by Sean Ryan, Milwaukee Business Journal

This year, restaurants in The Shops of Grand Avenue’s food court will move to the downtown Milwaukee mall’s first floor, making way for contractors to start building office space.

Transforming that top-level food court into modern office space is among the redevelopment plans announced in April 2016 for the Grand Avenue. Although the Grand Avenue’s owners have been working behind the scenes to realize that vision, the physical mall itself has remained mostly unchanged.

Tony Janowiec, part of the Grand Avenue ownership group, said that could change in mid-2017, when construction may begin on several parts of the redevelopment. West Wisconsin Avenue around the mall has seen several development announcements over the past year, and visible construction work on the long-troubled mall would add to that momentum.

That work will include a new entrance and plaza at the mall’s West Wisconsin Avenue entrance at Old World Third Street. A planned food hall, similar to destinations like Eataly in Chicago and New York City, will be built on Grand Avenue’s first level. Also, a historic restoration is planned for the Plankinton Arcade on Grand Avenue’s eastern end.

“As much as the Grand Avenue hasn’t seen any physical changes over the past 12 months, it is because we’ve been working on all of the drawings, the submittals, the planning, the evaluation and the underwriting,” said Janowiec, a principal with The Aggero Group in Milwaukee.

Janowiec provided updates on the Grand Avenue redevelopment during the Milwaukee’s Business Journal’s Jan. 24 Downtown Roundtable. Further details about the work planned this year will be announced in February.

The Aggero Group and Minneapolis developer Hempel Cos. in December 2015 bought the ailing downtown Milwaukee mall. The property stretches on the south side of Wisconsin Avenue from North Plankinton Avenue, where the historic Plankinton Arcade is located, west to Old World Third Street. Grand Avenue’s more modern Western Arcade, which includes the food court, connects with the Matthews office building next to the Old World Third Street entrance, and the Boston Store.

The Grand Avenue group a month ago bought portions of the Matthews Building after six months of negotiations. That building purchase is a key step toward converting the food court into an office space. The Matthew’s Building’s first floor on Wisconsin Avenue, and its elevators, will become the main entryway into the Grand Avenue’s upper floor office space.

Janowiec said applications will soon be filed for historic restoration tax credits to build a lobby in the Matthews Building, and to restore the Plankinton Arcade. Securing those tax credits is the first step toward the other renovation work in the mall, he said.

That includes the challenging puzzle of shuffling tenants within the mall, Janowiec said.

“There are many tenants who are going to stay with the project, and they are just going to be relocated,” he said.

Food court tenants will move down to the Western Arcade’s first level. Some of the first-level stores may move to make that happen, Janowiec said. Once the third-level food court is cleared, contractors will strip that area down to the concrete.

Janowiec said that so-called “gray-boxing” work will start before an office tenant is secured because it will make the space easier to market.

“One thing I’ve learned very, very quickly with the help of our brokers is Milwaukee is a kick-the-tires market when it comes to office,” Janowiec said. “If you are standing in a 1990s food court, showing somebody the prospect of this beautiful open floor concept office space, it’s a real stretch.”

Janowiec added that “the strategy on that part of the building is, frankly, if you build it, you will lease it.”

The construction will include interior structural work to expand the floor plates on the building’s second and third floors into the open space of the atrium. Retailers on the mall’s second floor can remain in place as that work is done, he said. The ownership group hasn’t decided whether to gray-box the second floor this year as well.

In addition to the food court tenants, the Western Arcade’s first floor would be transformed into a food hall, a concept that’s gaining popularity across the country. The plan is to collect several restaurant booths or other food vendors around a shared commons space. Unlike the food court’s national chains, the emphasis will be local businesses.

“It’s a collection of local food and beverage uses that represent the fabric of our downtown community,” Janowiec said. “What we want to do is create spaces for people to operate their food use, their restaurant use, in an economical fashion.”

More details on the future of the Plankinton Arcade on the mall’s eastern end will be announced next month, but restoration work on that building also will start this year, Janowiec said. The mall’s owners are still pursuing a grocer for part of the arcade, he said.