Big changes coming to CityGate as complex looks to capitalize on 'Topgolf effect'

What is the Topgolf Effect, and will we see it in Rochester?

The “effect,” refers to a simple phenomenon: Wherever a Topgolf opens, other retailers and businesses tend to follow.

“It changes the perception of the community,” said Cal Wray, president of the economic development authority in Augusta, Georgia.

That was the case after Augusta got one in 2020. And officials are banking on the same thing happening here, with construction on a Topgolf expected to start late summer at CityGate, a retail plaza at the border of Rochester and Brighton.

This already is a golf town, in many respects. So, too, is Augusta.

"We have a little golf tournament here in April,” Wray joked, referring to The Masters.

Yet Topgolf has left its mark.

The national chain combines high-tech driving range games with a restaurant, bar and event space. It just recently opened its 100th location and is projected to rack up nearly $2 billion in sales this year.

“I don't know exactly how you quantify it,” Wray said of the Topgolf effect on communities, “but it definitely comes into conversation where you're now able to discuss with a higher-end level of customer that you may not have been able to before, based on retail.

"Even pitching now for industrial or office, we'll talk about the Topgolf — because it's the ‘quality of life’ piece.”

At CityGate, off Westfall and East Henrietta roads, Topgolf already is being credited with attracting a 191-room short- and extended-stay hotel and a Chipotle restaurant. All should get under construction in the coming months and represent a combined 23 acres of development.

"Yeah, we’ve got a lot going on,” said Matt Lester, who leads the development team that bought CityGate a couple of years ago.

The hotel — a combination AC Hotel by Marriott and Element by Westin — is a product of DelMonte Hotel Group, based in East Rochester. CityGate’s central location, including its proximity to the University of Rochester campus, was a draw. But not the main one.

“We would not have selected this location without Topgolf,” a company spokesperson said in an emailed response to questions.

Bringing the ‘boom’

The CityGate proposal is for a two-story facility with 80 hitting bays. The one in Augusta, opened four years ago, was half the size, but also joined an existing retail complex — with the same anchor tenant as CityGate.

“Costco was there,” Wray said. “It was creating tax revenue. But you didn't have that boom.”

Similarly, in Rochester, Costco opened in 2015 and spurred the first wave of development. But only half the envisioned project got built. And after construction stalled, vacancy crept up in the outlying commercial buildings.

Topgolf got things rolling again in Augusta. Like Costco, the company is a destination retailer, drawing customers from well outside the immediate area. Augusta’s Village at Riverwatch also had a movie theater and some apartments. But with Topgolf came a Dave & Busters.

“Since those two started coming out of the ground and began opening,” Wray said, “the rest of that development just exploded.”

Today, there are two more sets of apartment buildings, he said, and three or four new restaurants.

What is special about Topgolf? Officials say it could be that other businesses rely on a similar market analysis, or they hope to cash in on the traffic a Topgolf will generate

Whatever the reason, Louisville, Kentucky, saw it, too.

Since Topgolf opened a three-story, 102-bay facility at a shopping mall there in fall 2022, the mall has attracted several new restaurants and attractions. A Puttshack, which offers what it describes as "tech-infused mini golf," recently opened next door.

Wait and see

Topgolf’s CityGate facility is projected to cost $34 million and generate $130 million in wages and tax revenue over 10 years.

Monroe County has pledged tax breaks valued at more than $4 million. Augusta provided no incentives beyond some roadwork.

“I'm normally very skeptical of job numbers and investment numbers because people like to throw out big numbers to get a reaction,” Wray said. “And that doesn't always pan out.

"Here, with Top Golf, it definitely panned out.”

His only complaint is that the Topgolf was undersized.

“I mean, at any point you go to Topgolf on a Thursday, Friday, Saturday night, you’re a two-hour wait,” Wray said. "But that whole area now does have the constant flow of people. ... And really, it's now that destination shopping experience that we all had hoped (for) back in 2008, 2010 when this whole development really started.”

Here, Topgolf looked at Victor and Henrietta, as well as Buffalo, Syracuse and Albany before selecting the site just over the city line in the town of Brighton, Lester said.

“We still do have more to develop,” Lester said. “But with the, you know, with the catalyst of Topgolf and hotel, we're hopeful that should be an easier process.”

CityGate also is filling up the outlying commercial spaces and should soon be fully leased. Costco will be expanding its gas station, adding more pumps.

Long term, Lester and his team plan to clear out and repurpose the old coal-powered steam plant and repair its smokestack, both of which sit unused and fenced off.

“It's currently home to a lot of decommissioned equipment, 30- to 40-feet tall" Lester said. "There's a lot of soot and ash. It's in rough shape. We have to remove it all and clean it up.”

He estimates that price tag will be seven figures. But he describes both structures as iconic, and needing to be preserved. This is where Lester is hopeful that the Topgolf effect helps to push things forward. But it’s going to take a while.

“We've been doing work in upstate New York for over 20 years,” Lester said, “and no matter how much you say it, and whatever the approval is that you get, and whatever the media reports, it still doesn't seem to resonate with everyone until it actually starts to happen.

“So I think once we get a shovel in the ground, then really, we'll see,” he said. “We'll see some momentum with other interest.”

Topgolf looks to open at CityGate in August 2025, o shortly thereafter. The hotel would open by mid-2026.