Northwestern Mutual Life Insurance Co. plans to invest more than $500 million to redevelop its downtown Milwaukee campus, with nearly 2,000 employees eventually relocating there from the company's Franklin operations, the company announced Thursday.

That would help boost Northwestern Mutual's downtown workforce to at least 5,750 employees by 2030. That comes during a time when fewer people are based at urban offices throughout the nation because of remote work's increased use.

“We are doubling down on our Milwaukee campus,” said Northwestern Mutual Chairman, President and Chief Executive Officer John Schlifske. The company is downtown's largest employer with 4,480 workers.

Northwestern Mutual would be the latest in a series of large Milwaukee-area businesses that are shifting operations from the suburbs to the downtown area. Executives say downtown locations help them better attract and retain employees − especially "the next generation of talent" who are more drawn to urban locations, Schlifske said.

Thousands of jobs to move from Franklin to downtown

In Northwestern Mutual's case, that includes leaving an outlying suburb where as late as 2008 the company was opening a new office building − and in 2012 seriously considered adding more space there.

Consolidating those operations downtown will be a big plus for a company culture that focuses on working closely together, Schlifske told the Milwaukee Journal Sentinel.

The return of employees to the office as the COVID-19 pandemic recedes has highlighted the importance of Northwestern Mutual's culture, Schlifske said.

A company culture can be more fully developed when people are working near one another and not just meeting through Zoom calls, he said.

And, having an attractive workplace − particularly in an urban area − can help draw remote workers back to the office, Schlifske said, while also helping attract and retain talent.

Other businesses recently shifting away from suburbia include Fiserv Inc., which will move its headquarters from Brookfield to the HUB640 Building, 640 N. Phillips Ave.; Milwaukee Tool, which is opening a new office at 501 W. Michigan St. while keeping its Brookfield headquarters, and Rite-Hite Holding Corp., which is finishing up a relocation of its headquarters and other operations from Brown Deer to Reed Street Yards business park in Walker's Point.

A highly unusual transformation planned for downtown tower

Northwestern Mutual plans to begin construction on its project as early as this fall, with completion expected in 2027.

That is contingent on the Common Council approving a tax incremental financing district that would provide $30 million to the company. Mayor Cavalier Johnson and other city officials support that financing proposal.

Northwestern Mutual, with annual revenue of $34 billion, plans to spend more than $500 million on extensive interior and exterior renovations of its 18-story, 540,000-square-foot office building at 818 E. Mason St.

The plans center on transforming that building, which was completed in 1990, to mirror the design of Northwestern Mutual's newer office tower and commons just to the south, at 800 E. Wisconsin Ave.

New Haven, Connecticut-based Pickard Chilton, which designed the tower and commons, will be the architect overseeing the 18-story building's gut revamp down to its foundation, center core and steel frame.

Renovated building will resemble recently opened tower

The older building will end up with a look similar to the the 32-story, 1.1-million-square-foot tower and commons.

That newer building, which opened in 2017, is known for its curved structure and glass curtain walls.

The 1990 building, post renovations, will include a three-story connection to a 1,090-stall parking garage at 777 N. Cass St., Schlifske said. To accommodate that, Northwestern Mutual wants city approval to close North Cass Street between East Mason and East Wells streets.

Also, the plans call for a pedestrian plaza at Mason and Cass streets.

The transformed building will have a more efficient layout to add around 80,000 square feet, according to a city report.

The downtown campus could one day accommodate around 9,000 employees, Schlifske said, as well as Northwestern Mutual agents and other visitors.

"What we're trying to do is unite people," said architect Jon Pickard, Pickard Chilton principal.

The announcement of the $500 million development comes roughly a decade after Northwestern Mutual said it would build the 32-story office tower and commons.

Northwestern Mutual spent more than $400 million on that project − with the company receiving a $50 million grant through annual TIF district payments, according to the Department of City Development. Those payments, provided by 70% of the office tower's annual property taxes, are to end by 2029.

The roughly 2,000 employees from the Franklin campus, at South 27th Street and West Drexel Avenue, are to relocate to the downtown complex over the next three to five years.

