Milwaukee aldermen voted unanimously this morning to support a $73 million tax incremental financing (TIF) package for the new office tower at the Northwestern Mutual Life Insurance Co. corporate headquarters and for street improvements for the Lakefront Gateway project.
Northwestern Mutual plans to build a 1.1 million-square-foot, $350-400 million, 33-story office tower at its downtown Milwaukee corporate headquarters at 800 E. Wisconsin Ave.
The $54 million portion of the TIF for the Northwestern Mutual office tower, and $4 million in nearby street improvements, will be developer financed. That means the company will pay for the cost of the development up front and will be reimbursed the TIF funds as it pays property taxes.
City officials and Northwestern Mutual executives say the $54 million in TIF assistance for the project is necessary to justify the additional costs of building downtown versus building at the company’s suburban campus in Franklin. High-rise buildings cost more to construct and groundwater at the downtown site also makes construction costs there higher. An analysis by construction consultants from The Concord Group, determined that it will cost $50 million more to build the Northwestern Mutual building at the downtown site opposed to a suburban site.
The city will also use $18 million in TIF generated from tax revenues from the development to pay for several street improvements planned to enhance the lakefront area including the extension of Lincoln Memorial Drive south into the Third Ward and the expansion of Clybourn Street into a boulevard and extension of that street east to Discovery World.
The new Northwestern Mutual building will replace a 16-story, 452,000-square-foot building on its headquarters campus. That building, constructed in 1978, needs significant structural repairs, renovations and upgrades so the company plans to tear it down and replace it with the new building.
About 1,100 employees work in the building that will be torn down. Those employees will be moved to the new building and the company plans to add another 1,900 employees there by 2030.
Demolition for the project is expected to begin by the end of this year, construction is expected to begin next year and the building is expected to be complete in 2017.