The Shops of Grand Avenue in downtown Milwaukee. Credit: Michael Sears

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Downtown Milwaukee's underused Grand Avenue mall hopes to attract a grocery store and a major office tenant as part of its new redevelopment plan, one of the mall's owners said Wednesday.

There are several prospective grocery operators in conversations about a possible Grand Avenue store, said Tony Janowiec, a principal owner at both Interstate Parking Co. and Aggero Group LLC.

Those possible grocery operators, whom he did not identify, are attracted in part because the mall's owners can offer free parking for their customers, Janowiec said. The mall's parking structure has 1,748 spaces, with many of those spaces used by downtown office employees.

Janowiec and his partners have been meeting with people who live near the Grand Avenue. That includes residents of the new Buckler and MKE Lofts apartments, both of which have opened near the mall since last fall.

Their No. 1 request, by far, is for a grocery store, Janowiec said during a roundtable discussion at the International Council of Shopping Centers/Commercial Association of Realtors Wisconsin's 2015 Wisconsin Retail Conference.

He said many of those new downtown residents are millennials, sometimes defined as people born from 1981 through 1996. And they also are interested in other new retail, including sit-down restaurants, Janowiec said.

The right type of retail works at the Grand Avenue, he said, citing the success of T.J. Maxx in drawing people from beyond downtown.

Also, negotiations continue "very, very slowly" for a possible lease with Ross Dress for Less, Janowiec said.

Ross, which would lease almost 30,000 square feet at the former Linens 'n Things space in the mall's Plankinton Arcade, is among the nation's largest off-price clothing and home fashion chains. The Dublin, Calif.-based retailer is opening other Milwaukee-area stores and would be next to T.J. Maxx.

Meanwhile, the mall's food court could be converted into a more modern "food hub," similar to those found in Nashville, Tenn., Portland, Ore., and other cities, he said.

But there isn't enough demand for stores and restaurants to fill the mall's numerous vacancies, Janowiec said.

So, the first likely step in the Grand Avenue's redevelopment will be converting a substantial portion of its roughly 300,000 square feet into offices, he said.

There are prospective tenants looking for 40,000 to 120,000 square feet of office space in the downtown area, Janowiec said.

The Grand Avenue's owners have hopes of landing one anchor tenant that would use perhaps 80,000 to 120,000 square feet.

One office tenant known to be considering downtown is Master Lock Co., which now has its headquarters in Oak Creek. That company hasn't yet announced whether it will relocate.

Landing a major office tenant would help reduce the Grand Avenue's retail space to a more sustainable amount, Janowiec said.

It also would create hundreds of new customers for the Grand Avenue's restaurants and stores, he said.

Details on the redevelopment plans are to be released Monday.

Two investor groups led by Aggero and Interstate Parking bought the mall, including its parking structure, in December for $24.6 million. The principals include Janowiec, Chuck Biller of Aggero Group and Josh Krsnak, president of Minneapolis-based Hempel Cos.

Janowiec said the initial interest was the parking structure, which accounts for $23.1 million of the purchase price. The retail space in the Plankinton Arcade and the newer West Arcade were afterthoughts, he said.

"We had no idea what we would do when we bought the building," said Janowiec, whose firms own or operate several parking structures in Milwaukee and elsewhere. "It's a very complex building."

Hempel Cos. operates office and retail properties in the Twin Cities.

Some of the ideas initially considered for the Grand Avenue included a climbing wall and a craft brewery.

The mall has been in a "purgatory" state for several years under previous owners, including a period when it was controlled by a receiver, Janowiec said. He said that has hurt development prospects on W. Wisconsin Ave.

The 293,596-square-foot mall opened in 1982. But, after roughly 10 years, sales began declining as the Grand Avenue's retailers opened additional stores at suburban malls, and customers shifted to locations closer to their homes.

By 2009, amid a deep recession, the Grand Avenue was half empty after several large tenants, including Linens 'n Things and Old Navy, moved out.

However, downtown's west side, known as Westown, is now reviving, Janowiec said, citing such developments as new apartments, the Marquette University Athletic Performance Research Center and the future Milwaukee Bucks arena.

The Grand Avenue is in the center of that activity, he said.

"This is really a story about Westown," Janowiec said. "Not the Grand Avenue."

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