Oheka Castle auction update: Seven parties registered to bid Tuesday

Seven parties are registered to bid Tuesday for Oheka Castle, the head of the auction house said Monday, as Gary Melius' four-decade tenure running the landmark estate comes to an end.

The iconic Gold Coast property and catering venue goes on the auction block to settle tens of millions of dollars of debt amassed over a decade. The auction of the property, development rights and hospitality operations is set for Tuesday at 10 a.m. at The Dominick Hotel in lower Manhattan.

“We have seven registered bidders,” Chad Roffers, CEO and co-founder of Concierge Auctions, which will be overseeing the auction, told Newsday.

Melius couldn't be reached for comment Monday.

Melius bought Oheka, in the Cold Spring Hills neighborhood of Huntington, in 1984 and serves as operator. He has an ownership stake in Kahn Property Owner LLC.

Last year, Kahn Property Owner LLC filed for federal Chapter 11 bankruptcy protection to hold off a foreclosure sale. The LLC is the entity that owns the property. Melius said at the time the castle had been in foreclosure for 10 years.

Roffers said that after a global campaign by Concierge Auctions to market the property, there were inquiries from 700 qualified parties worldwide. He said his company engaged in “substantive conversations” with more than 100 prospects, and seven emerged from the pool.

“We’re going to have a very transparent and I suspect spirited and competitive auction,” he said.

The auction is closed to the public. Roffers said the winning bidder’s name will not be announced Tuesday as sale confirmation proceedings need to be completed. He said the bankruptcy court will be updated on the amount of the winning bid and the name of the new owner on Thursday.

“We want to keep the focus on allowing those parties to bid in a competitive, transparent way but without any unnecessary distractions,” he said.

In addition to a $750,000 refundable deposit to get a bidder’s paddle, interested parties also needed to provide a bid form and proof of funds, Roffers said.

There’s no chance additional bidders will be added at the last minute, Roffers said. The deadline was Friday, and “everyone knew that from the onset,” he said.

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

At least two plans by Melius to build condominiums on the site have stalled.

Roffers said there are three categories of buyers who are likely to bid: a hospitality-centric buyer, a developer, and an “ultra-high-net-worth property collector.”

Those approved to bid on Oheka are an “interesting mix of all three,” he said. “What’s interesting about this field is that the bidders are all well-qualified.”