Following Wednesday's announcement about the delay in the financing for the now-$145 million Broadway at Center project, I decided to look at back an earlier version of that project rolled out by Titan Development and Investments in 2013.
Here's an article I filed on May 31, 2013 with an assist from Managing Editor Jay Furst. The rendering is of the version of Broadway at Center introduced at Titan's press conference:
Just a week after Mayo's Destination Medical Center plan was approved by the state, a Rochester developer announced plans today for a 25-story tower at the corner of South Broadway and East Center Street.
The Broadway at Center mixed-use project, proposed by Andy Chafoulias' Titan Development and Investments, would have about 30,000 square feet of Class A office space, a 150-room four-star hotel, 150 market-rent apartments, a "high-end grocery" and a Minnesota-branded steakhouse, among other attractions.
The announcement was made at a news conference this morning at Titan's offices in the Minnesota Biobusiness Center. Chafoulias didn't attend; the announcement was made by John Beltz, vice president of brand revenue development.
Titan is "poised for some very significant growth and contributions to Rochester," Beltz said, citing the company's planned restaurant and entertainment complex three blocks south at the C.O. Brown building site and a seniors apartment project further north on Broadway.
No cost estimate was provided for the Broadway at Center tower, and Beltz said the tower could go higher as planning proceeds -- possibly topping the Broadway Residences and Suites tower next door, which is the tallest building in Rochester and southern Minnesota. As planned, the building would have about 300,000 square feet of space and would be connected to the skyway system and a planned city parking ramp on the block.
The new building would be on the northwest corner of the block bounded by South Broadway, East Center Street, First Street Southeast and First Avenue Southeast. The Broadway Residence and Suites tower is on the southwest corner, and the new project would be on the current site of CJ's Midtown Lounge, Jakobson Management Co. and Ginny's Fine Fabrics.
The goal is to have a "hole in the ground" and construction underway next year, Beltz said. He declined to identify the hotel, restaurant and retail tenants who are in discussions with Titan but said in a news release that they're "finalizing negotiations with several recognizable Minnesota brands."
Rochester's lack of a top-tier hotel brand was often cited during the DMC legislative process as something the city needs to attract national and international medical visitors.
The announcement signals Andy Chafoulias taking the wheel of a project envisioned by his father, Rochester developer Gus Chafoulias, in 2007. That proposal was for a two-tower mixed-use project with retail, apartments and office space as well as possible space for University of Minnesota Rochester.
As with the previous version, Rochester architect Hal Henderson of HGA Architects and Engineers would direct the project design. Darren Schlapkohl, Titan vice president of development and construction management, said the project has "been in design for some time and continues to evolve."
Mayo's DMC initiative, which was announced in January and won legislative approval less than two weeks ago, is "an excellent addition to the vision" for Rochester, Beltz said, but Henderson said the Broadway at Center project has been at an advanced stage for at least six months.
All of which would have been disastrous if not for the presence of its fledgling immuno-oncology pipeline, which no doubt prevented an even bigger share price collapse.
Further data updates are expected in the coming months, and indeed this afternoon Celyad’s chief executive, Christian Homsy, ended a conference call discussing the C-Cure results by flagging approaching good news in oncology. Given the relatively small amount paid to access this technology and the huge hopes for the adoptive T-cell space, investors could indeed soon forget the C-Cure failure.
Construction of a new downtown Rochester skyway is well underway.
This is a small skyway that will link the 318 Commons building on First Avenue to the former Paine Furniture building on South Broadway. It will span a small alley to make the link.
The connection will link University of Minnesota Rochester offices in the 318 Commons building to future UMR offices in the Paine building.
A quick peek down the alley from behind Cafe Steam showed that the construction is rolling along really quickly.
Once completed, downtown pedestrians will be able to get even farther without stepping out in the snow or rain.
Two years after making a flashy return to Minnesota with a Rochester shop, Dunkin' Donuts has signed a franchise agreement to bring three more locations to the region.
The Massachusetts doughnut maker announced Thursday that it has signed a deal with new franchisees Oliver Schugel and David Schooff to open three new restaurants in Mankato. The first one is slated to open in 2017.
Mankato is leaping ahead of Rochester, which was expected to have about five locations by now.
Rochester Retail Services, a division of the Kahler Hospitality Group, opened a shop here in June 2014 at 15 First Ave. SW in its Kahler Grand Hotel complex in the heart of downtown. It was the first one in Minnesota since 2005. Dunkin' said then that Rochester Retail Services would be opening five more shops in the next few years.
That changed last fall, according to Dunkin' Donuts Senior Director of Franchising Patrick Cunningham.
"Rochester Retail Services, the franchisee of record, will continue to own and operate the existing restaurant in the Kahler. However, they will not develop more Dunkin' stores as we previously reported," he said in October.
When announcing the coming Mankato shops, Dunkin' said franchise opportunities remain available in Rochester. Plus, "to help fuel additional growth in the market, special development incentives are available."
