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This post is one in a partnership between the Rochester Beacon and veteran reporter Will Cleveland, featuring articles published on his Substack site, Cleveland Prost.
K2 Brothers Brewing’s Empire Boulevard taproom has been dark since November. The shutdown was described as “temporary” in an internal email sent only to mug club members. There was no public announcement, no press release, no social media post, and no reopening timeline. The only reason the public learned about the closure at all was because that email was leaked—and because the lights have been off in Penfield ever since it was sent.
In practical terms, the brewery is not reopening.
Now the legal record makes that reality unmistakable—and more complicated.
In a foreclosure action brought in September by the Canandaigua National Bank and Trust Co. against K2 Brewing Inc. and related entities, a court-appointed referee has formally calculated what is owed on the loans that financed K2’s failed expansion. As of early January, the referee determined that nearly $5 million is due across two commercial mortgages—more than the original combined principal once interest, late charges, and fees are added. Interest continues to accrue daily. Attorneys’ fees will push the total higher still. (Attorneys for CNB are seeking just over $20,000 for their services, according to a recent filing.)
The 388-page report recommends that the properties be sold separately, with K2’s massive Walworth production facility offered first, followed by the Empire Boulevard taproom and brewery. It is, on paper, a procedural step. In reality, it clears the way for a judgment of foreclosure and sale and, ultimately, a public auction.
That proceeding remains in progress. The court has not yet signed the final judgment of foreclosure and sale. No auction date has been set. But the machinery is engaged, and it is moving forward.
And there is more.
A newly unearthed, separate foreclosure action has been filed against 1225 Empire Blvd LLC—the entity tied to K2 Brothers Brewing’s Penfield property. That case, also filed last September, centers specifically on the Empire Boulevard real estate and seeks to foreclose on a mortgage with an original principal balance of approximately $612,000, plus accrued interest, late charges, legal fees, and costs.
In that action, the plaintiff, a Webster-based company called EIE LLC, is seeking a full judgment of foreclosure declaring the amounts due for principal, interest, costs, and reasonable attorney’s fees; an order directing the sale of the mortgaged property at public auction; and, if the auction does not satisfy the debt, a deficiency judgment against Brad and Kyle Kennedy, the brewery founders, for any remaining balance.
The foreclosure filed by EIE sits behind a much larger, earlier loan held by CNB. Under New York law, lien priority is generally determined by order of recording, and CNB’s mortgage predates EIE’s, making the bank the senior lienholder. That means if the property is sold at foreclosure auction, proceeds must first satisfy CNB’s debt before EIE receives anything. Only after the senior mortgage is paid in full would EIE be entitled to recover on its claim. If the sale price does not exceed the amount owed to CNB, EIE could recover little or nothing. In practical terms, EIE’s case is a junior foreclosure running parallel to the bank’s action.
The complaint also seeks to forever bar the defendants from any right, claim, or interest in the property once it is sold.
The warning language is stark: The defendants are advised they are in danger of losing their property and must provide an answer to the summons and complaint quickly. The filing makes clear that sending a payment to the mortgage company will not stop the foreclosure action. Like the CNB filing, both cases remain pending.
Taken together, these proceedings show that what began as a single expansion gamble has evolved into a multifront legal unwind involving millions of dollars in secured debt and potential personal exposure.
Records show there are also numerous state tax liens filed against the Kennedys that total thousands of dollars.
K2 opened in December 2017, founded by the Kennedy brothers in a converted antiques store overlooking Irondequoit Bay in Penfield. From the beginning, it felt right-sized. The brewery carved out a niche with hop-forward IPAs, fruited sours (the Blue Razz sour earned a gold medal at the New York State Craft Beer Competition), and a beer garden that quickly became one of the most vibrant gathering spots in the Rochester area. In warmer months it was packed; in colder months it evolved into an all-seasons destination. You could make a strong case it was the best beer garden in Rochester—lively but not chaotic, communal but still distinctly local.
The scale fit the vision. Production was manageable. Distribution was limited enough to preserve freshness and identity. The mug club created buy-in. The brand felt personal. For years, K2 was a reliable stop for Rochester beer drinkers.
Before the Walworth expansion, the Kennedys had flirted with growth. They came extremely close to signing a lease on a warehouse just before the pandemic pause in March 2020. It’s worth wondering what that alternate timeline might have looked like. Would a more incremental expansion—closer to the urban core—have changed the trajectory? Or would pandemic volatility have upended that plan anyway?
Instead, in May 2023, the brothers made a much bigger bet.
They purchased a sprawling, roughly 72,000-square-foot former elementary school at 4320 Canandaigua Road in Walworth. In total, the property consisted of nearly 42 acres. K2 added a locally manufactured 20-barrel, four-vessel brewing system (with a catwalk connecting the system to the army of 60-barrel fermenters). The new brewery occupied one of the school’s former gymnasiums, while the tasting room and gaming area were in the old cafeteria. The school kitchen became the hub for restaurant operations.
