The 13.25-acre parcel in Cold Spring Harbor, N.Y. was earmarked for a controversial condominium project that was supposed to be taken over by a partnership that included Jack Nicklaus, but has been caught up in legal challenges. The club and its Seth Raynor-designed golf course is on a property that includes the Oheka Castle, an historic hotel and prestigious wedding/event venue.
A 13.25-acre parcel owned by the Cold Spring Country Club in Cold Spring Harbor, N.Y., that had been earmarked for 190 condominiums and embroiled in legal challenges is now up for sale, the Long Island Business News reported.
The land had been part of a plan to build the condo community between the club and Oheka Castle, an historic hotel and prestigious wedding/event venue that is listed on the National Register of Historic Places. About nine acres of the Oheka property would be used for the project, Long Island Business News reported.
Cold Spring Country Club’s history dates to 1919, when Otto Kahn, a financier and patron of the arts, commissioned Seth Raynor to design a golf course on over 170 acres of rolling wooded terrain that circles around the castle that he had built as a palatial country residence. At the time, the course, castle and adjoining property comprised the second largest private estate in America.
The 109,000-sq.-ft. castle was abandoned and crumbling by the early 1980s, Long Island Business News reported, and Gary Melius took ownership in 1984.
In 2016, the condominium project was supposed to be taken over by a partnership headed by golf legend Jack Nicklaus and developer Stanley Gale, Long Island Business News reported. But the deal fell apart after Melius was hit with foreclosure proceedings on the castle property.
Melius, who’s been fighting the foreclosure action in court, told Long Island Business News that Cold Spring CC or any prospective buyer of the property would have difficulty in developing the condos without his approval.
“They’d have to go back and make a new application and do another subdivision,” Melius said. “They can’t do anything without me.”
The initial deal, which had been approved by the club’s membership, would have Nicklaus’ golf course architecture firm redesign the Cold Spring course and turn the Oheka Castle into its clubhouse, Long Island Business News reported. In addition, Gale’s firm, Gale International, was going to develop the 190-condo project that Melius had already received approvals for from the Town of Huntington, N.Y. in 2012.
Gale is the grandson of Kent Gale, who founded the Daniel Gale real estate brokerage, which was going to be involved in selling the condos had they been developed.
Melius wanted to buy the entire club property for about $90 million 12 years ago, Long Island Business News reported, but that deal never came to fruition. In 2008, the publication first reported that Melius had pitched the proposed 22-acre condo development that would include 13 acres of the 168-acre country club and 9 acres of castle property.
Miami Beach, Fla.-based LNR Partners began foreclosure proceedings in June 2016 on the 23-acre Oheka property, Long Island Business News reported, claiming that Melius had defaulted on two commercial mortgage-backed securities loans totaling more than $29.79 million. The foreclosure lawsuit filed by LNR asserted that Melius failed to keep up with payments required by the loans’ cash management agreement, specifically charging that Melius paid only a portion of the $3.1 million annual “base lease” rent that was supposed to be paid into an escrow account. LNR also contended that Melius stopped making any payments, including required monthly debt service, after November 2015.
In a countersuit filed by Melius’ attorney Michael Alpert in August 2016 in Suffolk County (N.Y.) Supreme Court, Long Island Business News reported, Melius claimed that LNR failed to engage in good-faith discussions on a possible loan workout agreement, because the special servicer wanted to complete the development deal with Gale and Nicklaus.
Sources say Gale had separately contracted to buy the entire country club for about $65 million, but the purchase deal never advanced, Long Island Business News reported.
Cushman & Wakefield has now been appointed to market the club’s 13.25-acre parcel, Long Island Business News reported. Despite the potential legal entanglements, broker Andrew Merin, who leads the Cushman & Wakefield team that’s marketing the property, described the land as a “one-of-a-kind opportunity” for a high-end developer.
“This parcel offers a picturesque setting flanked by one of the area’s most well-known private country clubs and one of the world’s most prestigious wedding and event venues,” Merin said in a written statement. “We anticipate strong and immediate interest in this offering.”
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