A whole other question

A court hearing slated for early September seems to portend two possible outcomes for Brighton Whole Foods Center: If its developers prevail, the long-embattled project would vault over its final hurdle and realize its original vision. Or if the development’s foes triumph, the project could be killed or scaled back. 

But a third—and possibly more likely—outcome looms. What it might involve depends on whether brick-and-mortar retail can survive in a landscape transformed by online sales and buffeted by a global pandemic.

If they finally win in court after surviving years of legal battles centered on the proposed development’s Brighton parcel, the developers will find themselves facing a changed retail environment. For brick-and-mortar retailers, it is not a rosy picture.

Upscale plans

Plans for Whole Foods Center developed by the Daniele Family Cos. call for a roughly 83,000-square-foot plaza on Monroe Avenue near I-590 filled with more than a score of upscale shops and restaurants. 

As the development’s name indicates, the plaza is to be anchored by a 50,000-square-foot Whole Foods grocery. It would be the first of the Amazon-owned supermarket chain’s stores to rise in the Rochester area, the home turf of the growing and much-beloved Wegmans Food Markets Inc. chain.

Growing from a single Rochester Italian eatery founded by the clan’s patriarch, Mario Daniele, Daniele Family Cos. has expanded into ventures that now include restaurants, car washes, an upscale Rochester waterfront residential development and pricey Florida condominiums. For several years, Mario Daniele’s sons, Anthony and Danny, have run the company as co-presidents. 

The family proposes to develop the Whole Foods project on acreage that includes the sites of two former businesses: Mario’s Restaurant, founded and run by Mario Daniele, and the Clover Lanes bowling alley. 

When the Danieles first proposed the Monroe Avenue plaza some five years ago, an upscale market like Whole Foods would have seemed to be an ideal anchor for the trendy development they envisioned. 

Renderings on Daniele Management LLC’s website depicting a completed Whole Foods Center show a row of upscale shops including Bose, Brooks Brothers, Anthropologie and other high-end retailers.

It’s not clear whether some or all of those names represent signed tenants or are place holders for the kinds of brands the family hopes to attract.

Contacted this month, Danny Daniele said tenants have signed, contingent on the development coming to fruition. He declined to name specific tenants.

A grim outlook

COVID-19 has cast an at least temporary pall over the enterprising family’s vision. But the pandemic is not the development’s sole challenge, maintains Andrew Dollinger, a commercial real estate expert. 

Pointing to the declining fortunes of malls like Wilmorite Inc.’s Marketplace Mall and the earlier demise of the developer’s former Irondequoit Mall property, Dollinger says the outlook for the kind of retail brands the Danieles eyed for the Whole Foods Center was on the wane before the pandemic.

An associate broker with Hanna Commercial Real Estate, Dollinger also chairs the Town of Brighton’s Board of Assessment. His analysis of market conditions is based on his three decades of experience in commercial real estate and knowledge of the local market, and does not represent the town’s views, he says.

Brighton Supervisor William Moehle, has been and remains an enthusiastic backer of the Whole Foods project. He is upbeat on its prospects for attracting tenants. The plaza will add some $400.000 a year to the town’s tax revenues, Moehle predicts.

Notwithstanding its opponents’ claims to the contrary, he adds, the completed development, which is planned to include a new access road and traffic signal would see traffic in the now often congested Monroe Avenue corridor eased rather than worsened. 

Dollinger does not see even the most coveted brands’ brick-and-mortar prospects improving any time soon. Even if COVID-19 hasn’t landed a fatal blow on the upscale brick-and-mortar retail segment, he believes, it has put virtually all new store openings on indefinite hold.

If Whole Foods Center wins final approval, the grocery store and a Starbucks planned for the Brighton plaza are virtually certain to be built, Dollinger predicts. But few if any other high-end retail outlets are likely to join them. Like Bose, which shut down its retail stores this spring as the pandemic spread. It has since announced store reopenings, but how long they will stay open isn’t clear. 

Citing an accelerating shift to online shopping, the Framingham, Mass.-based sound equipment company had earlier announced that it ultimately intends to shutter all of its 119 U.S. retail stores as well as outlets in Europe, Japan, Australia and the United Arab Emirates.  

Urban Outfitters Inc., which owns Anthropologie and other clothing brands including its namesake chain, shut down all its outlets early in March, promising an update at the end of the month. On March 31, it said stores would remain shuttered until further notice.

Also pictured in Whole Foods Center renderings is a Tony Walker & Co. outlet. Reports in May said the Buffalo-based high-end clothing and accessory outlet abruptly closed its store in the Walker Center, a namesake plaza in the Buffalo suburb of Amherst. 

Anthony Ragusa, CEO of Tony Walker & Co.’s Advantage Co. parent, wrote in a message explaining the Tony Walker store closing to its terminated workers that COVID-19 was not behind the shutdown and that “what doesn’t change in all of this emotion is the fact that retail is dead,” the Buffalo News reported. 

And this month, Brooks Brothers—an iconic, 202-year old apparel retailer—filed for Chapter 11 bankruptcy protection. It reportedly plans to close 51 U.S. stores as it seeks a buyer.

Long-fought legal battles

Should Whole Foods Center be built, Dollinger maintains, the Danieles will have to take a new tack, altering their current plan to account for the decline of physical retail stores. 

In the meantime, the plaza’s legal battles have yet to be resolved.

Mario Daniele acquired the Clover Lanes parcel in 2014 after a contentious two-year court battle in which he fought Buffalo-based Benderson Development, which hoped to open a car wash that would have rivaled the Danieles’ nearby Royal Car Wash at Clover Street and Monroe Avenue. 

