Rewind back to 2015 in downtown Milwaukee: The Bucks are in their first season under new ownership, a group of New York hedge-fund billionaires with lofty ambitions. The Milwaukee Symphony Orchestra is quietly planning a massive fundraising campaign to make the long-vacant Warner Grand Theatre its new home. The Wisconsin Center needs to be expanded, but funding hasn’t yet been secured to bring those plans to fruition. And the Shops at Grand Avenue has seen better days.
The decline of the Westown neighborhood tarnished the reputation of the urban mall, which was developed in 1982 by The Rouse Company and renovated by Northwestern Mutual in 2004.
In its heyday, Grand Avenue was considered the jewel of downtown. But when suburbanites opted for malls closer to home, numerous tenants including Marshall Fields exited and later Boston Store went out of business. The rise of e-commerce over the past two decades has been the nail in the coffin for many malls and brick-and-mortar retailers across the country.
By 2015 the 293,600-square-foot downtown mall was largely vacant and virtually empty on nights and weekends. Numerous attempts to revitalize Grand Avenue had failed.
So, when in December of that year an investor team led by Tony Janowiec, president of Interstate Development Partners, and Josh Krsnak, president of Minneapolis-based commercial real estate development firm Hempel Cos., purchased the mall and its attached parking structure, few had high hopes for a turnaround.
“At the time, Westown still had a negative reputation that sort of stuck with it since the late ‘90s,” said Janowiec, who is also president and chief manager at Milwaukee-based Interstate Development Partners. “Twenty years of baggage came with the Grand Avenue Mall, and neither Josh nor I quite had the history here in the city to fully understand the gravity of that.”
Fast forward seven years, and the mall’s main entrance at West Wisconsin Avenue and North Dr. Martin Luther King Drive (formerly Old World Third Street) is now almost unrecognizable compared to its original appearance.
After their initial purchase, Janowiec and Krsnak acquired an additional 300,000 square feet of adjacent real estate to create what’s now known as The Avenue, a 750,000-sqaure-foot mixed-use project spanning 3.5 city blocks on West Wisconsin Avenue. It includes 200,000 square feet of open-concept office space, 200 residential units and plush amenities.
The Avenue’s main attraction is a food and entertainment venue known as 3rd Street Market Hall. It features a 50-seat central bar surrounded by vendor stalls and free activities like shuffleboard, snookball, cornhole and old-school arcade games. For an added cost, visitors can reserve a Topgolf Swing Suite or visit the Photoverse selfie museum, a creation of the Milwaukee Institute of Art & Design. Soon, MIAD will open an art gallery inside the food hall’s main entrance to showcase and sell works by students, alumni, faculty and staff.
3rd Street Market Hall opened its doors in January after months of pandemic-related delays. At full capacity, it will house as many as 27 local food and retail tenants, drawing an estimated 1 million visitors annually, said Krsnak.
As of mid-April, operations hover around 30% with 11 vendors open. Getting to full capacity will take some time, but, on Saturday afternoons, the scene is reminiscent of the buzz that once filled the former mall.
“There are families with kids running around, and the kids don’t want to leave so mom and dad get another beverage from the bar or buy more food. … There’s a line of 30 people waiting to play bags and, in the evening, people are three deep around the bar for happy hour,” said Janowiec.
That scene is just how Janowiec and Krsnak originally envisioned it.
The capstone to a larger revitalization of Milwaukee’s surrounding Westown neighborhood, The Avenue is now poised to help draw more people to the city’s center, provide entertainment for out-of-town visitors and create more reasons for workers of downtown employers to come back to the office.[gallery columns="2" size="full" ids="547088,547092"]
The connecting piece
Minnesota natives, Janowiec and Krsnak became friends in business school at the University of Minnesota. Janowiec started Interstate Parking Co. in 2009 in Milwaukee. Krsnak helped found Hempel Cos. in 2001 in the Twin Cities, and acquired the company 13 years later.
Having grown up out of state, the duo didn’t see the Grand Avenue in 2015 as an albatross, unlike many local developers and city leaders. Instead, it was a “series of phenomenal historic buildings that had the bones of what should be the most prolific mixed-use development in the city,” said Janowiec.
But, not one Wisconsin-based lender was initially willing to back yet another vision trying to breathe new life into the troubled property.
