Sep. 14—ROCHESTER — The saga of the iconic Michaels restaurant location has seen many twists, turns and feuds over the past decade. Despite grand visions, plywood now covers the space where Michaels’ imported bronze doors once swung open to diners. As the buildings decay, the plan for their future remains vague.
The neglected site at South Broadway and Center Street came under discussion this week at the Rochester City Council when an early version of a development plan was unveiled. The plan includes a 14-story building with retail and office space that connects to the adjacent Galleria at University Square Mall, as well as nine floors of student housing and a skyway connection to the Hilton Hotel across Broadway.
The Chafoulias family’s Titan Development & Investments created the development plan as BGD5 Development LLC. Titan also owns the Galleria and the Hilton hotel. However, Titan does not own all of the parcels that made up the Michaels restaurant, which spanned five contiguous buildings.
PRE Holdings, which stands for Pappas Real Estate, owns the building at 9 Broadway on the north side of the site, as well as the above-ground parking lot beneath the city parking ramp. That mixed ownership is one reason the complex site has remained unchanged for so long.
Titan, led by Andy Chafoulias, asked the city for a two-year “Exclusive Negotiating Rights Agreement” for the development to be built on the four lots. The request caused some confusion among council members, who clarified that the agreement did not give the city any access or rights it did not already have to the lot.
“This is a little bit weird to me. He doesn’t need exclusive rights. He already owns it exclusively,” said Councilman Patrick Keane. “This site has been sitting around for years and now that we’re starting Unbound, we have this new thing to think about when we have all this priority work for the next two years.”
Deputy City Manager Cindy Steinhauser responded that the agreement would move the development forward.
“I think it helps us and the developer in terms of the seriousness of our expectations of the timing of how we want to see this project move forward,” she said. “It’s an effective tool to keep us marching forward toward a development agreement rather than something where neither party has a clock ticking in terms of interest,” she said. “We could move forward (without the agreement), but I think it sends a good signal to us and the developer that we’re moving forward in a formal way.”
The agreement opens the door for future collaboration with the city on parking, the skybridge and receiving support in the form of tax credits or financial assistance from the city and Destination Medical Center management.
Councilman Norman Wahl echoed Keane’s confusion, though he supported the agreement.
Ultimately, the City Council, which acts as the city’s economic development authority, voted 5-2 in favor of the agreement, with Keane and Molly Dennis voting against.
The agreement contains no reference to PRE Holdings. When Councillor Shaun Palmer asked if neighbours had been consulted about the agreement, City Manager Alison Zelms said no.
“That’s a private matter. They’re not part of this,” she said.
Tom Hexum, a commercial real estate agent representing the Pappas family, declined to comment on the City Council’s decision to approve the deal with Titan.
The discussion about this striking location got the council members thinking about what they would like to see in a future development at this location.
“I was super excited when I saw this. This has been a potential project my whole term,” said Council President Brooke Carlson. “If there could be a grocery store … if there could be child care … these are the things I would be excited about.”
When asked outside the meeting whether the city had talked to other developers about that area, Strategic Initiatives Director Josh Johnsen acknowledged that it had. He said the conversations took place more than a year ago.
“There was a developer who showed interest,” he said, adding that the developer appeared to be primarily looking at the initial steps of amassing property in the city center. “The city has not received or seen any proposals. The only active development negotiations we have been working on for the former Michaels site are with Titan.”
Despite Steinhauser’s reference to the ticking clock, no timeline was given during the council meeting for the site’s demolition or development. When asked about timing outside the meeting, Titan Director of PR & Marketing Michelle Milde said plans are still fluid.
“We really can’t make a formal commitment to the timeline for demolition or anything like that. In terms of Titan’s overall expectations for the project, it’s really what it’s always been. That is for Titan to continue to be an active participant in improving downtown Rochester to create a complete experience for our visitors and our locals,” she said.
This saga began and ended on New Year’s Eve.
Michaels, a beloved fixture in downtown Rochester for 63 years, closed its massive doors for the final time on December 31, 2014, ending its role as Med City’s signature restaurant on South Broadway.
The closing was a traumatic experience for the Pappas family, who had run the classic restaurant since November 1951.
“It’s a tough business. My head is pounding … I can’t sleep, none of us can … and I’m wondering if this is the right thing to do,” said Michael Pappas, one of four managing partners at Michael’s restaurant, shortly after the plans to close were announced. He added that he and his uncle Charles Pappas always thought they would “stay here until they drag us out.”