That court fight ended with the Danieles’ agreement to pay a hefty premium over the parcel’s $1.6 million assessed value to match Benderson’s $7 million offer. The restaurant and the bowling alley have since been shut down and their buildings razed to make way for Whole Foods Center. 

First submitted to the town of Brighton in 2015, the Whole Foods Center plan was viewed favorably by the town and won planning board approval in 2018. 

At least partly backed by Wegmans, whose flagship Pittsford store is a short distance away on Monroe Avenue, several groups sued to block the Whole Foods project, filing claims challenging the propriety of the town’s and the state’s approval process.  

Three groups—Brighton Grassroots LLC, Save Monroe Ave. Inc. and the Clover/Allen’s Creek Neighborhood Association LLC—have challenged Whole Foods Center in court. Court records list Save Monroe Ave. and the Clover/Allen’s Creek group as alternate names for the same organization.

The Danieles, who have posted a sign at the development site projecting Whole Foods Center store openings this year “pending Wegman’s new lawsuits,” see the locally based grocery chain as a prime mover stoking opposition to the development.

Neither Brighton Grassroots president Howie Jacobson nor Save Monroe Ave responded to emails asking for comment. Save Monroe Avenue has issued a statement thanking Wegmans for its “generous support.”

In a statement, Wegmans characterizes itself not as an instigator of Whole Foods Center opposition but as only “one of several hundred residents and businesses whose legitimate concerns about the Daniele Family Companies’ Monroe Avenue project were largely ignored.” It has offered support to the project’s opponents, but only after the neighborhood and business groups asked for it, Wegmans insists.

Legal objections to the development have centered on three sets of issues:

■ excess traffic the plaza might generate; 

■ whether Brighton properly granted zoning variances; and 

■ the town’s decision to cede a 10-foot strip of land bordering a public bike and pedestrian trail known as the Auburn Trail to the Whole Foods development.  

Brighton’s Moehle says the project’s opponents’ depiction of the plaza’s size are a disingenuous exaggeration. The development’s design would accommodate far fewer than the 22 shops that opponents claim are planned, he believes.

In June 2019, a Fourth Judicial Department Appellate Division panel upheld a lower court decision dismissing the Clover/Allen’s Creek group’s assertion that the town had violated open meetings law. The panel left the door open for a further challenge, however, ruling that the Auburn Trail is parkland and could be subject to the public trust doctrine, a legal principle requiring governments to hold certain assets in trust for public benefit. 

That doctrine came into play this year, when a separate Fourth Judicial Department Appellate Division panel handed down a Jan. 31 ruling dismissing Brighton Grassroots’ procedural objections to the town’s review process, but sent a single question—whether the town had improperly denied opponents the opportunity to seek a referendum on the 10-foot-wide strip’s turnover—back to the lower court. 

“Petitioners are entitled to a declaratory judgment that the town’s conveyance of the recreation easement to the developer is subject to the public’s right to petition for a permissive referendum,” the three-judge panel wrote in the Jan. 31 ruling.  

State Supreme Court Justice John Ark, has set a Sept. 9 date for a hearing, setting an end-of-August deadline for the parties to debate three questions:

■ whether the town needs to protect the Auburn Trail; 

■ steps the town might take to ensure that the trail remains accessible to the public; and

■ whether the project’s opponents could ask the court to halt the development. 

In a recent telephone interview with the Rochester Beacon, Danny Daniele predicted an ultimate win in court. The project’s opponents see an opposite outcome, pronouncing themselves ready for further court battles. 

In a Feb. 1 statement, Brighton Grassroots celebrated the Jan. 31 ruling as reviving “two of the most significant portions of Brighton Grassroots’ claims against the town in this lawsuit … (and giving) the community group significant momentum in the subsequent lawsuits yet to be decided.”

A development that might bring unrelated but politically charged legal complications for a Brighton Whole Foods market, should one open, is a class-action brought filed by Whole Foods employees in Massachusetts, Seattle, New Hampshire and Berkley, Calif. The suit filed in a Massachusetts federal court accuses Whole Foods of racial discrimination by prohibiting workers from wearing Black Lives Matters masks.

New landscape awaits

If Whole Foods Center gains final approval, predicts Dollinger, the project will find itself amid a less-upscale retail landscape than the one anticipated when the plaza was conceived. 

Recently, Dollinger notes, Pittsford Plaza inked a deal to site a Five Below store in the Monroe Avenue surface mall. A long-established bastion of mid- and high-end retail, Pittsford Plaza’s current tenants include Barnes & Noble, Bed, Bath & Beyond stores. The area’s only Trader Joe’s market calls Pittsford Plaza home and Wegman’s flagship Pittsford Store sits adjacent to the plaza.

A chain similar to its Dollar Store and Dollar General cousins, Five Below promises patrons deep savings on a wide variety of steeply discounted goods ranging from books to school supplies to candy and other merchandise by promising to keep prices on all items at $5 or less. It currently has four Rochester-area stores.    

Unlike the upscale brands planned for Whole Foods Center, Five Below sees the pandemic as an opportunity. Announcing a round of reopenings of COVID-closed stores in April, the 193-store discount chain also said that it had secured a $225 million line of credit, which it plans to use to open 100 to 120 stores this year.

Insisting that “five years ago, we never would have put a Five Below in Pittsford Plaza,” Dollinger sees the siting of one of the discount chain’s stores there as a harbinger of downscaling of the Monroe Avenue Brighton/Pittsford corridor’s retail demographic.

The move down market, he predicts, will discourage high-end retailers, who will increasingly think about opening new stores only in the toniest precincts of the priciest ZIP codes, from locating there.

Will Astor is Rochester Beacon senior writer.