Former Michaels Restaurant site sold for $5 million as talks for future development begin
On Feb. 1, BGD5 Development LLC, a Titan Development & Investments company, purchased the amalgam of buildings that housed Michaels restaurant, at the corner of South Broadway and West Center Street. Rochester-based Titan is led by CEO Andy Chafoulias, who has long been working on a development to be built on that high-profile downtown site.
ROCHESTER — "Bullish” about the future of Rochester’s downtown, a Med City developer is now the primary owner of a long-closed legendary restaurant, following a $5 million transaction.
On Feb. 1, BGD5 Development LLC, a Titan Development & Investments company, purchased the amalgam of buildings that housed Michaels restaurant, at the corner of South Broadway and West Center Street.
Rochester-based Titan is led by CEO Andy Chafoulias, who has long been working on a development to be built on that high-profile downtown site.
BGD5 bought the four parcels — 11, 13, 15 and 17 South Broadway — from Harbor Bay Real Estate Advisors of Northbrook, Illinois on Feb. 1. Using a quit claim deed, the site is now owned by Titan and its affiliates.
Harbor Bay purchased the property in 2016 from 15 South Broadway LLC, which is a joint venture owned 50-50 by the Chafoulias and Pappas families. That group bought the property on Jan. 6, 2015 , from the Pappas family for $1.4 million, after the family closed Michaels on Jan. 31, 2014. Michaels had operated there for 63 years.
However, BGD5 does not own the parking lot property at 9 Broadway. That lot is owned by Pre Holdings LLC. Pre Holdings is managed by Barb Hexum. She is a member of the Pappas family, who is married to Rochester developer Tom Hexum.
Harbor Bay, led by the Bell family, partnered with the Titan to build the 20-story luxury Hilton hotel across Broadway from the Michaels site in 2019. Chafoulias said Titan and Harbor Bay are still partners on the Hilton hotel and they are working on other projects in the different cities.
“We get along great. I'm probably just a little more bullish on Rochester than many others are,” he added.
Why buy out Harbor Bay, just as talks about a future development on the site are starting?
“I don't really call this ‘a sale.’ I call it kind of reshuffling the deck and doing what's good for the partnership and for us as friends,” said Chafoulias of the transaction. “The Bells have other projects that they're working on in different parts of the country. I said, ‘You know what, this is our home base. I'll buy you out.”
While he said early talks about a proposed development on that site have already begun, Chafoulias isn’t discussing any specific details yet. However, he referred to his answer in a previous interview when asked about business opportunities in downtown Rochester, when he listed an urban grocery store, a pharmacy and student housing as needs for the area.
“With some luck, all of that could happen,” he said. “I’m ready to make a sizable investment… I'm very hopeful that, in the coming months, we can work really well together to do something that's transformational once again in our city core, but it's going to take good cooperation from the city and DMC for this to become a reality.”
Jeff Kiger tracks business action in Rochester and southeastern Minnesota every day in "Heard on the Street." Send tips to email@example.com or via Twitter to @whereskiger . You can call him at 507-285-7798.