“It wasn’t the project, it was the affiliation with the poisonous history of the Grand Avenue Mall,” Janowiec said.
Originally, Janowiec’s primary interest in The Shops of Grand Avenue was its 1,850-stall parking garage, which he purchased along with the mall in December 2018 for $24.5 million.
But noticing early signs of Westown’s renaissance, the developers soon realized they had hit the location jackpot.
Grand Avenue was surrounded by economic activity and new development. There was the Historic Third Ward, the Intermodal Station and the start of the streetcar project to the south; the Wisconsin Center and a new sports and entertainment arena being built to the north; and Marquette University to the west. Plus, the mall was connected to downtown’s skywalk system, bridging office buildings on either side of the Milwaukee River.
“We were effectively sitting at the epicenter, what we refer to fondly as the ‘donut hole of progress,’ and we now had control of that,” said Janowiec. “Being literally at the original Main and Main of the city – which were Plankinton and Wisconsin avenues – we realized that we were the connector project.”
Focusing on what surrounded the mall – rather than what had gone wrong inside its walls – the developers mapped out a plan to return the three-block strip along West Wisconsin Avenue to its roots as the city’s main artery.[gallery columns="1" size="full" td_select_gallery_slide="slide" ids="547091,547095,547094"]
A “grand” vision
Bringing more people into the Westown neighborhood was first priority. The group in 2017 converted the second floor of the eastern Plankinton Arcade building into the 54-unit Plankinton Clover apartments. In keeping with the mall’s original layout, about 15 units have entrances from the atrium through private, glass-enclosed porches designed to look like historic storefronts. The apartments are currently 100% occupied, with a waiting list.
In 2019, they purchased the 14-story Majestic Building and redeveloped its Majestic Loft Apartments into the 148-unit Playbill Flats. Since opening in March, the project has filled up faster than expected, said Janowiec. As of early April, occupancy was about 70%.
With increased daytime activity as the next objective, the group developed 200,000 square feet of open-concept office space on the second and third floors of the west Arcade building. GRAEF-USA Inc. was the first tenant to commit. The Milwaukee-based engineering firm relocated its headquarters to a 35,000-square-foot space on the third floor while heading the office development project.
Converting a 1980s suburban-style enclosed mall – with inward-facing design – was not without its challenges.
“We had to get pretty creative as to how we opened up that building,” said Janowiec. “We found a way to do that by installing dozens and dozens of massive windows and additional skylights to bring light into the space.”
Finally, the project needed an anchor to tie it all together. The developers enlisted the help of Omar Shaikh, a well-connected restaurateur and owner of Milwaukee upscale steakhouse Carnevor, to develop a 35,000-square-foot food hall that would act as a “magnet” to people of all ages while celebrating Milwaukee’s diverse heritage through food, said Janowiec.[gallery columns="2" size="full" ids="547093,547086"]
Food hall university
Since full-scale plans for Grand Avenue’s revitalization and its new moniker were announced in late 2018, Shaikh and Krsnak have visited about 70 food halls across the U.S. – including the iconic Chelsea Market in New York City and Ponce City Market in Atlanta – to glean inspiration and learn the ins and outs of the business.
“We did a lot of behind-the-scenes tours,” said Krsnak. “They would just pull up the curtain and say, ‘Here’s everything.’ We learned a ton that way.”
3rd Street Market Hall was nearly ready to open when the COVID-19 pandemic hit. Almost all of its original vendors pulled out of the project, opting to spend capital reserves on keeping their existing establishments afloat. So, 3rd Street Market Hall was back at square one and the task of finding all new vendors seemed daunting as the pandemic lingered.
“We started calling around to other food halls in the country and asking what (they were doing),” said Shaikh. “What we found out is that they were actually funding the buildout for the tenants.”
3rd Street Market Hall followed suit, in exchange for higher percentage rent from some tenants. One silver lining of the pandemic was more time for R&D and brainstorming new ideas, such as the selfie museum and Topgolf simulators, which were not part of the original plan but have turned out to be popular attractions – and internal revenue generators.