Move will be a big boost to downtown restaurants, other businesses

Additional downtown workers help restaurants and other businesses that depend on a large office population. Some of those local businesses have seen revenues decline with more people working at home.

Northwestern Mutual's plans drew praise from Beth Weirick, chief executive officer of the Milwaukee Downtown Business Improvement District.

"That is a huge testament to the downtown experience we’ve collectively created in recent years − and it will only get better with the company’s investment and plan to bring more employees downtown," Weirick said, in a statement.

A district survey conducted in September found that on an average workday 60% of downtown employees were coming into their workplaces. That percentage has been slowly rising over the past year or so, and Northwestern Mutual says around 70% of its workforce is back in the office.

Franklin campus will be sold or leased

Meanwhile, Northwestern Mutual's Franklin campus, featuring two six-story office buildings totaling more than 880,000 square feet, could eventually be available for sale or lease after the employees relocate to downtown.

The company opened the Franklin buildings in 2004 and 2008. The company said then the development's tab totaled $210 million, with the City of Franklin providing a TIF district.

Northwestern Mutual said in 2001 it was moving some operations to Franklin. It wanted a site far enough from the downtown campus to serve as a backup computer center as the company expanded into new financial products.

Then-President and CEO Ed Zore said Northwestern Mutual was buying enough land in Franklin to meet its growth for the next 10 to 20 years. The 80-acre site includes 16 acres remaining for future development.

In 2012, the company considered additional expansion in Franklin before instead proceeding with the downtown tower and commons.

The Franklin campus has served Northwestern Mutual well, said Schlifske, who succeeded Zore in 2010.

Cloud computer, new technology contributed to decision

But, he said, changes in technology, including the use of cloud computing, meant the company no longer needed a redundant data facility.

The downtown campus project is to include $30 million provided to the company through a new TIF district proposed by Mayor Johnson's administration. That city grant would come through annual payments for up to 23 years from the transformed office building's higher property tax revenue.

The financing agreement proposal requires the company have at least 5,375 employees assigned to its downtown campus at the project's completion, and at least 5,750 employees there by 2030 − and for the TIF's remaining term.

That employee count will not include contractors and consultants who work at the downtown campus.

However, it can include employees who work remotely but reside in Milwaukee. Northwestern Mutual currently has 229 remote workers who live in the city.

Other conditions include those found in financing packages for companies such as Fiserv and Milwaukee Tool: using small business enterprises for at least 25% of construction and supply costs and at least 18% of professional services costs on the construction of the project; hiring unemployed and underemployed Milwaukee residents for at least 40% of total on-site construction “worker hours,” and ensuring a $15 hourly minimum wage with built-in escalators for the new building's janitors, security personnel and other vendor employees.

Another provision: the company and its foundation will provide $2.5 million during the TIF's first five years "towards affordable housing efforts and/or efforts to improve the fitness, health or education of economically disadvantaged youth in the City," according to the proposal.

The TIF, which also would provide up to $10 million to fund nearby street improvements, bike lanes and other public infrastructure, will have its first public hearing at the Redevelopment Authority's Feb. 16 meeting.

“To complement Northwestern Mutual’s investment, the city is advancing a financing tool that adds value without imposing a burden on city taxpayers,” Johnson said, in a statement. “Over the long run, the city’s participation adds tax base and economic strength to Milwaukee."

Common Council members supporting the project include council President Jose Perez and Ald. Robert Bauman, whose district includes downtown.

“Northwestern Mutual has proven time and again that they are committed to our city,” Perez said. “Their growth, success and investment in Milwaukee benefits our entire community.”

The company's downtown campus includes the historic headquarters building at 720 E. Wisconsin Ave. and a building at 727-733 N. Van Buren St.

The Van Buren Street building will help accommodate employees as the 18-story building is transformed, Schlifske said. Meanwhile, he said, the next campus project will likely be interior renovations at the historic headquarters building, which opened in 1912.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Twitter and Facebook.

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This article originally appeared on Milwaukee Journal Sentinel: Northwestern Mutual invests $500 million in downtown Milwaukee campus