Bruce Murphy
Murphy’s Law

Great News for Grand Avenue Mall

A smart new team of local owners is poised to revive the mall and W. Wisconsin Ave.

By - Dec 22nd, 2015 11:39 am
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The Shops of Grand Avenue

The Shops of Grand Avenue. Photo from 2011.

It was back in November 2014 that yet another out-of-town business person, Brooklyn real estate investor Alex Levin, bought the Shops of Grand Avenue for $16.5 million in an auction bid. But one of the losers in the bidding process, Milwaukee-based parking lot owner Tony Janowiec, was soon pursuing Levin and offering to buy the mall for more than Levin paid.

Just a week ago, the deal was finally completed, and Janowiec and his two partners in Aggero Group bought the Grand Avenue for $24.5 million. “The community probably is shocked at what we’re paying for this,” Janowiec told the Milwaukee Business Journal.

But Janowiec says he could afford to pay this because he was able to secure a loan (whereas the auction bid required all cash) and because the Grand Avenue is worth that much money for its parking garage alone. “Parking is our speciality,” Janowiec notes, “and we can probably value it higher than anyone else because we understand it so well.”

Right now, the Grand Avenue garage is only 70 percent occupied, and to get to 100 percent Janowiec and his partners are looking to make any deals to bring new tenants and activities to the Grand Avenue Mall. And they are quite confident they can turn the mall around.

“We very much believe a Westown renaissance is coming,” Janowiec says. How can Janowiec’s group succeed where others have failed?

Downtown Ald. Bob Bauman, who has been sour on past owners of the Grand Avenue, is singing a very different tune about Janowiec’s group. “I’m very encouraged,” he says. “I’m impressed with their development savvy. These are people who understand the market, know Milwaukee, know other companies and developers in the area and know City Hall. I’m not sure the last owner was ever here.”

Janowiec, 37, has lived in Milwaukee for more than 10 years and says he “loves the city,” and sees it as a great place to invest his money.

He is a native of Minnesota, from the small town of Breezy Point, two hours north of Twin Cities, who got his business degree from the University of Minnesota. He worked some years with the Imperial Parking company before starting his own company, with one other partner, Doug Hoskin. They owned some parking ramps in the Twin Cities, and the Milwaukee-based Zilber Property Group contacted the two when seeking ways to better manage their own parking lots. This eventually led to a three-way partnership, and the creation of the Interstate Parking company in 2009, which began with eight parking structures in Milwaukee.

Today, Interstate Parking is located in five cities, and operates more than 110 separate facilities with some 24,000 parking spaces in Wisconsin, Minnesota, Indiana and North Dakota. In January, Interstate made a deal with the Charlotte, North Carolina-based company, Passport , which Janowiec believes offers the best mobile platform for payments and handling all details of parking. “We try to do all the the latest technology to make our customers as comfortable as possible.”

“Tony and his partners are really, really smart,” says a local businessman who has observed him in action. “He’s a nationally respected expert on parking.”

Janowiec believes in bringing the best minds aboard on any deals. For the Grand Avenue, he brought on Chuck Biller, an old friend and local developer who worked with Williams Development Corp. when the old Marshall Fields building (then part of Grand Avenue Mall) was redeveloped. “And we were smart enough to know we needed expert help on the retail end.” So they brought on a third partner, Minneapolis-based Hempel Cos., which owns quite a portfolio of properties in Minnesota, including several shopping centers.

The partners decided to retain Mid-America Real Estate as manager of the Grand Avenue. The company is the largest third-party retail property manager in the state.

“We believe we have the dream team here to develop the mall, “ Janowiec says. “And we’re open to more partners.”

His plan for the mall begins with parking, his area of expertise. The garage is a huge asset, with 1,748 parking stalls. When you consider that parking costs at least $25,000 per spot for developers to build, that gives the garage the equivalent of $43.7 million in value, if it’s modernized (Janowiec intends to spend several million on deferred maintenance and improvements) and at capacity. But right now only 70 percent of the spots are sold on a typical day.

Many of those users are workers from east of the river, where parking is in short supply. The skywalks connecting the mall to Water Street make it easy to sell parking to those workers, and Janowiec hopes to increase the number using his huge complex.

