L
uxury developer Harry Macklowe has significantly reduced the price of his Hamptons home to $32.5 million, down from its initial $38 million asking price last March. However, despite its luxurious features and prime location by Georgica Pond, the four-bedroom, five-bathroom property still lacks a certificate of occupancy (C of O), making it uninhabitable for potential buyers.

    The C of O was issued in 1987, but Macklowe renovated the house without permits, rendering the existing document invalid. "If you went with that old C of O to match up the house to the way it is now, you wouldn't be able to match it because it's not the same house," said a broker familiar with the deal.

    Macklowe declined to comment on the situation, but insiders estimate the home's true value at $10 million to $15 million, citing damage done to the wetlands and unpaid fines. The developer is reportedly using the sale of the East Hampton home to pay off some of his $89.5 million debt to a lender.

    Macklowe is also in default on this debt and has sued Israel Discount Bank of New York to stop it from collecting assets he pledged as collateral. However, an insider claims that the assets are worth closer to $12 million, not the $20 million Macklowe claimed.

    The 5,500-square-foot home sits on 2.71 acres and features an art-filled interior with a lovely beachy vibe. Despite its luxurious features, the property's lack of C of O and history of building code violations have raised concerns among brokers and officials.

    Macklowe has been involved in several high-profile controversies, including hiring a mob-run company to blow up buildings on West 44th Street without permits in 1985. He paid a $2 million fine but escaped indictment and jail time due to lack of evidence of criminal intent.