Many Long Island business deals are done at country clubs between swings and keeping score, but an important deal recently wasn’t done simply by executives strolling and playing golf at a club, but by the club itself.
An affiliate of a Park Avenue-based real estate investment firm reportedly has acquired 14 acres from the Cold Spring Country Club, adjacent to Oheka Castle, in the latest chapter of that famed piece of real estate’s history.
Taconic Capital paid $13.3 million for the 14-acre property from Cold Spring Country Club, potentially reviving a condominium development plan.
The land was originally part of the Oheka property, a French-style chateau now a hotel and restaurant that is seeking to emerge from bankruptcy. “That’s the country club,” Oheka owner Gary Melius said in a phone call regarding the land and the deal. “I have nothing to do with it.”
The sale of the land could revive long-stalled plans to develop condominiums on the property under new ownership.
Taconic was founded in 1999 by former Goldman Sachs partners Frank Brosens and Ken Brody. The company manages about $7 billion in assets with offices in New York and London and more than 100 employees worldwide. Mike Geller, who answered requests for information on Taconic’s behalf, said they have no comment.
“We specialize in finding opportunity in market complexity, dislocation, and inefficiency,” the company says on its website.
Certilman Balin Adler & Hyman, in a post, confirmed that Chair and Real Estate Practice Group Co-Chair Howard Stein represented the Cold Spring Country Club in “discussions related to Taconic Capital’s recent acquisition of the land near Oheka Castle.”
Cold Spring Country Club, founded in 1947, dates back to 1919 when Otto Kahn commissioned Seth Raynor to design the golf course. “The course, castle, and adjoining property were the second largest estate in America at the time,” according to the Cold Spring Country Club, which operates the 71-par course.
The club online describes itself as “a hidden jewel on Long Island’s historic Gold Coast.” “For 70 years, we have offered our members a spectacular private country club experience, and we are proud of our premier golf course and dynamic tennis program,” according to the Cold Spring Country Club online.
The sale of a small chunk of the golf course’s land, potentially clearing the way for new condominiums on that parcel, is the latest development on the land once part of Oheka Castle, which itself recently filed for Chapter 11 reorganization.
In its petition filed July 31, Kahn Property Owner, the name of the entity that owns Oheka, lists $63 million of debt, including $50 million from the mortgage (although Melius contests the amount) against $92.8 million of assets.
Taconic Capital, through 135 W. Gate Drive LLC, bought the defaulted mortgage note for around $25 million in June 2023, David Winzelberg reported in Long Island Business News.
In its initial Chapter 11 filings, Kahn Property Owner LLC stated that Oheka Castle and Resort has faced foreclosure efforts since 2019, which have complicated efforts to preserve the property.
“The Debtor believes that with the protections of this Court and the Bankruptcy Code, it will be able to protect its remaining assets, maximize value of the estate for creditors, and propose a meaningful, feasible and confirmable plan of reorganization,” Melius said in the filing.
Melius in the filing told a brief story of how he has sought to restore the structure to its former glory. “I purchased the property in 1984 when it was an abandoned shell of a building. Since that time, it has been a labor of love of mine and I have literally put my blood, sweat and tears into restoring and improving the Property,” Melius said in the filing. “From the beginning, I created a beautiful destination venue that provides luxurious scenery, quiet appeal, and an actual feel of a castle; it is a premier wedding destination.”
He in the filing said he “has lucrative development rights and substantial equity in the Property” and has “been developing relationships with third parties to consummate a deal, but is being hampered continuously by the foreclosure action.”
“The equity in the property should be more than sufficient to deal with the note buyer’s disputed claim,” he wrote.
AInvest called Melius’ Chapter 11 filing “a calculated move to delay Taconic Capital’s foreclosure and buy time for a value-maximizing reorganization.” AInvest said Melius has leveraged the bankruptcy process to preserve the castle’s “operational revenue streams” such as weddings, events, and overnight stays.
Oheka Castle, also known as the Otto Kahn Estate, derives its name from the first letters of Otto Hermann Kahn, with “Oheka” also serving as the name of his Palm Beach home and yacht. Oheka Castle reportedly inspired at least part of F. Scott Fitzgerald’s Gatsby estate and was used to depict Xanadu in Citizen Kane.
In 1984, Melius bought Oheka, which he later sold to businessman Hideki Yokoi, reportedly for $22.5 million. He then acquired a lease and subsequently purchased the property outright.
The castle was reborn as a 34-room hotel, which also operates a bar and restaurant, and offers mansion tours of the estate and gardens. Oheka, which was listed on the National Register of Historic Places in 2004, has been the site of many high-profile weddings and events.
