$9 Million for Grand Avenue Replacement
Redevelopment Authority approves TIF district to support The Avenue's public areas.
The $92 million redevelopment of the former Shops of Grand Avenue mall continues to move forward. The old mall’s eastern half — the old Plankinton Arcade — is now the Plankinton Clover Apartments and the western half is being turned into The Avenue.
And to help the latter along, the Redevelopment Authority of the City of Milwaukee today unanimously approved the creation of a $9 million, developer-financed tax-incremental financing (TIF) district. The funds would go towards an estimated $13 million in costs associated with building a new plaza at the intersection of N. Old World Third St. and W. Wisconsin Ave. and relocating a large portion of the public skywalk to the building’s first floor.
The Avenue’s owners, Hempl Companies and Interstate Parking, announced in December that engineering firm GRAEF will anchor the office space being created in the former food court. The 3rd Street Market Hall, planned to be the region’s largest food hall, will occupy the first floor.
Instead of providing the cash upfront to the developer, the TIF district would rebate up to $9 million, plus 5.5 percent interest, to the developers via increased property tax revenue. The use of developer-financed TIF districts has become favored by the city as it transfers risk from the city to the developer and avoids costs associated with upfront borrowing.
Interstate Parking president Tony Janowiec walked the commission through the redevelopment plans. His group, since acquiring the mall and attached parking garage in 2015, has continued to expand its footprint in the area by acquiring the adjacent Matthews Building and ASQ Center in recent years.
“With no public assistance, we’ve already invested and created what’s going to be a substantial increment in the Plankinton building and that’s going to pay off the developer-financed tax increment loan,” said Janowiec.
“Half the project’s already done; It just hasn’t had the assessment placed on it yet,” said Janowiec of the recently-completed Plankinton apartments, which he said are outperforming expectations and 40 percent leased. “Then you cross 2nd Street. This is a much more complicated building.”
To accommodate the office tenants, the second-floor walkway through the mall’s newer half will be relocated to the first floor. Escalators near the skywalk over N. 2nd St. will be removed, replaced by a grand staircase. The existing skyway will continue to run to the parking garage and an elevator. The first-floor walkway, open to the public, will run through the food hall before running into the former Boston Store building (now Hub 640). There it will return to the second story via another staircase and elevator. Janowiec’s group, which doesn’t own Hub 640, is required to maintain the public access way as part of an easement on the property.
The project’s lead architect, Chris Socha of TKWA UrbanLab, described the vision for the revamped plaza to the authority’s board. “We see this as a project that’s really complementing all the really great urban things that are happening in Westown,” said Socha. The architect said the towering sign planned for The Avenue’s main entrance would draw people down N. Old World Third St. from the area near Fiserv Forum towards the complex.
A large glass lobby, built in 2001 as part of an earlier redevelopment of the mall, would be removed. Also gone would be the steps and associated ramps that prevent a unified use of the plaza. Janowiec said the changes would almost triple the size of the plaza. “We think it’s going to be a really vital, urban place for the city,” said Socha. “What is kind of a glass impediment today is going to become a welcome mat.”
A general contractor for the project has yet to be selected. Janowiec told the authority board that the firm has a bidding process currently between three firms.
Demolition work is currently underway on much of the former mall, which is currently closed to the public. Originally built in 1982, the mall was formed by filling in N. Old World Third St. between W. Michigan St. and W. Wisocnsin Ave. with a new three-story structure and linking it with the Plankinton Arcade building. The city has already created two TIF districts (1997, 2001) to support redevelopment of the mall or attached properties, but Casanova said both districts could pay off their remaining debt this year and be closed.
The new district would have a base value of $36.4 million, formed from the assessment of the 21 properties (many of which are condominiums) that make up the mall complex. Existing property tax revenue, once the earlier districts are closed, would flow to the local property taxing entities.
Casanova said the district has the support of his department, while noting its dire recent history. “In context, three or four years ago we were looking at issuing $20 million in bonds and potentially owning the whole mall,” said the city financing expert. The city, as part of a group of local stakeholders, had bid on the mall when it was up for auction in 2014, but ultimately walked away after the price rose higher than expected. The auction winner held the mall just one year, before selling to Janowiec’s group, which brought a bold new vision to a long-dying area of Downtown.
Because the new TIF district is greater than $1 million, the general contractor will be required to have 40 percent of the project’s work hours performed by unemployed or under-employed city residents. Twenty-five percent of the project’s costs will be required to go to city-certified Small Business Enterprises.
The TIF district is still subject to approval by the Common Council.
Demolition Photos – February 2019
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Read more about Redevelopment of the Grand Avenue Mall here