Apr. 17--TOWN OF MUKWONAGO, Wis.--A fire Tuesday at the sprawling and financially troubled Rainbow Springs Resort destroyed more than half of the 600,000-square-foot structure, which has long been the area's most expensive white elephant. Rainbow Springs Resort 

Firefighters hose down the charred hulk of the Rainbow Springs Resort in the Town of Mukwonago. More than half of the 600,000-square-foot main building was destroyed in Tuesday's blaze. The fire was reported about 2:15 a.m. and was extinguished by afternoon. 

Photo/William Meyer Firefighters take a break after they contained the blaze at the Rainbow Springs Resort. Eighteen departments assisted in battling Tuesday's fire. 

No one was injured in the blaze, which was reported about 2:15 a.m., said Town of Mukwonago Fire Chief Jeff Rolfe. 

"We tried to do what we could, but when we got here, I knew a quarter of the building was already gone," Rolfe said. 

About 200 firefighters from 18 departments assisted in battling the fire, drawing water directly from Rainbow Springs Lake. 

Fire departments that assisted came from as far south as Lauderdale and LaGrange and as far west as Whitewater. The Racine Fire Bells, a volunteer organization that aids firefighters with food and first aid, was also called to the scene. 

Two construction companies used backhoes to knock down a portion of the building to prevent the fire from spreading further, Rolfe said. 

That tactic stopped the fire before it consumed what many people know as the Haunted Hotel, an elaborate fun house that operates for charity before Halloween every fall. 

The fire was extinguished by Tuesday afternoon, and crews began to tear down the burned portion of the building. 

Rolfe said late Tuesday that no cause had been determined. The state fire marshal, the Sheriff's Department's fire investigator and the federal Bureau of Alcohol, Tobacco and Firearms were assisting in the investigation. 

Asked if the fire was suspicious, Rolfe said: "There are leads that they are following." 

The fire destroyed lawn mowers and landscaping equipment housed for the resort's two 18-hole golf courses. The machines had been stored inside the building. 

The golf courses were closed Tuesday. Assistant pro Dan Davis said they probably wouldn't reopen until Thursday. 

Longtime golf course groundskeeper Ken Hansen was stunned by the devastation. 

"It's bad," he said. "This is a landmark around here. You know it's never going to be rebuilt." 

Rainbow Springs is located on 900 acres off Highway LO. The 760-room hotel never opened, although a 40-room lodge did business briefly. Both have been vacant for more than 30 years. 

Earlier this month, a lender for the second time in three years sought to foreclose on part of the resort for failure to pay bills. 

The foreclosure action is only on the golf courses, said Brian McGrath, attorney for Bank of America Commercial Finance Corp. in Wilton, Conn. 

As part of an effort to resolve an earlier foreclosure action on Rainbow Springs, the property was split in 2000. The golf courses remain under the mortgage, but the hotel, conference center and lodge were released, he said. 

McGrath said the golf course owners -- led by developer Allan Feker -- owe $1.2 million. They have not made a payment since January and have not contacted the lender about the foreclosure action or a payment plan, he said. 

The resort owners owe more than $107,000 in delinquent property taxes for 2001, according to the Waukesha County treasurer's office. 

Feker, who has homes in California and South Carolina, could not be reached for comment. Neither could representatives from Golden Ocala Golf Company Inc., a Florida company sued in the latest foreclosure action. Feker is listed as a partner of Golden Ocala. 

Feker's brother, Michael Feker, was at the resort Tuesday but declined to comment. 

The vacant resort was maintained by employees of the golf courses, said attorney Steven Steinhoff, the registered agent for Rainbow Springs Golf Company Inc. Steinhoff didn't have an estimate of the building's value and didn't know whether the structure was insured. 

Rainbow Springs and Golden Ocala Golf Company staved off another foreclosure action filed in January 1999. 

The resort has been plagued by financial problems since it was built in the late 1960s by developer Francis Schroedel, who poured millions of dollars into the project, only to run out of money before he could make his longtime dream a reality. 

Schroedel's friends have said he put a curse on his beloved project, telling them, "If I can't open it, no one will." 

Whether the local lore is true or not, the resort has been snake-bit. Proposals to create a retirement community, a casino, a religious retreat and a federal Jobs Corps center never got off the ground. 

The property has had several owners over the years, including two investment firms that purchased the resort in 1986. By 1990, they were bankrupt. 

In 1994, Feker and his partners purchased the operations for $4.2 million in federal bankruptcy court. 

By Jacqueline Seibel and Lisa Sink 

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(c) 2002, Milwaukee Journal Sentinel. Distributed by Knight Ridder/Tribune Business News. BAC,