The new owners of the Shops of Grand Avenue would like to partner with an educational institution or a corporation that could occupy space in a mixed use redevelopment of the struggling downtown mall.
Joshua Krsnak, president of Minneapolis-based Hempel Cos., which is part of the group that recently bought the mall, said turning it around will take several approaches, and more than just retail.
“You’ve got to change the genetic make-up of the mall and bring in more complimentary uses, versus trying to put in six Subways,” Krsnak said. “We’ve got to stop trying to keep it exactly the same way it’s always been, because then, we just get what we’ve always got.”
In mid-December, a group assembled by Krsnak’s college buddy, Tony Janowiec, principal of Milwaukee-based Interstate Parking Co., purchased Grand Avenue for $24.5 million. For the deal, Janowiec put together a buyer team that included Hempel and Chuck Biller, a local developer with Williams Development Corp.
The new owners are in negotiations with Ross Dress for Less for 25,000 square feet of space across from TJ Maxx, but that is the only new retail tenant they have revealed. They are also exploring other options, including a craft brewery, Krsnak said.
Krsnak is also very open to the idea of a corporate tenant or creating office space on the mall’s upper levels.
“We’ve talked a fair amount about office space, and there are ways within the floor plate for a large corporate user – I like that, it brings a lot of people to the mall,” Krsnak said, adding that if a portion of the mall were to be converted to office space, retail could be consolidated into a compact area.
As far as an educational use, Krsnak pointed to his hometown of Rochester, Minn., which revamped the Galleria Mall about five years ago and turned it into The Shops at University Square. The mall is now located underneath the University of Minnesota Rochester and is connected by skywalks to Rochester’s DoubleTree hotel and a Hilton Garden Inn.
“Now the mall is thriving with strong retail on the first floor,” Krsnak said. “I would love to start having conversations with the local colleges around town.”
In fall 2014, local nonprofit group WAM DC LLC, which stands for The Wisconsin Avenue Milwaukee Development Corp. Limited Liability Co., said they were interested in buying the mall and converting a portion of the Plankinton Arcade into space for local colleges and universities.
Instead, the mall was purchased during on online auction in November 2014 by Brooklyn real estate investor Alex Levin, which recently sold the mall to the group led by Janowiec.
According to Hempel’s website, the company specializes in the purchase and redevelopment of both downtown office buildings and suburban strip retail properties in the Minneapolis-St. Paul area.
Within 12 days of closing on the Grand Avenue deal, Hempel closed on a portfolio of 28 strip malls in the Minneapolis area. Grand Avenue is Hempel’s first property in Wisconsin.
When the buyers purchased the mall, they bought it as two separate entities, the parking structure and the mall itself, to have the flexibility to be able to sell-off portions of the real estate in the future.
Krsnak said since the sale, he has already been approached by a local person interested in purchasing a portion of the Plankinton building, but the new ownersihp group refused that offer.
“Nothing has struck our interest yet, but this gives us an opportunity to be flexible and creative,” he said. “We can be owners, sellers, landlords, anything.”
The new owners of the Grand Avenue hope other development in the area, including several apartment developments, will provide a boost to the mall. In addition, a site near the mall was sold recently for a hotel development.