The vision was expansive: dramatically increased brewing capacity, event space, outdoor entertainment, and a destination-style facility that would transform K2 from a neighborhood brewery into a regional production player. The scale of the building alone signaled the shift. This wasn’t incremental growth. It was a leap.
To finance the project, the company took on more than $4 million in loans from CNB. The debt was secured by first mortgages on both the Walworth property and the original Empire Boulevard taproom. The loans were personally guaranteed by the Kennedys and affiliated entities. Public development organizations, including the Wayne County Economic Development Corporation, held subordinate interests, adding another layer of complexity to the capital stack.
On paper, it was a classic expansion story: acquire underused property, retrofit it into a production hub, scale up, capture more market share. In practice, the project never reached its projected potential.
The facility was simply enormous relative to demand. Construction costs climbed. Labor and utility costs followed. Operating a converted school is not the same as running a compact taproom. Foot traffic did not materialize at the levels necessary to justify the overhead. Online commentary often described the location as “the middle of nowhere,” though that characterization depends on perspective. Walworth is about 25 minutes from Rochester—closer, in fact, than some Ontario County destinations that beer drinkers regularly visit. But proximity alone doesn’t guarantee volume, and a destination brewery requires sustained draw.
By March 2025, the Walworth location had closed permanently. What was meant to be a transformative growth engine instead became a financial anchor.
Two months later, CNB declared defaults for failure to make required payments. In September, it filed a foreclosure lawsuit seeking to recover more than $4.7 million in principal, interest, fees, and costs. The case named both properties and the individual guarantors. It also revealed additional strain: unpaid vendor invoices, restoration claims totaling hundreds of thousands of dollars, and state tax warrants.
The referee’s report filed early this year confirms the scale of the debt and formalizes the next phase. The bank is now positioned to move for a foreclosure judgment authorizing a public auction. At that sale, the lender can submit a credit bid up to the amount owed—essentially bidding with the debt itself. If the properties sell for less than what is due, the bank can pursue a deficiency judgment against the guarantors within the statutory window following the transfer of the deed.
The newly uncovered foreclosure against 1225 Empire Blvd LLC reinforces that exposure. If the Empire Boulevard property sells short of the balance claimed in that separate action—currently alleged to exceed $612,000—the Kennedys could face personal liability for the remaining deficiency, depending on how the court rules and how the sales unfold.
In other words, this is no longer a theoretical unwind. It is a structured, ongoing liquidation process playing out across multiple dockets, with millions of dollars at stake.
The Walworth school-turned-brewery would go first under the referee’s recommendation. The Empire Boulevard taproom would follow. Meanwhile, the separate foreclosure proceeding tied directly to the Penfield property continues on its own procedural track. Once judgments are entered and referee’s deeds delivered after auction, unwinding those transfers becomes extraordinarily difficult. While last-minute settlements or negotiated resolutions are technically possible, the legal posture now points squarely toward new ownership.
For the original Penfield taproom, that means the so-called “temporary” closure is effectively permanent. The space may reopen someday under a different concept or operator. But K2 Brothers Brewing as it existed—the brand built by the Kennedys—is over.
Recent developments reinforce that conclusion. The Kennedys sold the Young Lion brand to Rohrbach Brewing for an undisclosed sum, a move that further signals dissolution rather than restructuring. Assets are being redistributed. The pieces are moving elsewhere. . Attorneys for the Kennedys did not respond to requests for comment.
The broader lesson extends beyond one brewery.
K2’s early success was built on controlled scale and strong local identity. It thrived because it understood its market and operated within it. The Walworth expansion required heavy leverage in an industry that had already begun to cool after pandemic-era sales spikes. During 2020 and 2021, breweries across the country saw unusual shifts in consumer behavior—more packaged beer, more local loyalty. By 2023 and 2024, that surge had normalized. Growth slowed. Competition intensified. Costs rose.
In that environment, margin for error shrinks dramatically. Large fixed costs—mortgage payments, utilities for a 72,000-square-foot facility (though only about 20,000 square feet was in active use at the time of closure), expanded staffing—demand consistent, high-volume revenue. When projections are missed, the math becomes unforgiving. Once debt service falters, legal mechanisms accelerate the timeline. Defaults trigger lawsuits. Lawsuits trigger foreclosure. Foreclosure triggers auction. Separate mortgages trigger separate actions. Guarantees expose individuals.
For Rochester’s beer community, the loss is more than a balance sheet story. K2’s beer garden, taproom events, and mug club nights were woven into local craft culture for nearly eight years. It was a first-date spot. A post-work unwind. A place to bring visiting friends. A reliable patio in July and a heated gathering place in October.
Regulars who held out hope for a reopening now face a stark reality: The building is headed for foreclosure proceedings, the legal actions are still actively moving through court, and the brand will not return in its previous form.
The silence wasn’t strategic. It was terminal.
Will Cleveland is a Rochester Beacon contributing writer. A former Democrat and Chronicle reporter, he writes about beer in the Finger Lakes region and Western New York on Substack.
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