Long Island’s 127-room Oheka Castle heads to auction with $63.5m debt

Oheka Castle, the largest residence on Long Island, will go up for auction on 27 October. The 112,895 sq. ft. French Renaissance-style château, designed in 1919, is a real-life Gatsby estate.

The 127-room mansion carries more than $63.5 million in debt. The next owner will also inherit land that the town has already approved for housing.

Prospective buyers must pony up $750,000 just to have a chance at the property, with the deposit going towards the winning bidder’s purchase price. The auction, organised by Concierge Auctions, follows owner Gary Melius’s Chapter 11 bankruptcy filing after the estate struggled to meet its financial obligations, according to a report by The Post.

A house built for big parties

In 1919, Delano and Aldrich, one of the Gold Coast’s premier mansion-building firms, designed the château. It was built for Otto Hermann Kahn, a financier and patron of the arts. Kahn used to host lavish Jazz Age parties for royalty and celebrities. His dinners were famous for their size. Some drew 50 guests or more, and each guest had a personal valet. The parties could run for days. From Hollywood stars to opera singers and European aristocrats, many famous people came through the doors.

Oheka Castle is the second-largest private residence ever built in America, according to the listing. According to the outlet, Oheka ranked as the biggest estate along the Gold Coast, surpassing neighbouring properties owned by the Vanderbilts and the Morgans by tens of thousands of square feet. The house still retains its grand appearance. It has 127 rooms, 34 guest suites, a 2,300-square-foot ballroom and formal French gardens with nine reflecting pools.

It is no surprise that the mansion looks familiar when you see pictures of it. You have seen it before. It has served as the backdrop for Citizen Kane, Royal Pains and Succession. Taylor Swift filmed Blank Space here. The auction house said the estate was straight out of a fantasy film. “Few addresses on earth carry the glamour of OHEKA CASTLE, a real-life Gatsby estate, crowning the highest point on Long Island’s storied Gold Coast in Cold Spring Harbor.

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Bankruptcy forces it to change hands

Gary Melius, a local developer, bought the property in 1984. He spent years bringing it back to life. According to the auction house, $40 million was spent on the restoration. “Forty years here, $50 million in, and now nothing,” the 81-year-old Melius told the outlet. He put a great deal of money into the house, but it never caught up with the bills. Melius filed for Chapter 11 bankruptcy in July 2025. The filing showed debts exceeding $63.5 million.

Because he could not pay off those balances, the court approved a public auction.

The castle, however, still earns its keep. It continues to operate as a hotel and event venue, hosting more than 200 private events each year. Couples who booked their weddings there are now waiting to see who will own the property. Many exchanged their wedding vows on those grounds, including Kevin Jonas, Anthony Weiner and Huma Abedin.

The venue’s appeal has never depended on a single owner.

The condos come with the land

The estate also comes with development potential. The Town of Huntington has approved 95 luxury condominiums on 5.13 acres of the property. The listing describes the development as “poised to transcend the estate into the 21st century with the ultimate in luxury and amenities for a select clientele; combined with OHEKA CASTLE’s robust weddings, events, and catering business, positions the property to become the envy of the United States”.

That approval gives a buyer a head start on new development. A buyer does not need to start the approval process from scratch. According to The Post, the project could bring in millions of dollars a year once built.

According to the publication, Taconic Capital is the frontrunner. The hedge fund holds the mansion’s defaulted mortgage, giving it a way to bid without starting from scratch. Taconic also owns a 13.3-acre site next door, which it bought last December, according to the paper.Interestingly, the auction has no starting bid. That is unusual for a property of this size and means the price will depend entirely on who shows up on 27 October.The property is listed by Adam Modlin of The Modlin Group.