Meanwhile, residential development is occurring west of the river, with the Posner Building on N. Plankinton Ave. and W. Wisconsin Ave. being redeveloped for 105 apartments and The Buckler on N. 4th St. and W. Michigan St. redeveloped to add 200 apartments.

Beyond any residents in these buildings, Janowiec estimates his garage could handle parking for another 1,200 residential units. And he notes that many of the older buildings on W. Wisconsin Ave. were built before the 1920s, with no parking. That makes his parking complex a major asset that allows developers to rehab these buildings without the expense of parking, making redevelopment more likely.

“We’re the largest parking operators in the Westown area. We see ourselves as part of the fabric of Downtown.”

As for mall itself, Janowiec says “we have some very successful retailers and a lot doing okay.” The mall is 85 percent occupied, but Janowiec’s team will be making deals to fill all the space. And because parking can potentially pay for the entire complex, he can be flexible about what he charges, to get more people into the mall. “There are so many opportunities we are pursuing with a variety of users,” he says.

But it won’t just be a search for retailers. At a time when online retail is growing and retail stores are declining, “there’s a lot of experts out there who can tell you why that strategy has been difficult, at best,” Janowiec told the Business Journal. He says the mall’s revival may depend on bringing in other users, including educational, entertainment or event spaces.

The food court can be an asset to draw more customers, he adds. About 30,000 people a month cross the skywalk over the Milwaukee River and into Grand Avenue, mostly to grab lunch at the food court. Janowiec wants to find ways to enhance that experience and encourage customers to linger or eat at other times.

Mid-America Real Estate had already worked with architects and designers on ways to modernize the mall’s food court with new seating and televisions. “We want it to be an entertainment oriented space, with expanded dining options, more than fast food,” Janowiec says.

He will also look for areas where the mall can be opened more to the street, to knit it more to the urban fabric.

Milwaukee’s downtown is behind other cities, he notes, but has “all the ingredients for a revival.” He sees West Wisconsin Avenue as the southern edge of new development planned by the Milwaukee Bucks owners, and the eastern edge of an an expanding Marquette University campus.

“The renaissance of this area is coming. It’s got all the ingredients. You’ve got incredible walkability, a lot of interesting architecture, and its only a matter of time before we see an evolution of the convention center. West Wisconsin Avenue was once the heart of this city and a lot of those buildings and those classic old facades still exist. We are on the cusp of a revival.”

30 thoughts on “Murphy’s Law: Great News for Grand Avenue Mall”

  1. MidnightSon says:

    Wow. Janowiec’s saying all the right things and seems to have a strong business sense. Let’s hope he can pull this off.

    I like that it sounds as if he’s not looking to create another “major destination” that relies on tourists and visitors from the suburbs. Not that those groups aren’t important to downtown Milwaukee–they are–but something sustainable needs to be integrated into the rest of the neighborhood.

    I’d love to see more residential development of older commercial buildings–which is happening–and also steps at attracting smaller businesses, performance venues, etc. There has to be a way for the success of the Third Ward (and now, Walker’s Point) to jump the freeway spur.

  2. Peter Zanghi says:

    The Plankinton Arcade could be a great public space if it was returned to its original format, with TJ Maxx moving to a different part of the mall. In some ways I feel that it could rival the beautifully redeveloped Union Station in Denver, minus the transit component of course. The ground level of the arcade should be for lingering, surrounded by shops on the exterior. Since we no longer have either of our train stations, it would be great to see the Plankinton Arcade fill that void of a grand, active interior space downtown (outside of museums) that draws people in and encourages them to stay a while. I would think that would help activate West Wisconsin Ave as much as anything. One can dream, anyway.

  3. beer baron says:

    Pleeeeeeeeeeaasssseee tell me there will be plans to eventually get rid of that monstrous parking structure and implement light rail. Michigan possibly the saddest street in all the city with its endless parade of parking structures. We need to get cars out of downtown in the next 10 years!

  4. Allison says:

    it seems like the whole point of the transaction is the parking structure. That is the one asset in the mall worth keeping. After 10 years the number one food option Culver’s finally threw in the towel-they leave on Sunday

    At some point you have to cut your losses and try something different. grand Avenue has been dead for decades-it’s time to tear it down, keep the parking and try a different use.

  5. Dave Reid says:

    “The mall is 85 percent occupied.”

