The Quiet Plan to Save Grand Avenue
Actually written 10 years ago. Civic leaders discuss how public private partnerships revived Downtown.
A panel of civic leaders gathered Monday afternoon to reflect on how a series of public-private partnerships have unlocked the development potential of Downtown. And to my surprise the discussion included a little-discussed article on how turn around the Grand Avenue Mall published by Urban Milwaukee in 2009.
Department of City Development Commissioner Rocky Marcoux kicked off the discussion, hosted by the Greater Milwaukee Committee, with a comprehensive, 15-minute presentation highlighting all of the different downtown projects dating back to the administration of Mayor John Norquist and how the city has worked to shape them.
“This is what we were starting with, a river that had been degraded, polluted and forgotten,” said Marcoux while he showed images of the pre-riverwalk Milwaukee River. The fast-talking commissioner told the audience that plans to beautify the city around the river went back over 100 years, but it was the Milwaukee Metropolitan Sewerage District‘s Deep Tunnel project and upgrading of the Jones Island treatment plant that helped make the river a more appealing place to be. He said that government investment cleared the way for the billions of dollars in development that came next. “The private sector did what it does best, maximize return on investment,” said Marcoux once the city and developer Gary Grunau began investing in the RiverWalk’s formation.
Marcoux said the removal of the elevated Park East freeway spur has also transformed the city into a more equitable and vibrant place. “The racism that exists in our city today was promulgated by the hard decisions made with our physical infrastructure,” said Marcoux of the dividing line between the black residents that live north of the former freeway and the central business district. He said that African-American developer Kalan Haywood‘s redevelopment of the Germania Building signals a changing of the guard.
The commissioner’s whirlwind presentation included a list of other wins for the city, including the 12,000 downtown housing units created since Marcoux’s boss Tom Barrett was first elected in 2004 and the doubling of downtown property values since 2005.
“Our goal has been to facilitate development by others and be a catalyst for the area,” said Chernof. That model has worked to perfection with the Grand Warner Theatre, which the Milwaukee Symphony Orchestra is transforming into a music hall. Chernof’s organization, WAM DC LLC, assembled the land and purchased adjoining parcels to facilitate the $89 million deal.
The organization got another bite at the apple when Interstate Parking’s Tony Janowiec and the Minneapolis-based Hempel Companies bought the mall for $24.5 million in 2015. WAM DC provided some of the capital to acquire the two-block complex.
Then the surprises began. “Nobody wanted to finance it,” said Hempel’s Josh Krsnak of the firm’s ambitious redevelopment plans. “The second biggest surprise was how much community support we received,” said Krsnak of the support from Chernof’s group, Barrett, Marcoux, business leaders like David and Sheldon Lubar and others. He joked that when he bought the building Barrett called Krsnak and Janowiec into his office and expressed concern they would turn it into a strip club. Nope, that wasn’t their intention.
Instead their plan mirrors a story I had written for Urban Milwaukee (“Grand Avenue Mall – A New Implementation“) in March 2009, back when I was an undergrad finishing college at MSOE, and the publication was just getting started and had very low readership. But the story is available online, and Krsnak happened to find it sometime after their plan to revamp the Grand Avenue was formulated.
Telling the audience of business leaders that their plan to save the mall had actually been available online for a decade, he walked the audience point-by-point through my vision of how to redevelop the struggling mall.
Relocate the food court from the third floor to the first floor? Spot on said Krsnak, his firm is doing just that with partner Omar Shaikh and the 3rd Street Market Hall. Use the third floor for office space or a non-retail use? Another apt suggestion, he noted: engineering firm Graef will anchor The Avenue as a third-floor office tenant. Transition the second floor away from retail? Krsnak intends to do just that, using the floor as a new apartment complex, amenity space for tenants and additional office space.
Krsnak, by the way, was not aware the author of this story was in the audience and was surprised to learn that. Nor had I any inkling he was going to be talking about my story.
As for how the transformation of Grand Avenue is going, Krsnak told the audience that things are looking up. The city has committed $9 million via a tax incremental financing district to support the public area’s redevelopment, the apartments are open and Graef is set to move in next month.
Leasing interest is growing and his team continues to acquire properties in the area. The developer said he currently has more lease offers out to prospective tenants than it has space. Approximately 80 percent of the complex is pre-leased.
The development team continues to acquire nearby properties to expand its footprint, including the Matthews Building office complex near the mall’s N. Old World Third St. entrance and the 136 apartments in the Majestic Building above the Walgreens on the former mall’s first floor.
Construction work on the project, including the food hall, is scheduled to be wrapped up by May.
Krsnak, who said they’ve already received offers to sell the mall, told the audience the real estate axiom “you make money when you buy, not when you sell.” And on that, he said they did a good job. When evaluating the value of the Grand Avenue Mall they determined that 1,748-stall parking garage which came with the mall would nearly repay the entire sale price, so that they were really paying just $4 per square foot for the mall.
“I sure hope this spreads into the neighborhoods in a big way,” said Chernof of the downtown development boom.
Lasry said the Bucks continue to work with prospective hotel operators on building a hotel on the Bradley Center site after the 2020 Democratic National Convention.
Kersey told the audience his firm is working on the final pieces of Joseph Zilber‘s vision to redevelop the former Pabst Brewery into a mixed-use neighborhood. “If you listen to what the market tells you, the market will define the project,” said Kersey.
As for me, I’m very happy — and yes, a little proud — that our story helped point the way to how a key part of Downtown could be saved.
Demolition Photos – February 2019
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Read more about Redevelopment of the Grand Avenue Mall here