Antiques hold million-dollar melodies

Even by Avila's opulent standards, Mark Yaffe's home is something to behold.

With 10 bedrooms and 14 fireplaces, the 29,000-square-foot manor rises from the estate like an English countryside castle. What's inside, however, may be even more striking. The Yaffe household is a shrine to more than 100 self-playing antique mechanical musical instruments.

Some are worth at least $1 million, including the real showpieces: "orchestrions" - boxy devices with mechanical arms that pound drums, plink a xylophone and tickle piano keys.

Scattered about the home are other oddities, including antique shadow boxes with moving figurines of monkeys playing instruments, and automaton dolls, early precursors to theme-park animatronics that blink their eyes, move their lips and raise their parasols.

With all the moving figurines, his two children were "creeped out" at times, Yaffe said.

Today, a portion of the collection, once appraised at $13 million, is embroiled in a scandal that has engulfed Yaffe's rare-coin business, National Gold Exchange, which Yaffe and his brother built into one of the nation's leading gold and rare-coin dealers.

Many of the most valuable pieces will be sold as part of the company's bankruptcy case. Behind the scenes, some in the close-knit world of antique mechanical music pieces are watching the case closely with an eye toward picking up prized pieces at a huge discount.

The businessman

Yaffe's road to riches as the owner of a major coin company and a sought-after musical collection got its start in the stalls of a flea market.

Yaffe, 49, grew up in the Boston suburbs and began selling coins at a flea market in his early teens. By 1977, he was peddling rare coins to dealers out of his Boston College dorm room, and he eventually left school early to pursue the business.

Through the years, he and his brother, Alan, built the company into a major force, buying gold coins and selling them on the wholesale market and at retail to collectors. Mark served as vice president, and his brother as president, with each owning 50 percent of the company.

Outside the coin collector segment, National Gold Exchange keeps a low profile and operates out of a Carrollwood strip mall in a space next to GrillSmith restaurant. Its only sign reads a vague "NGE." Still, by 2004, the company was doing about $100 million a year. A succession of credit line increases allowed it to ramp up quickly in the mid-2000s, and by 2008 sales hit $288 million.

His business success allowed Mark Yaffe and his wife to build their massive home at Avila Golf & Country Club.

The house wasn't supposed to be so big, Yaffe said. He just wanted a large great room to feature his biggest music boxes, but his architect urged him to flank it with rooms big enough to keep the house symmetrical, he said.

The collection

Ask him about the number of pieces in his collection, and Yaffe will say he's not sure. His wife, Christel, got a touch of music box overload in recent years, so he sold a number and lost count.

"If I had to guess, it's probably 100 or 120," he said.

One is an 1860s-era, French-made cylinder box about the size of a sewing machine. A metal cylinder rotates inside the box, and as it turns past tiny "teeth," the interaction produces a sound similar to the tinkle of Christmas bells.

Christel favors the larger Hupfeld Phonoliszt-Violina.

Made for an exhibition in 1920s-era Turin, Italy, the model features three violins hanging upside down. A horsehair bow rotates around the three violins and plays their strings to sheet music. Yaffe's estimate of is value: $750,000 to $1 million.

The priciest piece is a 1910-era Hupfeld Helios III/39 orchestrion. Look inside its bowels and you'll see a set of wooden bass pipes, a mechanical arm swinging away at a drum and cymbal, and a player piano. Peak value: $3 million, Yaffe said.

Many of the biggest pieces were made in Germany or Switzerland. Individually, the big orchestrions play rollicking 1920s-era dance-hall music. But turn them all on at the same time, and they sound like kids banging on pots, Yaffe said.

Mechanical musical instruments provided the entertainment at dance halls, theaters and restaurants for decades in the days before jukeboxes, said Scotty Greene, executive director of DeBence Antique Music World, a museum in Franklin, Pa. People would stick coins into the machine and it would play the next song on its list.

"That's the concept," Greene said. "You put in money and it plays you a song. The only problem was you didn't get to choose the song."

The bank

The music stopped for Yaffe two months ago, and the businessman found his collection and his coin business in danger of being lost to the bank.

