If it was a cheap frame or you were broke, I'd say try a new stem and make it work. Since neither is the case, sell the frame and find something that fits. As others have mentioned, you can compensate for the too low and too close cockpit with a longer and higher stem, but it will change the way the bike feels. It's also likely that your saddle position is wrong (do you have a setback post?) if the frame is that much smaller than ideal.