In Mankato, the new franchisees have more than 45 years of combined experience in business and real estate development.
“We have a passion and loyalty for the Dunkin' Donuts brand and look forward to opening our restaurants in the years to come," stated Schooff.
A long-anticipated downtown Rochester development, the first Destination Medical Center project, is still waiting for financing before can can begin.
City officials were notified recently by Hinshaw & Culbertson, a Minneapolis law firm, that a $102.5 million loan to finance the bulk of developer Gus Chafoulias' 23-story Broadway at Center tower was scheduled to close on May 31. A $2.3 million tax-increment financing loan was expected to close at the same time.
However, that didn't happen.
When asked Tuesday about the status of the financing and the timeline for the Broadway at Center project, Titan Development Marketing and Communications Manager Sheila Thoma made a statement via email. Titan is a Chafoulias family company.
"It has not closed. As soon as it does, I will let you know," she wrote
The loans are being made by Minneapolis-based Dougherty Financial Group, which includes seven financial companies that manage more than $42 billion in assets. The firm's founder and board chair, Michael E. Dougherty, is very familiar with Rochester and Mayo Clinic's Destination Medical Center initiative.
Dougherty joined the the Mayo Clinic Board of Trustees in 2012. He then became a DMC Corp. board member in April.
While the loans and $6.5 million in assistance from the city of Rochester will finance the majority of the $140 million project, people close to the project say an additional $35 million is coming from Middle Eastern investors.
Chafoulias, with limited assistance from his son Andy Chafoulias and Titan, has been working on different versions of this project since 2007.
Broadway at Center will house a 264-room Hilton Hotel, 33 apartment units and space for office, retail and restaurant use. More than $14 million — including the city's $6.5 million assistance to the developer and the remainder of infrastructure costs — is planned to be reported as DMC local contributions and credited toward the city's $128 million commitment.
There has been a lot of interest about when demolition of the empty CJ's Midtown Lounge and other buildings on that corner would begin. Once the financing for the project is locked in, that should clear the way for work to start.
I was a bit premature Tuesday when I wrote that South Dakota developer Stencil Homes had re-named its Buckeye Apartments project in downtown Rochester.
I spotted the project on Stencil's website labeled as Ovation on Monday. I wasn't able to reach CEO Nate Stencil for confirmation, so I reported that it appeared that the new name for the project will be Ovation.
On Tuesday, Stencil sent me a note that said I was partially right.
"On 'The Buckeye' name change, we are still not 100 percent set on the new name but I can tell you we will be changing it. We are currently polling different names and will soon have one nailed down," he wrote.
The name of a 92-unit apartment complex being built on the corner of Fourth Street and Third Avenue Southeast in downtown Rochester has been a sensitive issue for some of the neighbors. Stencil originally tagged it as Buckeye as a nod to the Buckeye Liquor store landmark that was demolished to make way for the project. Some in the neighborhood didn't think that was an appropriate name.
The name of a 92-unit apartment complex being built on the corner of Fourth Street and Third Avenue Southeast in downtown Rochester has been a sensitive issue for some of the neighbors.
South Dakota developer Stencil Homes labeled it Buckeye Apartments as a nod to the Buckeye Liquor store that was demolished to make way for the project. Some in the neighborhood didn't think that was an appropriate name. Now it looks like the developer has decided to try something different.
Stencil Homes' website shows a 92-unit apartment building as a Rochester project, but it's not called Buckeye anymore. The new name under the old rendering of the complex is Ovation.
This must have been a recent change. The Answer Man wrote about this on April 27 and Buckeye still was the moniker at that point. CEO Nate Stencil was not available Monday to answer questions about the Ovation name, but it looks like concerned neighbors should give themselves a round applause for the spurring a name change.
Here's some from my column on the culinary changes at the Kahler hotels.
Local food fans in the know may recognize the names Tommie Tran and Duc Le. Tran used to own and operate The Lunch Box in the old downtown food court, previously on the third floor of the Galleria Mall, now University Square. Le comes from the Canadian Honker and Powers Ventures.
Rochester's Kahler Hospitality Group is cooking again, with a new pair of executive chefs, who are turning the classic Lord Essex restaurant into a prime steak house.
Chefs Tommie Tran and Duc Le recently were promoted to take over the duties of Chef Stewart "Shefzilla" Woodman, who recently left after a short run at the Kahler hotels to return to the Twin Cities.
"Both are banquet savvy and restaurant savvy," said Tyler Kase, area director of food and beverage for Kahler Hospitality Group, of the two Rochester chefs.
Tran and Le now are in charge of the culinary operations of the Kahler Grand Hotel and its sister hotels, which includes Lord Essex, The Grand Grill, Salute, Martini's, CB3, Freshens and Dunkin Donuts.
The hotels and restaurants are controlled and owned, in part, by local health-care executive and real estate developer Javon Bea and his family.