In November 2014, Pappas said he believed his family’s decision to enter into a joint venture with the Chafoulias family’s Titan Development & Investments was a “great opportunity to be part of Destination Medical Center”
The development was described at that stage as a joint venture owned 50-50 by the Chafoulias and Pappas families. Under the name 15 South Broadway LLC, the joint venture group purchased four parcels from the Pappas family for $1.4 million on January 6, 2015. PRE Holdings separately took ownership of its parcel at 9 Broadway.
The original plan was to expand the adjacent Galleria Mall and build two floors of retail on the site, with the tower above containing a skyway that would intersect Broadway with Titan’s planned development, then called Broadway at Center, which later became the luxury Hilton Hotel. A new version of Michaels restaurant was part of that original plan.
Pappas said in November 2014 that he hoped to open a new Michaels restaurant in roughly the same location within 18 months, with dining options on two floors and a terrace overlooking the city, as part of the Titan project.
That didn’t happen. The only restaurant in the area still owned and operated by the Pappas family is Pappy’s Place in northwest Rochester.
The joint venture aspect of the project between the two families changed when Titan brought in Illinois-based Harbor Bay Real Estate Advisors, led by the Bell family. Harbor Bay paid $5.5 million to the Chafoulias/Pappas joint venture in August 2016. That was nearly four times what the 15 South Broadway LLC group paid for the four parcels in 2015.
A question was asked about the decision to sell the buildings to an outside developer.
“There are many family members on both sides and they felt it was a very fair price and chose to sell the property rather than develop it further,” Sheila Thoma, then a spokeswoman for the Chafoulias family, wrote after the sale.
No member of the Pappas family was available for comment at the time.
In 2017, “high-level concept” plans surfaced for a 30-story tower to be built on the site, with Titan listed as a co-developer with Harbor Bay.
“The concept so far includes a 30-story residential tower with 255 units, a 16-story hotel with 153 rooms and 61,452 net feet of retail connected to the existing retail at University Square,” then-City Manager Stevan Kvenvold wrote in a memo to board members and city staff from Destination Medical Center Corp. “If the proposed project proceeds, the current parking lot on West Center Street would need to be removed.”
In 2021, Andy Chafoulias said in an interview that he was still determined to do business in Rochester and develop downtown, as his father did. He speculated that there was room for an urban grocery store and perhaps a pharmacy downtown.
“Before the pandemic, we had a vibrant, incredible downtown. It’s my personal mission to make it vibrant again. And that’s why I’ve invested millions of dollars,” he said in 2021. “I don’t think things are moving as fast as they should because we don’t have time to sit and think. We don’t have time for more studies.”
Meanwhile, there was no change at the site. Harbor Bay pulled out of the project in 2022. Titan’s BGD5 Development purchased Harbor Bay’s four lots for $5 million on February 1, 2022.
Chafoulias described the change as a “reshuffle.”
“We (Titan and Harbor Bay) get along really well. I’m probably a little bit more optimistic about Rochester than a lot of people,” he said in 2022. “I call it kind of a reshuffling of the cards and doing what’s right for the partnership and for us as friends. The Bells have other projects they’re working on in different parts of the country. I said, ‘You know what, this is our home base. I’m buying you out.’
In 2022, Titan filed for a permit to demolish the four buildings: 11, 13, 15 and 17 Broadway S. Titan later filed for a permit to also demolish the fifth building: 9 Broadway, which is owned by PRE Holdings.
Hexum then explained that the demolition permit was given the green light with the expectation that Titan would sign a contract to handle insurance and liability related to the demolition. Hexum said that did not happen.
The Pappas family eventually decided to block the demolition of their portion of the estate. After a discussion of the situation, a letter signed by Don, George, and Jim Pappas was sent to Titan.
“The group of owners reviewed your proposal. The consensus was to not proceed with the demolition at this time. The owners of the property would like to enter into an agreement with you to purchase the entire property,” the letter reads. “PRE believes that the unification of the two properties is more appropriate for the Heart of the City theme and scale. The demolition should be done at the discretion of the purchaser and the planning of such a project.”
Aside from some demolition and renovation of the PRE Holdings building, the location has been quiet for the past two years. As the 10th anniversary of Michaels’ closing approaches, questions remain about when the buildings will be demolished, what will be built, and what the legacy of the historic restaurant will be.
