Under the proposed deal, $20 million in improvements would be made to the Huntington, N.Y., golf course, and Oheka Castle would be transformed into its clubhouse. Nicklaus said his group is “not buying” the property, but is involved in the project, which was unanimously approved by the club’s board.
Oheka Castle owner Gary Melius and the board of the Cold Spring Country Club in Huntington, N.Y., are in talks to turn over the estate and golf course to Jack Nicklaus and developer Stanley Gale in a 99-year lease, the Melville, N.Y.-based Newsday reported.
According to a letter sent to members of the club, the proposed deal would include $20 million in improvements to the golf course and would transform Oheka Castle into its clubhouse. If the deal closes, it could bail out Melius’ cash-strapped ownership of the historic castle, Newsday reported.
Nicklaus confirmed his group is “not buying it,” but is involved in the Oheka golf project. He said his company will treat the existing Cold Spring golf course “like a raw piece of property,” Newsday reported.
The real estate deal is being handled by Daniel Gale Sotheby’s International Realty. Citing “confidentiality agreements,” Patricia Petersen, president and chief executive of the real estate firm, which is based in Cold Spring Harbor, declined to comment to Newsday.
In a letter to its roughly 150 equity members, club President Marvin Adler wrote that the club’s board unanimously approved the terms of the deal outlined in a March 25, 2015 letter of intent from the Nicklaus-Gale Group. Adler’s letter also notes that while a contract still needs to be drafted, the board had agreed on some key details of the land deal, Newsday reported.
The equity members, who own shares in the club and have voting rights, stand to receive payments totaling $150,000 each if the new club opens, according to the letter.
Howard Stein, an attorney representing the club, confirmed that an agreement was in the works. “It’s an exciting deal, and it is being negotiated,” Stein said. “I can’t really discuss specifics at this time.”
Under the deal outlined in the letter, Nicklaus’ golf course company, Nicklaus Design, would completely redesign the course. The letter does not spell out many key details of the proposed project, including when the deal could be closed. Huntington Town spokesman A.J. Carter declined to answer questions, such as whether the town board will need to approve a final plan, Newsday reported.
Oheka Castle, where Melius lives and which he operates as a hotel and wedding destination, would be a clubhouse where locker rooms, dining facilities and a pro shop would be located. The club’s existing clubhouse will be referred to as “Oheka Lodge,” Newsday reported.
Melius would not disclose details of the agreement, including whether he would continue to live at the castle. “I’m not ready to discuss that at this point,” Melius said.
Melius purchased Oheka Castle for $1.45 million more than 30 years ago, and the estate has since been appraised for as much as $43.8 million, according to Trepp LLC, a Manhattan-based company that tracks commercial mortgages. Melius has struggled to keep Oheka afloat in recent years. He defaulted on the property’s $27.9 million mortgage in 2013, Trepp reported. He negotiated a modification of the loan the next year and received a five-year reprieve, Newsday reported.
The Huntington Town Board approved a March 2012 zoning change that would allow 190 condominiums to be built at Oheka. Under the new deal, according to the letter to the country club members, the condo project will still be built but will be associated with “the Nicklaus brand.”
The property is within walking distance of the Cold Spring Harbor Long Island Rail Road station, it offers easy access to Republic Airport in East Farmingdale and it is situated roughly halfway between Manhattan and the Hamptons, making it attractive to affluent buyers, said David Pennetta, a Melville-based executive director with Cushman & Wakefield. “This has just got such success written all over it,” he said.
Nicklaus’ associate, Scott Tolley, cautioned that the deal is not complete. “A lot has to happen,” Tolley said.