Developers buy Oheka Castle for $72 million at auction

The new owners of Huntington’s iconic Oheka Castle are two developers who “love the castle” and are ready to take the Gold Coast mansion into “its next chapter”, their lawyer said on Tuesday.

The winning bid of $72 million came from Gold Coast Property & Estate Management LLC, a newly formed company led by principals Ronald Browning and Paul Alflen, said attorney Brian Gardner, the group’s attorney.

The company outbid six other entities Tuesday at an auction at a Manhattan hotel.

“They are excited to have the opportunity to preserve the castle and take over its management,” Gardner said in an interview. Browning and Alflen will maintain Oheka’s current operations “and oversee its next chapter, which will include the development of portions of the property that will not interfere with the castle or its grounds.”

The pending owners intend to move forward with the development “in accordance with prior approvals,” Gardner said.

The successful bidder is entitled to development rights for up to 95 condominium units on the property.

Gardner noted that Alflen is originally from Long Island and has been to the castle “hundreds of times.”

“Both love the castle,” Gardner said.

Reached by phone, Alflen confirmed he was part of the winning bid and directed his questions to Gardner. He said his background was in “hospitality and development”.

The iconic Huntington Town mansion was sold Tuesday morning in an auction conducted by Concierge Auctions. The winning bid is expected to be confirmed at a hearing Thursday in federal bankruptcy court.

Seven unidentified entities had registered to participate in the private auction.

Oheka’s owner, Kahn Property Owner LLC, filed for federal Chapter 11 bankruptcy protection last year to delay a foreclosure sale. Energy broker and developer Gary Melius, a co-owner of Oheka who lives at the castle, said at the time that the castle had been in foreclosure for a decade.

Court documents show Melius, 82, owes about $60 million to a secured creditor, and between $8 million and $10 million to unsecured creditors and professional fees.

Melius: “It’s just going to get better”

Melius told Newsday he was relieved by the sale and that it was enough to clear his debts.

Without naming the potential new owners, he described them as “very, very nice people.” He said Oheka will continue operating as usual under the new ownership, which includes continuing holiday events like the annual Easter egg hunt for neighborhood children.

“Nothing, no change. It’s just going to get better,” Melius said. “I am happy, my neighbors will be happy… and we will all move forward together.”

Melius said he will also continue to live in Oheka and manage operations there, even after the company changes hands. There was no immediate confirmation of the developers’ plans or whether Melius would continue to live in Oheka.

The auction, at the Dominick Hotel on Spring Street in Manhattan, began at 10 a.m. and lasted about 90 minutes, said Chad Roffers, CEO of Concierge Auctions. It was not open to the public.

“When we started this process, three to five bidders was a realistic goal, so having seven qualified and committed bidders was really positive,” Roffers told Newsday.

In the neighborhood: tempered optimism

The terms of the deal assuaged some concerns of Castle neighbors such as Gayle Snyder, a longtime skeptic of Oheka’s sale and who heads the Cold Spring Hills Civic Association.

Snyder told Newsday she was “absolutely thrilled” that Melius would remain involved with Oheka, saying her policy of making the castle accessible to the neighborhood for things like children’s holiday events would continue.

“Gary always thought the castle should be shared,” she said. “We were very worried about who would buy it, (because they) might lock it up.”

Snyder added that “I hope whoever the buyer is keeps their word – we’ll see.”

The civic leader said neighborhood concerns persist over new housing planned for the Oheka property. She explained that nearby residents would prefer that no housing be built there, but that condo development rights already exist on that land.

A rare “trophy” property

An appraisal prepared last year as part of bankruptcy proceedings pegged the castle’s value at $137 million, including condominium development rights.

On its website, Concierge Auctions touted Oheka as “one of the rarest trophy properties in the country.”

For the past four decades, it has been a luxury hotel dining hub – a popular spot for celebrity weddings, proms and parties of all kinds, as well as lavish political fundraisers and poker games attracting top elected officials and law enforcement officials.

In previous years, it was a training school for radio operators during World War II, a retreat for New York City sanitation workers, and a military academy.

The castle was built between 1914 and 1919: a 127-room estate on 443 acres. The current setup includes a restaurant, catering hall and hotel with 34 rooms and suites, all on 21 acres, just north of Jericho Turnpike and adjacent to the Cold Spring Country Club.

Oheka’s towering spiers, bathed in shadows and accompanied by eerie music, set the tone in the opening scenes of Orson Welles’ 1941 classic “Citizen Kane.”

It was built as a summer home for investment banker Otto H. Kahn, who named it using a play on words with his initials.

Melius purchased the property in 1984 and transformed it into an opulent dining venue. He was shot and wounded there in broad daylight in 2014 in a case that remains unsolved.