Oheka Castle Headed to Auction as Bankruptcy Expected to Bring Change in Ownership to Historic Long Island Estate

HUNTINGTON, NY – Oheka Castle, one of Long Island’s most prominent surviving Gold Coast estates, is scheduled to be offered at auction on October 27, 2026, as a federal bankruptcy case involving the historic Huntington property moves toward a potential change in ownership.

The scheduled auction represents the latest development in a long-running financial dispute that led Kahn Property Owner LLC, the entity that owns the Oheka property, to file for Chapter 11 bankruptcy protection on July 31, 2025.

Federal court records show the case remains active in the U.S. Bankruptcy Court for the Eastern District of New York before Judge Louis A. Scarcella. The bankruptcy petition placed both the company’s assets and liabilities within the $50 million to $100 million range.

On September 15, 2026, the Bankruptcy Court approved terms and conditions for a public auction of the debtor’s real property, development rights and certain other assets, with the auction scheduled for October 27. A hearing on approval of the sale is scheduled for October 29, according to the federal bankruptcy docket.

Longtime Oheka operator Gary Melius purchased the deteriorating estate in 1984 and has spent decades restoring and operating the property. If a sale is completed through the bankruptcy process, it could bring one of the most significant changes in Oheka’s modern history.

Oheka remains open for business while the bankruptcy proceedings continue. Its official website continues to offer hotel accommodations, weddings, events, dining and historic mansion tours.

Development Rights Could Play a Major Role

The future of Oheka involves more than the castle itself. Residential development has been contemplated around the estate for years, and those development rights are part of the property interests being offered through the bankruptcy sale.

More than a decade ago, Oheka and the neighboring Cold Spring Country Club pursued a proposal for as many as 190 luxury condominiums known as The Residences at Oheka Castle. The project received Town approval subject to conditions, but the joint development was never built after the parties became involved in a dispute.

A later proposal substantially reduced the size of the development. A 2023 Suffolk County Planning Commission report describes a proposed four-story, approximately 202,000-square-foot condominium building containing 95 units on the Oheka property. The plan also calls for parking and an on-site wastewater treatment system.

The Huntington Town Board approved the 95-unit proposal in 2023. The approval remains in effect, although the project has not completed the Planning Board site-plan process. A future owner would therefore still have to complete that process and obtain the necessary approvals before the condominium development could proceed.

The project has continued to move through the municipal planning process. Most recently, the Huntington Planning Board on August 19, 2026, granted another 90-day extension of filing time for The Residences at Oheka Castle, extending the filing deadline to November 23, 2026.

The development rights could represent a significant component of the property’s value at auction. What a future owner ultimately does with those rights, however, remains to be seen.

A Landmark of Long Island’s Gold Coast

Whatever happens in bankruptcy court, Oheka’s historical importance extends far beyond its present financial circumstances.

Financier and philanthropist Otto Hermann Kahn developed the estate during Long Island’s Gold Coast era. According to the National Park Service, Kahn’s estate occupied a 443-acre property at one of Long Island’s highest points and cost approximately $11 million to construct.

The name Oheka was formed from the first letters of Otto Hermann Kahn.

The mansion was designed by the architectural firm Delano & Aldrich, while the Olmsted Brothers designed the estate’s landscape. The formal grounds included fountains, reflecting pools, statues and tree-lined paths. The original property also contained greenhouses, tennis courts, an indoor swimming pool, orchards and stables, according to the National Park Service.

According to Oheka Castle’s history, construction began in 1914 and the mansion was completed in 1917. The original residence encompassed approximately 109,000 square feet and 127 rooms, making it the second-largest private residence built in the United States, behind the Biltmore Estate in North Carolina.

The estate was added to the National Register of Historic Places in 2004. National Park Service records list Oheka in Cold Spring Hills and recognize the property as a historic resource associated with its distinctive architecture and landscape.

Oheka Nearly Disappeared Before

The castle has already survived a period when its future was deeply uncertain.

After Kahn died in 1934, Oheka passed through several owners and uses. According to Oheka’s historical records, the property became a retreat for New York City sanitation workers, served as a training school for Merchant Marine radio operators during World War II and later became home to the Eastern Military Academy.

The Eastern Military Academy occupied Oheka from 1948 until 1979. After the school closed, the castle was abandoned and fell into severe disrepair, suffering from vandalism and fires.

In 1984, developer Gary Melius purchased the badly deteriorated mansion and its remaining 22 acres for approximately $1.5 million, according to Oheka’s published history. At the time, the property lacked functioning electricity and plumbing and had been stripped of its windows and doors.

An extensive restoration followed.

According to Oheka Castle, approximately $40 million has been invested in restoration. Architects, historians and other specialists worked to recreate original details, including the slate roof, windows and doors, ornamental plasterwork, wrought-iron features and portions of the formal gardens.

The restored property eventually developed into the hotel, restaurant, wedding venue and event destination operating today.

From Citizen Kane to Modern Television

Oheka’s distinctive architecture has also given the estate a place in American popular culture.

The castle appeared as Xanadu in the opening montage of Orson Welles’ 1941 film Citizen Kane. Oheka has since been used for numerous film, television, music video and photography productions, according to Oheka Castle’s production history.

More recent productions filmed at or associated with the property include Royal Pains and Succession. Oheka was also prominently featured in Taylor Swift’s Blank Space music video.

The estate’s continuing hospitality business includes 34 guestrooms and suites, according to Oheka Castle’s official website, in addition to weddings, private events, mansion tours and the OHK Bar & Restaurant.

---

Key Facts & Details

Fact	Details
Property	OHEKA Castle
Location	135 West Gate Drive, Huntington, New York
Scheduled Auction	October 27, 2026
Sale Approval Hearing	October 29, 2026
Property Owner	Kahn Property Owner LLC
Longtime Operator	Gary Melius
Bankruptcy Filing	July 31, 2025
Bankruptcy	Chapter 11
Court	U.S. Bankruptcy Court for the Eastern District of New York
Condominium Proposal	95 residential units; Town Board approval remains in effect, with Planning Board site-plan review still required
Original Estate	Approximately 443 acres
Original Mansion	Approximately 109,000 square feet and 127 rooms
Construction	Began in 1914; mansion completed in 1917
Historic Designation	National Register of Historic Places, 2004
Current Operations	Hotel, weddings, events, dining and historic mansion tours

More than 40 years after Gary Melius purchased a badly deteriorated Oheka Castle and began restoring the Gold Coast landmark, the property is approaching another potentially transformative moment. The scheduled October 27 auction could usher in new ownership of a mansion that has survived changing uses, abandonment, restoration and decades of redevelopment proposals. Until the bankruptcy sale and subsequent court proceedings are completed, however, Oheka remains open and its next chapter remains unsettled.