Court order sets stage for sale of K2’s properties

The legal end of K2 Brothers Brewing is now in motion.

Last month, New York State Supreme Court Justice Arthur Williams signed a judgment of foreclosure and sale covering two properties tied to the brewery: its original taproom and brewery at 1221 Empire Blvd. in Penfield and the former Freewill Elementary School property at 4320 Canandaigua Rd. in Walworth. The large Wayne County site had been purchased and partially redeveloped as a production facility and destination brewery.

The order lays out the formal next steps in the foreclosure case and authorizes the process that will lead to the properties being sold.

The filing refers to the “mortgaged premises,” appoints a referee to oversee the sale and directs that a referee’s deed be issued once the transaction is complete. It also specifies that payments connected to the auction must be made in certified funds.

The order clears the way for both the Walworth production facility and the Penfield taproom and brewery to be sold at public auction. The proceeds will be applied to the outstanding debt, with any remaining balance determining what happens next in the case.

Moving trucks were spotted outside the Empire Boulevard location this past week, brewing equipment being loaded out.

In practical terms, the brewery had already ceased to exist. The court order simply formalizes the financial aftermath — assigning it a case number, a referee, an auction sequence and a clock.

The numbers are stark. A court-appointed referee, Eliza Garbrielle Heaton, calculated the balances owed as of Jan. 7: more than $2.5 million on the first mortgage, and nearly $2.4 million on an interim loan. That’s just under $5 million combined, before accrued interest and legal costs. The order specifies that interest runs at 9 percent annually from the date of sale until the deed changes hands. Each day that passes without a closing, the total grows.

The foreclosure action was filed last September by Canandaigua National Bank and Trust Co., the lender that financed K2’s expansion into the former elementary school in Walworth. The lawsuit named the corporate entities — 4320 Canandaigua Rd LLC, K2 Brewing Inc., and 1221 Empire Blvd LLC — and the brewery co-founders, Kyle and Brad Kennedy as loan guarantors. None of the defendants answered the complaint. A default judgment and reference order followed in January, appointing the referee to calculate what was owed. Her report came back on Feb. 3, and the judgment followed 17 days later.

The two properties at the center of the case tell the whole story of K2’s arc. First comes the Walworth production facility at Canandaigua Road — the former elementary school, 72,000 square feet, more than 40 acres, the big bet. The order directs that it be sold at public auction at the Wayne County Hall of Justice in Lyons, with notice published in the Wayne County Times. If that sale doesn’t fully satisfy the debt, the Empire Boulevard taproom in Penfield follows — auctioned at the Hall of Justice in Rochester, notice in the Daily Record.

The two locations that once represented K2’s past and future will now be auctioned sequentially to settle the same balance sheet.

The Penfield taproom opened in 2017 in a converted antiques store overlooking Irondequoit Bay. The beer garden filled on summer evenings — and then year-round, after the tent went up. The mug club built loyalty. The Blue Razz sour won medals. For several years, the formula worked well enough that the brothers began thinking about what came next.

What came next, at first, looked like a sensible investment.

In 2022, the Kennedys went further, presenting expansion and renovation plans to the town of Penfield. The vision was substantial — a meaningful investment in the Empire Boulevard location, a commitment to the community that had made K2 what it was. Those plans were received, discussed, and then quietly set aside.

The brothers purchased the neighboring building on Empire Boulevard — the former Agway Market — with plans to use it for overflow parking in the summer of 2023. It was a practical acquisition, the kind of move a growing neighborhood brewery makes when success starts bumping against its own physical limits. But the Agway building was never converted or used for its intended purpose. In retrospect, it reads as an early sign of a pattern: ambitious plans meeting the friction of execution.

Then came the school.

In 2023, the Kennedy brothers purchased the sprawling former Freewill Elementary School property with an expansive vision: a large production brewery, event space, food service, a destination campus capable of dramatically increasing output and drawing visitors from well beyond the immediate area. It was the kind of growth story craft beer loved to tell during the boom years. Financing came through CNB, with loans secured by both properties and personally guaranteed by the owners.

The economics never aligned. The post-pandemic landscape had shifted in ways that made destination brewery concepts difficult to sustain. Operating a repurposed school building carries a cost structure categorically different from running a compact neighborhood taproom. Utilities scale up. Staffing scales up. Maintenance on a 72,000-square-foot building scales up. A destination brewery depends on sustained traffic to justify its overhead, but that traffic never reached the levels required. By March 2025, the Walworth facility had closed. A few months later, the loans fell into default.

What makes the timeline particularly striking, in hindsight, is how much was left unfinished at every stage. The Agway building sat unused. The Penfield expansion plans were never acted on. The Walworth campus did not reach the scale its financing assumed. Each unrealized plan points to the same underlying tension: the distance between what K2 envisioned and what it was able to build.

The court order, for all its procedural coldness, carries one passage that lands with particular weight. It decrees that the defendants — the LLCs, the brewery itself, and Kyle and Bradley Kennedy — may be held “jointly and severally” liable for any deficiency remaining after the sales. Meaning that if the properties don’t fetch enough to cover nearly $5 million in debt, the bank retains the right to pursue the brothers individually for any remaining gap. The judgment forecloses not just the buildings, but potentially much more. That provision — standard in commercial foreclosures, easy to overlook in the dense language of a court order — is the one that will matter most if auction prices disappoint.

There is also the matter of a second, separate foreclosure filed by a Webster-based lender seeking roughly $612,000 tied to the Empire Boulevard property. That claim sits behind the bank’s lien priority — it only recovers what’s left after the larger debt is satisfied. The Penfield taproom is now the center of a layered legal puzzle: one foreclosure running in front of another, both aimed at the same parcel of land along the bay. Whether any proceeds trickle down to that second lender depends entirely on what a buyer is willing to pay for a shuttered taproom on Empire Boulevard.

The order also quietly bars every defendant and “all persons claiming under them” from any “right, claim, lien, title, interest and equity of redemption” in the properties. In plain language: the door is closing. The time for reversal has passed.

For the Rochester beer community, there’s something genuinely disorienting about watching this process unfold in public documents — particularly given how little the principals have said. No public statement. No farewell post. No acknowledgment on any channel that K2 Brothers Brewing has closed, let alone an explanation of why. Patrons have received one internal email describing a temporary closure that now appears to have been anything but.

The K2 that people remember existed in a different register: in pint glasses and picnic tables, in a mug with your name on it hanging on a wall somewhere, in the specific pleasure of a hazy IPA at golden hour over Irondequoit Bay. That version of K2 — the one people actually experienced — has nothing to do with the case numbers and mortgage balances moving through Wayne County Supreme Court right now. And yet it is entirely a product of the financial decisions that put those documents in motion.

Those things were real. The court order doesn’t erase them, but it does formalize, with the particular finality that only legal proceedings can deliver, that the business that created them is gone.

The auction must be scheduled within 90 days of the judgment’s entry filed on Feb. 20. Watch the Wayne County Times and the Daily Record for notice of the sale dates. Attorneys and K2 Brothers Brewing did not respond to requests for comment.

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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