Major Development Proposed For Michael’s Restaurant Site

Rochester, MN (KROC-AM News) - It appears plans for a major development at the site of the former Michael's Restaurant in downtown Rochester are finally taking shape.

The Rochester City Council, meeting today as the city's Economic Development Authority, will be asked to approve a two-year Exclusive Negotiating Rights Agreement with BGD5 Development concerning the property along Broadway just south of West Center Street. BGD5 is an entity of Titan Development owned by the Chafoulias family.

The agreement is designed to give the developer and the city time to negotiate a public assistance package for the project and is considered a preliminary step toward the redevelopment of the site. Demolition work on the property began in 2022.

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The iconic Michael's Restaurant close 10 years ago. The Pappas family owned and operated the business at that location for more than 60 years, and shortly before it closed, announced a development agreement with the Chafoulias family.

A decade later, the development plans call for a 14 story mixed-use building with approximately 175,000 square feet of space. The proposal currently includes about 30,000 square feet of retail space at the street and skyway levels, 45,000 square feet of office and student support space on the third through fifth levels, and around 200 student apartment units on the remaining floors of the structure.

BGD5 Development is also proposing the construction of a new Skyway bridge over Broadway to the Hilton Hotel. The project's description in the agenda for the Economic Development Authority meeting describes the Skyway as a key feature of the project that would connect the new building to the hotel and "establish important corridors linking to University Square."

At this point, the level and type of public assistance the developer is seeking from the city has not been disclosed. City staff indicated it could include Tax Increment Financing and agreements involving the use of city parking facilities.

The proposed contract indicates the aim of the agreement is to reach a definitive contract for the redevelopment of the property. It also states the agreement can be canceled by either party during the two-year period after 30 days written notice.

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