Through the years, National Gold Exchange received at least $35 million in loans from Pennsylvania-based Sovereign Bank. Collateral for the loan: the company's collection of rare coins and Yaffe's set of fine music boxes.

The bank took swift action in July, when it received a tip from a lawyer for fellow Avila resident Paul Bilzerian, who was in litigation against Yaffe. The tip claimed Yaffe had spent some of the bank money on his Avila mansion. Court testimony hasn't supported that claim. However, a bank officer testified that Sovereign Bank audited National Gold and found its record-keeping a shambles.

The bank couldn't determine what the company had in inventory. Valuable rare coins seemed to be missing.

Afraid that the collateral on its loans was imperiled, Sovereign Bank got a judge's permission to show up at National Gold Exchange and wrest control of the business. National Gold quickly responded by filing for Chapter 11 bankruptcy protection, and the two sides have been wrangling since.

Yaffe has denied the bank's allegations, and in his bankruptcy case has issued a plan to repay the bank and the company's creditors 100 percent. He has offered to sell his mansion to raise the money. It's listed with Smith & Associates real estate firm for $25 million.

In his repayment plan, he's also parting with many of his biggest, most valuable music boxes, which he has been collecting since 1981.

There aren't many people with the resources or the will to buy a $1 million antique music box. Bidders are likely to be brokers or members of a small coterie of wealthy collectors.

Wealthy collectors

The biggest collector may be Jasper Sanfilippo Sr., chairman emeritus of Chicago-based Fisher Nuts. Inside his 44,000-square-foot home northwest of Chicago is what is said to be the world's largest pipe organ, with 8,000 pipes. Sanfilippo built a 27,000-square-foot living room to hold it, according to a 2003 Forbes magazine article.

Another big collector is Paul Milhous of Boca Raton, a multimillionaire in the business of newspaper advertising circulars. Neither Milhous nor Sanfilippo would comment for this story, but Tim Trager, a prominent dealer, said millionaires often open up their collections for charity functions and small parties. It also provides an ego boost, he said.

"After you've had the Ferrari that everyone else has, or the Burger yacht that everyone else has, you like to have something unique," Trager said.

Behind the scenes, many music box aficionados are watching the Yaffe bankruptcy case, said Art "B" Bronson, the immediate past president of the 1,800-member Musical Box Society International.

Nationwide, there may be a dozen or fewer collectors of Yaffe's stature, with the resources and desire to own dozens or hundreds of pieces, Bronson said.

The recession has taken its toll and hurt music box values, especially the smaller, more common pieces. Bronson said he would be surprised if Yaffe's Hupfeld Helios orchestrion fetches $3 million or if his Phonoliszt-Violina fetches $750,000.

Ultimately, though, it comes down to a deal between two people and how badly one of them has the music box bug.

"There will be a market for (Yaffe's) machines," he said. "There will be interest in the auction, no question about it."

SURE TO SELL FOR LOTS OF C-NOTES

Mark Yaffe began collecting antique music boxes more than 25 years ago, and his collection grew to more than 100 pieces. His Avila mansion has player pianos, shadow box musical pictures, animatronics-style automaton dolls and large orchestrion instruments, which are self-playing. Some will be sold to pay creditors in his company's bankruptcy case. Among the pieces:

1920s-era Hupfeld Phonoliszt-Violina (above). One of the most beautiful items in his collection, this piece features three violins that hang upside-down on the machine's exterior. A bow made of horsehair revolves around the violins and plays their strings to sheet music. Peak estimated value: $750,000 to $1 million

1920s-era Wurlitzer 29-C. In the days before jukeboxes, dance halls and theaters had these large orchestrions. Inside is a mechanical arm to play a drum and cymbal, as well as a piano and xylophone. American-made. Estimated value: $500,000.

1910-era Hupfeld Helios III/39 Orchestrion. Measuring about 12 feet wide, this piece features most of the instruments in an orchestra. Made in Germany, its exterior has an idyllic shadow box scene featuring a moving train, German river and a Zeppelin flying overhead. Peak estimated value: $3 million.

ON TBO: Keyword: Music Box, to hear music box melodies.