  6. Will says:

    I feel like the answer to Grand Avenues, as well as much of central Milwaukees foot traffic problems, lie in that vacant eye sore of a lot on 4th and Wisconsin. Lets do a mixed use of apartments, condos, student housing, hotel, and commercial including first floor restaurants, (private school? movie theater? library? racket club? mens club? anything?) partially subsidized by city, county and/or state for low income residents and call it a day. Any reason this can’t be done?

  7. Will says:

    In my dream world 4th and Wisc would be home to Marcus theaters flagship theater with a mid rise hotel and apartments/condos on top with restaurants and arcades and stuff as well. I see a bright marquee on shining onto Wisc. Ave. Now that would be sweet!

  8. M says:

    I second Peter Z.’s thoughts about the Plankinton Arcade. It’s a beautiful space, just waiting to be fully reactivated. I hope the new owners will look to innovate ways to make use of various spaces in different ways.

    As for the parking, the reason parking lots are lucrative is that people still need cars to get to their jobs downtown, etc. While I’m all for trying to get light rail here, we have to live with our car-centric realities in the meantime. But we could bring some form of life to Parking Lot Row (AKA Michigan Street). It’s depressing to drive through and don’t even bother thinking about walking.

    When we manage to get light rail, the city’s whole landscape will change.

  9. M says:

    Whatever gets built on 4th & Wisconsin, having some sort of appealing and useful public space as part of it could be an economic generator for the whole area. Public spaces don’t need to be huge to be valuable, but location is important. That is a prime place for people to gather, whether workers, tourists or residents. Sure there’s Zeidler Square a block over on Michigan and it serves WE Energies employees and hosts farmer’s markets and holiday lights, but it will take much to overcome its location on Parking Lot Row to make it routinely “vibrant.”

    Appealing cities have sequences of parks and plazas and many are modestly sized. It’s a big part of what makes downtowns walkable and livable.

    Most of Downtown’s public spaces are underwhelming. That’s part of its “connectivity” problem. With all the new and rehabbed buildings we could notch up the “public realm,” keeping pace with the Riverwalk, which set a good example.

  10. Cory Broker says:

    Let’s be honest, the mall is not 85% occupied and hasn’t been since about 1993. To suggest this discredits any merit the article might have otherwise had. So, let’s dismiss this delusion as a pipe dream. Next, let’s address the viability of a plan that relies on the food court as the epicenter of excitement to drive foot traffic. This idea of creating new ways to encourage people “to linger” should raise a familiar red flag. The perception that many cite as the demise of Grand Avenue is that people were “lingering” and it wasn’t exactly celebrities that were hanging around the mall.

    Who would these people be that would “hang out” in the food court to watch television? Why would you want this? But forget that for a moment. If this plan is relying on the food court to attract prospective shoppers, why not move it to the first floor NOW while you have vacancies on the first floor of the mall. In fact, the entire first floor of the Plankton building could be opened up to the street if TJ Maxx were relocated. The Plankton’s first floor is currently 50% vacant. It would also give the new owners the opportunity to reverse the poorly received and aesthetically offensive design of the plexiglass visor surrounding the second floor rail. Big box retail was shoe-horned into this ill-conceived and clumsy configuration. It would be far better to leverage the architectural attributes of the mall to create the open air concept that other venues referenced by the new owners have found success.

    Next, how about dividing the mall into three separate parcels. It’s a shame that the Marriott wasn’t a part of the deal, because leveling it would allow the new owners to open Third St. and face retail on the perimeter, and use Third Street as a facade and major point of entry. How about integrating Milwaukee’s heritage into the fabric of the mall? Plunking down another suburban-looking two-tiered mall lined with cookie cutter retailers is not going to work. A Bath & Body Works isn’t going to be a draw for downtown; it could exist side-by-side with vibrant and novel boutique retail and entertainment district. That formula has worked in other areas, yet that does not seem to be the vision the new owners have for The Grand Avenue–at least not according to this article.

    Integrating services like an Express DMV and post office counter (in lieu of closing the counter at the facility on Michigan Ave.), could serve to drive traffic. A satellite police station would provide a sense of security that has long been lacking in this barren mall.

    Finally, the interior of the mall is akin to a camel: a horse built by committee. The latest renovation did little, if anything, to enhance the appearance and connect it to the surrounding downtown area. But an outlay of capital here would be money poorly spent absent of a solid revival plan. Best of luck to the new owners. It sounds like they wanted their parking lot, and that’s exactly what they got.

