Broadway at Center project hits another snag after loss of key investor
Construction on the Broadway at Center project — initially billed as the first major development under DMC — is once again being delayed.
The developer behind the proposal, Rochester business magnate Gus Chafoulias, announced Wednesday that he is looking for new investors after one of the project's stakeholders failed to "fulfill its obligations."
The stakeholder was identified as investment group led by Prince Turki Bin Abdullah Bin Abdul Aziz Al-Saud, a member of the Saudi Royal Family, and Anas Abukhadra, a Minneapolis businessman.
A $105 million loan for Broadway at Center was scheduled to be finalized at the end of May. However, according to a spokesperson for Titan Development & Investments, the Chafoulias-owned company providing assistance on the project, the loan did not clear due to the investment group's inaction.
"As a result, the project had no alternative but to terminate the investment group’s rights to the project and pursue negotiations with potential replacement investors," Titan said in a statement. "It is anticipated that closing will take place once those negotiations are concluded."
Broadway at Center was approved by the council in November 2014 with an expected groundbreaking the following spring. Since then, there have been numerous delays. The project is expected to take about two years to build.
“With any large-scale project like this, there are a number of parties involved," Chafoulias said in a written statement. "We are deeply appreciative of all of our stakeholders who have stood by our side. Unfortunately, one of them didn’t follow through as promised. We are optimistic of our next steps though and hope to close on the transaction soon."
Plans for the project call for a 264-room Hilton Hotel, about three dozen housing units, commercial space and a parking garage. It would be the biggest project in Rochester since the construction of Mayo Clinic's Gonda Building.
The city is contributing $14 million toward the project — $6.5 million in tax increment financing for the developer and the rest in infrastructure costs. The funds will count toward the city's $128 million contribution to DMC.
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(Cover graphic: Titan)
