Great News for Grand Avenue Mall
A smart new team of local owners is poised to revive the mall and W. Wisconsin Ave.
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.”
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.
“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.”