Elin Nordegren's property in North Palm Beach, Fla.
Splash News Online
, Tiger Woods
, last week let loose a bulldozer on the $12-million oceanfront mansion she bought last year because, her builder tells PEOPLE, starting over made the most economical sense.
The 17,000-ft., six-bedroom home in a gated community in North Palm Beach, Fla., was built in the 1920s, Dan Reedy of Onshore Construction and Development, tells PEOPLE. "It wasn't built to the South Florida wind-loading codes of today that were put in place because of hurricanes. We had an architect and a structural engineer out here and everyone agreed that it made more sense – structurally and economically – to tear it down and start over."
But it wasn't a total loss. Nordegren gave Habitat for Humanity of Martin County, Fla., four weeks to methodically go through the structure and salvage tens of thousands of dollars worth of cabinets, hardware and fixtures. That's when termite and carpenter-ant infestations were discovered, says Habitat's director of deconstruction, Bobbi Blodgett.
"When we pulled out the windows, the bugs were everywhere," says Blodgett. "To rebuild that house would have been ridiculous. We're so grateful to Elin. It's rare we get this kind of donation."
Adds Reedy, "Elin could have had a garage sale and made a lot of money. But she wanted everything to go to charity."
Nordegren, who celebrated her 32nd birthday on New Year's Day, is living in a nearby rental home with her two children – daughter Sam, 4, and son Charlie, 2 – while construction on her new home is ongoing.
As for reports her romance with wealthy New York businessman Jamie Dingman
is heating up, a friend of hers tells PEOPLE, "They are still dating, that's all. Nothing new there."