City of Rochester issues default notice to Castle Community, LLC

(ABC 6 News) – The City of Rochester said the The Castle Community, LLC developers have defaulted on their agreement with the city.

As a result, the City of Rochester "may pursue any legal remedies in law or equity," according to the letter.

The City of Rochester issued a default notice to Castle Community, LLC due to a failure to adhere to expectations in the November 2017 agreement when the City sold the property to Castle Community, LLC.

ABC 6 News has reached out to Scott Hoss for a response.

RELATED: Questions remain after Castle, City records released

The Castle Community owners, including Scott Hoss (to whom the letter was addressed) failed to return the building to its approved use — community and arts programming — after repeated warnings from the City that they were in violation of the purchase agreement.

The letter instructed Hoss and Castle ownership to contact the City attorney’s office immediately if they wished to negotiate further to avoid litigation.

Jenna Bowman with the City of Rochester said she is not aware of any movements by the Castle owners to reopen negotiation.

There is no deadline for their response in the letter, she added.

If the City of Rochester doesn’t receive a response, Bowman said there would "need to be some conversations" between the City attorney’s office, city council, and other officials.

The legal matter would likely be discussed in closed meetings, which could begin in June.

Castle Community ownership has not responded to repeated requests for comment over the past six months.

Possible actions included amending the documentation to include new vendors the Castle Community plans to add to the space, and/or adding the noncompliant months to the time the owners are required to host community and art programming in the space.

How did we get here?

• The Castle Community, LLC won a bid to purchase the Castle building, formerly called The Armory, in 2017. At the time of the agreement, the prospective owners agreed to use the building for arts and cultural organizations and activities, and to seek city approval for a substantive change in the property’s use within the first five years of ownership. The Castle Community, LLC, consisting of Eric Deutsch (Pace International), Ross Henderson (Henderson Investments, which owns Centerville Apartments), Scott Hoss (Think Bank, Paramark Real Estate) and Leyzer Topel (property owner/developer) worked with Threshold Arts founder Naura Anderson and Cameo Restaurant owner Zach Ohly to submit the proposal to the City Council. They were selected from three potential buyers.
• The space opened as “The Castle Community” in February of 2019. Castle is Open for Business
• In Sept. 2020, the Castle Community, LLC announced that Echo Church would lease the building for a calendar year. “We thank our existing tenants for allowing us to take this opportunity to pivot, reassess, conserve and grow resources, and bring the Castle roaring back in 2021,” an announcement on the Castle’s website reads. Over the course of that year, Threshold Arts rented a storefront on Broadway in downtown Rochester.
• Castle owners extended Echo Church’s lease in October and November of 2021, which prevented the building’s previous tenants from returning to the space.
• On Nov. 11, the City of Rochester warned Castle Community, LLC owners that they were in breach of contract while Echo Church remained in the building. The city gave Castle owners 60 days to come back into compliance – i.e., use the building for arts and cultural programming again. The Castle owners did not come back into compliance during that period.
• The Castle Community owners asked for, and received, a three-month extension in January. They were allowed to rent the building to Echo Church until March 31, 2022, with the expectation that they would come back into compliance at the end of that period. The Post-Bulletin reported hat Scott Hoss identified then-unknown arts organization “Amplify Arts” as the frontrunner in programming negotiations. Castle Community receives three-month extension.
• On January 7, The Post-Bulletin eported that Castle tenant Cameo Restaurant filed a court complaint against the owners, alleging that use of the space by Echo Church and Queen City Coffee and Juice violated its contract.
• On Jan. 20, 2022, the City announced that Threshold Arts, now out of the Castle for a year and change, had won the bid to program the Chateau Theater. Anderson had previously written to the city council that although contract negotiations with the Castle Community were still underway, she did not believe the arts organization would return to the building. Contract negotiations were to follow.
  Rochester City Council makes decisions on Chateau Threatre and Rochester parks
• On Feb 16, Castle Owners proposed that Echo Church would remain in the building after March 31, with affiliated Rochester residents Heather and Brandon Sampson handling arts and music programming.
  Echo Church to remain in Castle building; former Yoga Tribe owner to head new arts group
• On April 1, ABC 6 News reported that while there was no contract in place between the City of Rochester and the Castle owners, Echo Church had announced its departure from the building.
  Echo Church to leave the Castle, Echo Church moving service to Mayo High School
• Castle tenant Cameo Restaurant announced its closure on April 27.
  Cameo closing its doors this weekend
• On April 28, the City of Rochester released emails between Scott Hoss, Naura Anderson, and the Castle Community, LLC to members of the Rochester media.
  Questions remain after Castle, City records released
• On May 17, the City of Rochester approved Threshold Arts’ move to the Chateau Theater, the terms of which dictated a release from their obligations to the Castle Community.
  City signs off on Threshold Arts contract to manage Chateau for three years
• On May 26, the City of Rochester gave the Castle Community, LLC notice of the default.