Between the vendor-stall buildouts, $750,000 worth of added amenities and rising raw material costs, the developers found themselves about $3 million short of completing the project. In June 2021, they secured a $2 million loan from the Milwaukee Economic Development Corp., followed by additional backing from some big-name investors like current and former Milwaukee Brewers Christian Yelich and Jonathan Lucroy and Green Bay Packers wide receiver Randall Cobb. Yelich and former Milwaukee Brewer Ryan Braun also invested in the project pre-pandemic.
The investments in added amenities and buildout are among the selling points of the food hall’s business model, which offers restauranteurs a lower-cost, lower-risk option of starting or scaling their business. Vendors at 3rd Street Market Hall pay 25% of their sales in rent, and they’re responsible for supplying their own equipment.
“What we’re explaining to a lot of our vendors here is there’s millions of dollars spent on infrastructure in areas that we don’t make money from. There’s no revenue associated with shuffleboard or snook ball: that’s given away to draw people here,” said Shaikh.
Tenants can also take advantage of business resources they might not otherwise have access to. The food hall recently purchased a high-tech software system vendors can use to maximize sales and decrease labor costs by tracking customer traffic patterns over time, said Krsnak.
“It’ll look at things as simple as what the weather was last year, verses what the weather is this year and how that impacts sales,” he said. “Or if you did this much in sales on a Bucks game (night) and there’s a Bucks game coming up, you’ll know how to staff up correctly.”
There’s also the benefit of collaborating and troubleshooting with other restauranteurs under one roof, said Laura Maigatter, co-owner of Hot Dish Pantry. The concept sells scratch-made perogies and other comfort food from one of four hawker stalls managed by Dairyland Old-Fashioned Frozen Custard & Hamburgers.
Maigatter and co-owner Nathan Heck are no strangers to the restaurant business, having worked in the local dining scene for years, but this experience is new to them as it is to most vendors at 3rd Street Market Hall.
“We’re the guinea pigs, we’re the first ones here,” she said. “There’s going to be stuff that we have to figure out that’ll apply to other vendors when they open in this space.”
Figuring things out under the guidance of fellow industry veterans Kurt Fogle, Brent Fogle, Katie Fogle and Joe McCormick, co-owners of Dairyland, is a huge perk, Maigatter said.
Dairyland launched as a curbside operation and mobile food trailer during the pandemic. When the burger joint and its offshoot Mid-Way Bakery signed on as 3rd Street Market Hall’s first post-pandemic tenants, management of the incubator-style hawker stalls was part of a deal to offset its financial commitment.
“We figured out how we could open two concepts of our own but also help lower the hurdle for a chef with a great idea for a concept, a space where they could really reduce the risk,” said Kurt Fogle, former corporate pastry chef at SURG Restaurant Group. “It’s a giant leap to open your own restaurant and it’s what prevents really talented people from getting to do this.”
With a fully equipped shared kitchen and a wealth of institutional knowledge at their disposal, hawker tenants get somewhat of a crash course in business – from establishing brand image to navigating the city’s licensing process – with the goal of moving into one of the 3rd Street Market Hall’s full-size stalls or setting off on their own once their year lease is up.
Meanwhile, Dairyland saw sales quadruple in the first 12 weeks at 3rd Street Market Hall, which wouldn’t be possible without risking it all on something many believed would fail.
“That’s the idea of an early adopter,” said Joe McCormick. “We all believed in this project from the very beginning and knew it would come around and that this would be an awesome, transformative place for the city.”[gallery columns="2" size="full" ids="547090,547087"]
Office of the future
In 2016, John Kissinger, chief executive officer at GRAEF, and Pat Kressin, vice president of business development, toured The Shops at Grand Avenue as they searched for a new headquarters location for its 170 Milwaukee-based employees. The firm was looking for an “office of the future,” equipped with flexible and collaborative workspaces, amenities and a central downtown location to attract talent. Its previous headquarters were at the Honey Creek Corporate Center office complex on the city’s west side.
“Because GRAEF had worked on the Grand Avenue Mall back in the ‘80s, our ability to come in and be the anchor tenant to help revitalize a project in Westown was a great story for GRAEF as well as Westown,” said Kressin.
At the company’s new office space, an outdoor patio overlooks the intersection of West Wisconsin Avenue and North King Drive. Inside, natural light pours in from the skylights and floor-to-ceiling windows, and there’s a balcony offering views of the other offices and food hall below. The mall’s original elevator was kept in service, giving office tenants private access to 3rd Street Market Hall. Employees also have free rein of the building amenities, such as a private fitness center, pickleball courts, indoor dog park, free structure parking and a shared conference area.
