The Oheka Castle auction: What to know

After 42 years, Gary Melius’ time overseeing Oheka Castle is ending Tuesday.

At 10 a.m., an auction is set to take place in Manhattan to determine who will take ownership of the historic, palatial landmark nestled in the Cold Spring Hills neighborhood of Huntington.

It's the site where, for decades, Long Island's power brokers have gathered; newlyweds, prom-goers and others have celebrated milestones; and where Melius himself was shot and wounded in broad daylight in 2014 in a case that remains unsolved.

Here's what to know about the castle, the auction, and what could be next.

What's noteworthy about Oheka Castle?

The castle was built between 1914 and 1919 — a 127-room estate on 443 acres. The current configuration features a restaurant, catering hall and hotel with 34 guestrooms and suites, all on 21 acres just north of Jericho Turnpike and next to Cold Spring Country Club. 

A listing on the website of Concierge Auctions, which is running the auction, markets Oheka as "one of the rarest trophy properties in the country."

It was constructed as a summer home for investment banker Otto H. Kahn, who named it using a play on his initials. It has served various uses over the decades and operated as a military academy from the late 1940s to 1979.

Melius bought the property in 1984 and transformed it into an opulent catering venue. He serves as operator of the castle, lives on-site, and has an ownership stake in Kahn Property Owner LLC, the entity that owns the castle.

Melius, 83, has been a political power broker on Long Island since even before he purchased Oheka. The subject of a seven-part investigation by Newsday in 2018, he declined to be interviewed ahead of the auction.

Huntington Town Historian Robert Hughes said the castle has been successfully adapted over the years — from a millionaire's Gold Coast home to “Gary’s dream of a hotel and catering facility.”

“It’s proved its resilience,” Hughes said.

He added that the castle has been a reliable resource for the Huntington community because of Melius’ open-door policy.

“Gary’s been running tours, hosting events, the restaurant is open to everyone; there’s plenty of opportunities for people to go and experience the grandeur of Oheka, and I hope that continues,” Hughes said.

Why is the castle up for auction?

Last year, Kahn Property Owner LLC filed for federal Chapter 11 bankruptcy protection to hold off a foreclosure sale. The last-ditch effort came after years of promises, missed opportunities and lawsuits. Melius said at the time the castle had been in foreclosure for a decade.

Court documents show Melius owes about $60 million to a secured creditor, and between $8 million and $10 million to unsecured creditors and for professional fees.

Following a court order to put the castle up for auction, Melius told Newsday last month: “My debt is too heavy; I can’t carry it; I don’t have a choice."

The prospect of building condominiums on part of the site had been key to Melius' plan to hold on to Oheka. Over the years, several plans fell through, with Melius falling deeper into debt.

In 2023, Melius was approved by the Huntington Town Board to construct a four-story building featuring 95 condominium units, but that plan has stalled.

Where is the auction?

It will take place at The Dominick Hotel on Spring Street in Manhattan. It's not open to the public.

What's likely to happen there?

Chad Roffers, CEO and co-founder of Concierge Auctions, confirmed there are seven registered bidders. They emerged from a group of 700 interested parties worldwide. 

“It’s fair to expect we’re going to have a competitive auction," he said. "We have a very qualified field.”

Roffers told Newsday that there are three types of bidders likely: developers, hospitality experts and “ultra-high-wealth" property collectors.

Information about the winning bid — who made it and for how much — won't be immediately announced to the public, he said. Those details will be filed with the bankruptcy court Thursday. 

Prospective bidders must meet certain requirements. For example, they must put down a $750,000 refundable deposit in escrow and show they have the ability to close in 30 days.

How much could the castle fetch?

Newsday earlier reported that it's not easy to gauge the market value, according to experts, because there's no comparable properties on the Island.

Roffers said every auction is different and wouldn't speculate. But he said the unique aspect of the property draws attention. “It’s a rare property, and this property in our lifetime may never be offered for sale again," he said.

Newsday reported that last spring, a Mineola-based appraisal firm put its value at about $137 million, according to federal court filings.

At a court hearing Thursday, the bankruptcy judge ruled that the biggest secured creditor, 135 W. Gate Drive LLC, can use a credit up to $61 million to go toward the purchase of Oheka at auction.

What's next for the castle?

Bram Weber, an attorney with the Weber Law Group in Melville, said whoever buys it will have work to do, considering angst from the community over prospects of a new owner and condominiums.

The auction house website notes that a developer can build residences over 5 acres on the property's southeast corner.

“Whoever buys this is going to have to build that relationship and trust with the community, convince the town that they are going to build what the town expects to be built ... and be able to bring all those stakeholders together,” he said.

Hughes, the Huntington historian, said: “I hope whoever gets it keeps it open in some way, the way it is now.”

What about future weddings at the castle?

Whoever buys the castle will have to honor weddings booked through March 31, 2028, according to court documents.