  11. I don’t get it.

    A guy who is the in the parking business buys the Grand Ave. Mall (which is mostly a parking lot) and will revitalize West Wisconsin Ave., the major problem being it has too much parking.

  12. Grand Avenue was lost when Norquist stopped Potawatomi from moving there.

  13. Marie says:

    Cory, I too doubt that 85% occupancy rate. As others have said, Grand Avenue could be reinvented by continuing to add other uses there big time, especially in the Plankinton Arcade. Forget about attracting suburbanites with retail. They come downtown for special events but not shopping–and probably never will again. Malls all over are being repurposed and reinvented. Only ones in really affluent markets are likely to survive as traditional retail malls with mostly retail and entertainment.

    http://www.costar.com/News/Article/The-De-Malling-of-America-Whats-Next-for-Hundreds-of-Outmoded-Malls-/141980

    Tom, it’s Michigan Street that has little going on besides parking structures, not Wisconsin.

    As for the casino, urban planner Brent Ryan wrote in his book “Design After Decline” that Milwaukee was either smart or lucky that Potawatomi located in the valley where it could sprawl without becoming another downtown “metastasizing mega-project.” He says casinos don’t revitalize downtowns–they just eat up the traditional urban fabric.

  14. Vincent Hanna says:

    I was at the mall on Friday night for the Jingle Bus. Walking through most of it, it looked more like an 85% in-occupancy rate.

  15. Rich says:

    I too did a double take on the 85% figure. While the mostly public spaces of the mall belie that figure, I believe — just maybe — if you count the entire square footage of the property involved in the transaction (including UWM and YMCA [as long as they last], offices and other apartments on upper floors) you could get the 85% occupancy rate.

  16. Dave Reid says:

    @Tom The interesting thing about the new owner’s comments about parking is he indicated the idea was to better utilizes the existing parking garage so that development / redevelopment of buildings in the area could occur without the need to build new parking. This is great thinking. (Reminds me of what NM wanted to do with O’Donnell Garage).

  17. Marie says:

    “UWM and YMCA [as long as they last]…”

    Rich, is that based on any intel or just concern? I thought the idea of these other institutional “anchors” was that they are not dependent on retail traffic and therefore more stable tenants. They also potentially increase retail traffic.

  18. M says:

    Dave, I agree with potential to make greater use of existing parking at GA (along with other uses).

    However, O’Donnell Park’s garage (despite need for updated payment systems and such) was and is operating above capacity for monthly renters. This county audit says it has about 165 on a waiting list. O’Donnell also provides 60% of the art museum’s parking and most of Betty Brinn’s. The NML deal was about future redevelopment of the site, which is how the contract was written, as opposed to public assertions.

    http://media.jrn.com/documents/odonnellaudit.pdf

  19. Allison says:

    I guess I’m also a bit skeptical of the 85% occupied comment.

    I don’t have the data to back up my skepticism and i could certainly be wrong, but I eat at the mall a couple times a week for the past few years (more in the winter, less in the summer). So many spaces have been vacant for years (linens, chocolate factory, etc). Walking the mall a few times a week just seems like so much turnover and emptiness. It is a sad and depressing place and at some point you just have to pull the plug and try something new. Some good ideas above

  20. Rich says:

    I have no reason to suspect UWM would depart, but YMCA’s financial troubles in general over the past year have been well documented. Moving out of Grand Avenue was noted here: http://www.bizjournals.com/milwaukee/blog/2014/06/ymca-considered-closing-its-grand-avenue-location.html I recall seeing an update on this in a 2015 news article, but can’t seem to locate it off hand.

  21. Marie says:

    This article says that despite the widespread decline of traditional malls, most are being re-purposed rather than being torn down. It sounds like the new owners may be viewing these four blocks as real estate with redevelopment potential and not primarily as a retail mall.

    http://www.costar.com/News/Article/When-Retail-Wont-Work-Alternative-Uses-for-Converting-Former-Ghost-Malls-Back-Into-Income-Producing-Property/14228

    Rich, thanks for the link about the Y.

