A Suffolk judge has appointed a receiver to oversee the operations of Oheka Castle while the property is in foreclosure.
The Cold Spring Hills wedding venue, catering hall and hotel — once one of the largest private homes in the nation — has been the subject of foreclosure proceedings since June 2016, when U.S. Bank and LNR Partners of Miami, Florida, sued, claiming owner Gary Melius had fallen behind on his $3.1 million annual payments.
The lenders sought a receiver to oversee the property as the foreclosure proceedings dragged on and earlier this month state Supreme Court Justice Elizabeth Emerson agreed to do so. She appointed Jeffrey Kolessar, vice president of development at GF Management of Philadelphia, a company that runs hotels nationwide.
Kolessar and the attorney for the lenders did not respond to requests for comment.
The order allows Kolessar to "take immediate possession and full control" of the property and prevents Melius and his companies from exercising control of Oheka's finances. Melius is still allowed to run the companies, but must do so with the consent and approval of Kolessar. Melius and his companies also were ordered not to damage or remove equipment, furniture and other property from the premises.
Melius, however, insisted he was in full control of the operations and that the appointment of Kolessar changed nothing.
"There's nothing different at all. Zero," he said. "I'm in 100 percent [control] of everything . . . There is absolutely zero change in control. They just want to see what I'm doing."
He said he had "good rapport" with Kolessar and expected no problems.
Melius predicted he would prevail ultimately in the legal battle with his lenders.
"I'm going to win and do very well ... I'm not worried about the case at all," he said.
Kolessar's fee will be 2.5 percent of Oheka's gross revenues.
Earlier in the litigation, Melius accused LNR of trying to take control of the castle from him and take over his since-stalled plan to build 190 condominiums and a Jack Nicklaus-branded championship golf course on the grounds of Oheka and adjacent Cold Spring Country Club.
Melius bought the property in the 1984 and began restoring it but sold it in 1988 when he ran out of financing for the project. But when those owners ran into their own financial problems, Melius eventually bought it back, restored it and marketed it as a venue and boutique hotel. It's also been a meeting place for political elites from both Nassau and Suffolk counties.
The castle was built in 1921 by financer Otto Hermann Kahn. It takes its name from the initial letters of his name.