Real Estate LLC.

"We purchased the site for the land, the existing house did not fit our lifestyle. It is our intent to build our primary residence on the site and live there for many years to come," Levin said.

Before heading the Delaware Economic Development Office, Levin was chief executive of the 76-store Happy Harry's drugstore chain, a business started in 1962 by his father, Harry. It was sold to Walgreen Co. in 2006 for a reported $225 million.

For many at this resort community, the house was a statement of excessive luxury a la 1990s. With a color scheme dominated by white, the house was approached through a gated entry. Guests entered through a grand front portico to a hallway that featured a dual-spiral staircase. "It was monstrous," Sargent said. "It was almost like (Capano) was trying to build a building that would compete with the country club."

According to Zillow.com, it was outfitted with 13 full bathrooms, a cabana bar, game room and media room.

The dc.curbed.com real estate website wrote about its demolition with tongue in cheek, saying it was "immensely disappointing" that the "manse is no more."

"When the '90s Italian mansion roared on the market at $7.5 million in 2008, it couldn't get any bites. Five years and several pricechops later, the LLC that eventually bought the place for $4.137 million decided that a wrecking ball might be the best option. That said, maybe destroying that weird wet bar with palm tree tiled backsplash and a giant fish overhead needed to happen, regardless."

Levin said the house was sold completely furnished. "My wife made the decision to donate all the furniture, which included 10 bedrooms, the systems, and appliances to Habitat for Humanity Sussex County," Levin said.

Mark Carter, head of philanthropy at Dogfish Head Craft Brewery in Milton, sent about 40 people out to help Habitat for Humanity remove toilets, screens, countertops and "anything salvageable."

When the Capanos built the lavish house in the late 1990s, it became the scene of a glitzy benefit event for 250 people with tents that included the swimming pool and a ballroom-worthy dance floor, according to a report in the Cape Gazette in 1998.

But that didn't stop the chatter in town. Killion, who has been in Rehoboth Beach for 12 years, said the folklore around town is that after Mario Capano was blackballed by the club he built the palazzo for "revenge."

Capano, 69, who in 1990 proudly proclaimed "I'm a multi-millionaire," was known then to have a 50-foot yacht and a house in Delray Beach, Fla., where he spent half the year. In recent years, Capano has been called a "philanthropist," but many remember the negative headlines involving political corruption scandals. In 1976, Capano went to prison for obstructing a federal investigation into zoning practices followed in 1984 by a fraud indictment for allegedly cheating the U.S. Department of Housing and Urban Development out of mortgage money. The charges were dismissed, but the government got $700,000 through a civil case.

Capano could not be reached for comment.

Senior reporter Cris Barrish contributed to this article.

Contact Maureen Milford at (302) 324-2881 or mmilford@delawareonline.com.

Contact Molly Murray at (302) 463-3334 or mmurray@delawareonline.com.