MILWAUKEE—Northwestern Mutual has revealed plans to build a $300 million downtown Milwaukee office tower for its new headquarters here.

Pending city approvals, the 840,000-sq.-ft. development could be complete in 2017. The company has not yet defined building specifications or developed a design, but expects to share proposed architectural renderings by mid-2013. The plan is contingent on city approval of a tax incremental financing plan that will help bring millions of dollars in additional property tax revenue to the city, Schlifske said.

The development is planned on the site of the company's current east office building at the southeast corner of North Cass and East Mason streets. Last year, the company announced it would demolish the 500,000-sq.-ft. building due to significant maintenance costs. The building currently houses about 1,100 employees.

According to Chairman and CEO John E. Schlifske, the decision comes after months of strategic planning to define the current and future growth needs of the company, including evaluation of the size, function and location of new facilities. "We believe in Milwaukee,” he said in a statement. “It's been our hometown for virtually all of our 155 years. This will be a signature development that makes a huge statement about the attractiveness of the whole Milwaukee metro area. We are going to be here, and continue to play a vital role in this community for generations to come."

The company was founded in Janesville, Wis. and moved to Milwaukee in 1859. It’s current century-old Wisconsin Avenue headquarters spans two campuses with four buildings and 3,000 employees in downtown Milwaukee and two buildings and 2,000 employees at its Franklin campus just south of the city.

Schlifske said the company’s building plans are based on a 2025 growth horizon. In the past 20 years, the company has added about 2,000 employees in Milwaukee and Franklin.

According to Mayor Tom Barrett, a developer-funded tax incremental financing (TIF) plan will help support the project. The TIF, which requires approval by the Milwaukee Common Council and the Joint Review Board, will help defray additional costs that Northwestern Mutual will take on in order to re-build a larger facility on the site of its current east office building. The Barrett administration has proposed a tax increment financing plan to facilitate this project. However, rather than have the city borrow money to finance the plan, the proposed financing would be structured as a developer-funded tax incremental district. Under this method, Northwestern Mutual will initially pay for all of the costs of the project.

Once the company's new building is producing property tax revenue beyond that generated by the current east office building, a portion of those "incremental" taxes will be returned to Northwestern Mutual. These payments, contingent on meeting employment projections, will help the company defray some of the additional costs it will initially incur by building a structure of this magnitude on its downtown site, according to the company statement.

Northwestern will receive 70 percent of the tax increment and the city will receive 30 percent until a net present value total of $48 million is paid to the company. If for some reason the project produces less property tax revenue than expected, Northwestern will not have the full $48 million developer funding repaid to it.