Is Oheka Castle worth $137 million? Why, experts say, an auction price is anyone's guess.

It's a Gold Coast mansion with spectacular views of Long Island Sound.

Surrounded by an 18-hole golf course, it played the fictional Xanadu in "Citizen Kane," appeared in a Taylor Swift music video and hosted the wedding of a Jonas brother.

One Long Island developer called it "one of the most beautiful properties on the Island."

But how do you determine the market value of an estate like Oheka Castle?

It won't be an easy calculation, experts in Long Island real estate and appraisals say.

An Oct. 27 auction in Manhattan ultimately will determine the worth of the 21-acre property owned by businessman Gary Melius in Huntington's Cold Spring Hills neighborhood, experts said.

In May, the Mineola appraisal firm Goodman Marks Associates valued the property at about $137 million, federal court filings show.

But until the auction, which includes rights to develop 95 potential condo units, the castle's value is anyone's guess. 

That's because there are no "comps" — comparable properties — anywhere on Long Island quite like Oheka, a 117-room, 115,000-square-foot French-style chateau that defies conventional categorization.

"When we walk up to these properties to appraise them, we call them 'why me properties,'" Jonathan Miller, president and CEO of Manhattan appraisal firm Miller Samuel, said in a phone interview. "This is very difficult to price."

'Stands apart from everything else'

Melius, 82, announced in September that he was putting the prestigious parcel, which includes a 34-room hotel and catering business, up for auction after years of trying unsuccessfully to pay off his debts, Newsday previously reported.

Kahn Property Owner LLC, the entity that owns Oheka Castle and in which Melius has an ownership stake, filed for federal Chapter 11 bankruptcy protection last year in a bid to hold off foreclosure.

Melius owes about $60 million to investment firm Taconic Capital and anywhere between $8 million and $10 million to unsecured creditors and for professional fees, Joseph S. Maniscalco, a lawyer for the LLC, has said.

When selling any property — even those without 22-step grand staircases, in-house bakeries and rooms dedicated to Charlie Chaplin — real estate professionals normally look to similar properties for guidance.

The trouble is, there are no other castles in Huntington or anywhere else on Long Island, real estate appraisers say.

"It’s extremely unique, even in the luxury market. It stands apart from everything else," Bay Shore broker Nicholas Campasano, a partner with Beverly Hills-based real estate brokerage The Agency, which has offices on Long Island, said in a phone interview. "You can’t compare 127-room, 100,000-square-foot castles with other properties. There’s really no comps for it."

Other marquee properties — like Hamptons mansions that sell for $100 million or William K. Vanderbilt's Idle Hour mansion in Oakdale, which sold for $26.1 million at auction as part of the defunct Dowling College in 2017 — don't apply because they are not hotels, experts said.

Condos' value

In addition to its storied history, Oheka has something else that could make it appealing to potential bidders: Huntington Town approval for up to 95 condominium units. 

The appraisal, prepared in May as part of bankruptcy proceedings, assessed the value of the mansion, covering 15 acres, at $92 million. The more than five acres set aside for condominium development were valued at $45 million.

The appraisal estimated the combined sales value of the 95 condos, when built, to be $320 million.

Oheka is likely to attract a small but diverse group of bidders, including national hospitality chains, real estate developers, private equity firms — and vanity buyers looking for the ultimate trophy property, real estate experts say.

"You need to cast a wide net," Campasano said. "Every single buyer in that net is going to look at it differently."

To arrive at a bid, developers will look to other high-end condo developments on Long Island, luxury real estate broker Enzo Morabito said. He pointed to the Ritz Carlton in North Hills, where condos are listed up to $2.95 million, and Southampton condos selling for $5 million.

"Are the [Oheka] units going to be worth $4 million each?" Morabito said in a phone interview. "That’s how developers are going to turn around and say, 'This is that I’m willing to bid.'"

Costs, development pushback

Another way to calculate Oheka's value would be to determine what it would cost to build it at today's prices for building materials, said Larry Clark, former director of strategic initiatives for the nonprofit International Association of Assessing Officers.

Melius spent $40 million to restore the castle with handcrafted wrought-iron railings, plaster moldings in the library and ballroom and Vermont slate roof tiles.

"With the cost approach, they would look to the cost of constructing or reconstructing" the property, said Clark, of Bonner Springs, Kansas. "And then take into account depreciation."

Ken Breslin, president of Breslin Realty Development Corp. in Garden City, called Oheka "one of the most beautiful properties on the Island" and said its location on the Suffolk-Nassau border makes it ideal for development.

"A real institutional player" would be most interested in the property, he said. But he added that such a buyer should consider partnering with a developer versed in Long Island's political landscape, given the region's history of development fights.

"If someone is not here and bred from Long Island, I don't think it would be well-received," Breslin said. "It's so sensitive. This community is as strong as any community on Long Island."

Oheka's uniqueness is a blessing and a curse, experts say. Its prestige will attract attention — but it could also limit potential bids.

"If there was heavy demand for this type of property ... then there would be other castle properties," Miller said. "I’m not saying they would be plentiful, but there wouldn’t just be one."

Newsday's Joseph Ostapiuk contributed to this story.