  22. Phil Man says:

    There’s a promising side to what Janoweic is saying about his plans, but how promising? It’s definitely a refreshing change to have the Grand in the hands of a well-financed investor who knows the local market and is bullish on downtown. But Janoweic knows parking first and foremost. He’s banking on filling up the mall parking deck with daily parkers from nearby office buildings. Conceivably, the retail spaces could continue to eke along and he’d still do OK.

    Let’s hope he’s inspired by the challenge of building a new vision for the retail and public spaces he’s acquired. Maybe something authentic to downtown but open-air like Bayshore. It could be a stimulating new direction for Hempel Companies as well, whose portfolio focuses on strip centers with tenants such as medical clinics and Subway.

    Finally, aren’t those who speak with defeatism about West Wisconsin retail overlooking the pretty robust trade that TJ Maxx seems to do on the street? I go there every few months and always stand in line when checking out. Yes, Old Navy fizzled but it was buried inside the moribund mall. I’d think that discount or outlet retailers such as Filene’s Basement, Nike Clearance Center or even Nordstrom’s Rack could be naturals for the Plankinton Arcade space formerly occupied by Linen’s & Things. Even better, these retailers could migrate to underused ground-floor areas west of 2nd St. such as the former Woolworth’s-Office Max space, leaving the Plankinton Arcade to be reimagined as a playground of dining, drinking, game-playing and architectural marveling like the fantastic Chicago Athletic Association.

  23. Tom D says:

    The 85% occupancy figure may include the upper floors (like the YMCA).

  24. M says:

    The YMCA’s plan to sell their space and move east of the river seems curious after they bought the space and spent $7-plus million to renovate it. But they know their own biz. A gym still seems like a natural fit with new residences being built in the neighborhood.

    The 85% figure probably does include all floors. But too many empty storefronts creates a negative perception, as some have noted. And that’s often worse in a mall setting.

    I’ve heard there are high vacancy rates for all types of retail space downtown. Anyone have current data?

  25. The 85% figure is a little misleading apart from what they are paying per/square/foot.

    I was in the mall recently and it has a post apopalytic feeling. Good for the movies but maybe not downtown.

  26. Phil says:

    Love your vision, John Hagedorn. Just think how great things could be if the casino and strip club had BOTH been approved for Westown!

  27. Stephen Dragos says:

    I ran the Milwaukee Redevelopment Corp from 1974 through 1984 and it was the private sector leadership of Milwaukee that envisioned, funded and built The Grand Avenue in 1982. We partnered with the City of Milwaukee which made major investments in the parking and public infrastructure, when much of downtown Milwaukee was flat on its back..

    Two things worth noting: we planned for a 15 year operating horizon for The Grand Avenue as originally built to keep Gimbels and the Boston Store downtown and to begin the revitalization of downtown Milwaukee’s commercial spaces; and, we took a derelict historic building which was rotting away and restored it to the architectural treasure that it originally was.

    If anyone thinks that parts of the west side real estate look tawdry today, you should have seen that area in 1980 before The Grand Avenue opened.

    That 15 year horizon ended in the 20th century, and by all accounts downtown Milwaukee’s marvelous renaissance can be marked from the opening of The Grand Avenue. I believe that given time, energy, creativity and resources, there are solutions to all urban problems, and I rely on the private sector to imagine those solutions and carry them out.

    Downtown Milwaukee today is one of the nation’s great and livable places, and the Plankinton Arcade deserves a chance to be part of the downtown of the future.

  28. wisconsin conservative digest says:

    This is great news, this has to be one of the worst run retail operations in history just like most of Milwaukee.

  29. Sean says:

    I don’t believe the YMCA and UWM are actually tenants of the “Mall.” There are several owners in the complex space of the mall. Boston store controls their building and so does the Marriott. The apartments are also not part of the Mall ownership. Unfortunately none of these entities work together or play nice with each other so there is a major rift in the complex as a whole practice. It really would benefit if it was managed like a condo association with regular meeting. The way I see this is Mr. Janowiec, purchased a parking structure that comes with a run down mall.

  30. M says:

    From the Journal Sentinel: “According to state real estate records, the parking structure was sold to Milwaukee Parking JV Owner 1 LLC for $23.1 million. The retail space was sold to Haggeros Mall LLC for $1.5 million. The new principal owners have shares of both groups.”

    That’s a pretty steep difference between the value of the parking and the mall. It seems the mall’s value can only go up.

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