GRAEF’s new hybrid work policy requires employees to come into the office three days a week, but most people are coming in more frequently, Kressin said, and the new location has something to do with that.
“What we’re finding from new hires or recruits is that they love the fact that we’re a part of something bigger,” he said. “They love that they can look down and see the food hall and the (Metropolitan Milwaukee Association of Commerce) and where Good Karma Brands is building their space. They’re part of something more, we’re not just in an office building anymore,” he said.
MMAC occupies 13,000 square feet on the second floor.
Meanwhile, Good Karma Brands’ radio stations AM 620/FM 103.3 WTMJ, ESPN radio FM 94.5 WKTI and FM 101.7 The Truth will be on air by early fall from its new studios adjacent to 3rd Street Market Hall. It will have an interior-facing window where people can get a look inside Good Karma’s 24-hour newsroom. Good Karma’s corporate offices will relocate to The Avenue by early summer from the Radio City building on East Capitol Drive.
In February, Herzing University moved its office headquarters from Menomonee Falls to 22,000 square feet on the second floor.
While the layout of a traditional mall is architecturally limiting in many ways, it’s versatile in others. For example, the footprint is more expansive than most downtown office buildings, which has helped lure tenants like GRAEF, Good Karma Brands and Herzing from outside of downtown.
“We’re able to offer a suburban-size floor plate within the central business district and that is almost unheard of,” said Janowiec. “We can do 30,000 to 40,000 square feet or more on the same floor when we’d typically require you to be a multi-floor tenant.”
With no shortage of square footage, Janowiec and Krsnak have sought to fill the space with amenities that most downtown apartment and office dwellers don’t have. The latest additions are a podcast studio and a movie theater, which is currently under construction in the lower level of the Majestic Building.
“When you get the building for almost free, then you get to do things that otherwise wouldn’t economically make sense,” said Krsnak.
The food hall is one of those things. Shaikh said he has yet to visit a food hall that offers what 3rd Street Market Hall does. And they’re only just getting started. Krsnak said the group will be making tweaks for years to come.
“Look at Chelsea Market: it took 20 years to become what it is,” he said.
A boon for Westown
In the time The Avenue project has come alive – to the tune of $150 million and 750,000 square feet – the surrounding Westown neighborhood has seen a transformation of its own. Fiserv Forum, the Deer District and the new Bradley Symphony Center have drawn people back downtown during a time when local businesses needed it most in the wake of the pandemic.
Milwaukee Tool plans to eventually bring as many as 2,000 employees to the office building it’s redeveloping at 501 W. Michigan St.
What’s more, the Wisconsin Center’s ongoing $420 million expansion is expected to boost local tourism business and sharpen Milwaukee’s competitive edge in attracting conventions and events against same-size metros. When it comes to standing out among the rest, The Avenue project is another feather in the city’s cap, said Marty Brooks, chief executive officer at the Wisconsin Center District.
“As (3rd Street Market Hall) is getting more activated, it’s providing more food and drink options and entertainment options for people to make more of their stay,” said Brooks. “On one hand, we have a job to get people downtown, the next job is how do we keep people downtown and give them things that they want to come back for.”
In its opening months, 3rd Street Market Hall has drawn customers not only from Milwaukee’s suburbs, but also from as far away as Appleton and Madison. Some of its busiest days so far were during the Badger Region Championships, which brought thousands of youth volleyball players and their families from across the state to the Wisconsin Center for three consecutive weekends of tournament play. Some families came back to Dairyland every weekend to get their fix of house-made custard or cheese curds.
Brooks sees 3rd Street Market Hall as a step in the right direction for Westown and hopes it will spark further economic growth: The next item on his wish list for the area is a full-service supermarket.
But ultimately, what determines the long-term success of The Avenue project and reinvigoration of the neighborhood is people finding their way back to it, said Janowiec
“There’s probably still some (portion) of the region as a whole that hasn’t come to Westown for, say, more than five years,” he said. “If I could just wave a wand to get people from the region and across the greater metro area to, when they’re here, find a reason (to visit Westown). It’s not the Westown of five, ten years ago. … Once they experience it, they’re going to come back again and again.”