Kase, area director of food and beverage for Kahler Hospitality Group, says the first project for the culinary duo is upgrading the fabled Lord Essex in the Kahler Grand Hotel into a steak house serving only USDA prime cuts of beef.
With the closure of Rochester's beloved Michaels restaurant, he said it was decided there was a need for a classic steak house.
The change is underway and the plan is to officially re-launch Lord Essex this summer. It will serve eight prime cuts of steak in different portions, according to Kase.
Diners should expect an opportunity to "meet the meat" before getting their menus. Servers will roll a cart up to the table to display the prime cuts as well as lobsters and examples of Lord Essex's jumbo, one-pound baked potatoes.
"We're going for the 'wow factor,'" he said.
While the Lord Essex will feature many new menu items, it also will be serving long-time local favorites. That means the Duchess potato soup plus the French onion soup, which is being brought back by popular demand.
After the relaunch of Lord Essex, Tran and Le will turn their attentions to Salute in the Marriott hotel to more finely "hone" the Italian cuisine there.
Kahler Hospitality Group has an estimated 50 to 70 employees staffing its food venues.
Mayo Clinic is returning to the fifth floor of Rochester's Minnesota BioBusiness Center, after a Belgium-based biotech firm left it empty for more than a year.
In March 2015, the Rochester City Council approved a five-year lease for Mayo Clinic-linked Celyad to take over the fifth floor to create a prototype manufacturing facility that would add 33 jobs to Rochester.
Celyad's lease meant displacing all the Mayo Clinic workers based on that floor. Mayo Clinic moved its employees out at the start of 2015.
However, the project didn't go as planned. Celyad, formerly known as Cardio3, was unhappy when development costs came in much higher than the estimate provided by the city.
"The budgets we got far exceeded initial assumptions on which the project was decided," said Celyad CEO Dr. Christian Homsy in an email from Belgium in November. "Including the city support, the fit-out cost now exceeds the cost to do the same work in other locations where there is no city or state support."
Celyad halted the project before any construction work was done, so the 14,963 square feet of space remained just as Mayo Clinic left it. However, the biotech company did uphold its end of the lease and has been paying rent of $22,444.50 per month, or $269,334 per year. City officials say the company has made all of the required payments.
Since the end of 2015, the city has been looking for a new tenant to take over the fifth floor. Now, the city has approved a new lease with an old tenant.
The new deal adds the fifth floor to Mayo Clinic's lease, which already includes four floors of the seven-year-old building.
"The lease amendment would provide for a rental rate of $17 per square foot for the 'premises,' which consists of the entire fifth floor. That rate would be in effect for a term consistent with the present term for the other four floors through April 1, 2029," according to the agreement approved by the Rochester City Council on Monday.
That's $1 less per square foot than the $18 per square foot Celyad has been paying.
Before approving the new Mayo Clinic lease, the city council OKed the termination of the Celyad agreement. It called for Celyad to continue paying its regular rent through Sept. 30, plus "a lease termination fee" of $111,549.18.
That fee will cover costs for the space from October to Jan. 1. Mayo Clinic will be building out the space starting in October and it will began paying rent in January. Mayo Clinic plans on using the floor to help teams that need more room.
"Planned occupancy will include relocating certain research support teams in need of additional office type space," stated Kelley Luckstein, of Mayo Clinic Media Relation, in an email.
Celyad's relationship with Rochester began in 2007, when it licensed stem-cell research by Mayo Clinic's Dr. Andre Terzic and Dr. Atta Behfar. It was called Cardio3 Biosciences back then. They have collaborated for years on the cardiopoiesis technology the company uses to repair patients' hearts by re-programming their own stem cells to regenerate cardiac tissue. Mayo Clinic owned 2.69 percent of Celyad as of March 3, 2015.
Beyond the fifth floor prototype manufacturing facility, the Celyad deal was designed to clear the way for the biobusiness to possibly build a 100,000-square-foot manufacturing facility with 350 employees in Rochester. That's what the company anticipates it will need if the Federal Drug Administration gives it a green light to take its stem-cell treatment to market.
Celyad's Homsy says Rochester now is out of the running for that.
"Celyad has assessed that a manufacturing plant in Rochester at this point of time cannot be justified. We have opened an office in Boston from where our U.S. management is based, but we have delayed the decision on a manufacturing plant in the U.S. as we are able to manufacture all clinical lots out of our Belgian facility. As we approach commercial launch in the U.S., this situation may be revisited," he responded from Belgium by email.
Though the relationship between Rochester and Celyad has diminished dramatically in recent months, Homsy said it is not completely over.
"We continue to collaborate with Mayo Clinic, as well as with Andre Terzic, in the context of the evaluation of our CHART-1 data that should be disclosed by end of June 2016. If the data is positive, further development in the U.S. in the form of CHART-2, and, potentially, commercialization would follow," he stated.