Racine funds may be tied to Foxconn
County Board approves $500,000 for economic development
In an unusual action possibly related to efforts to land a manufacturing plant that could employ thousands, the Racine County Board has agreed to funnel $500,000 to the area’s economic development organization.
The special appropriation to the Racine County Economic Development Corp. is in the form of a letter of credit “to cover expenses related to economic development projects.”
The nonprofit organization must spend the money within the next six months.
The County Board approved the measure unanimously and without discussion Tuesday night. It followed a closed session of the board’s executive committee called “to deliberate the investment of public funds regarding competitive multi-site economic development opportunities and the strategies associated with pursuing the same.”
It was the supervisors’ third closed session on the topic in two weeks.
The series of closed-door meetings and, now, the out-ofthe-ordinary appropriation, are sure to fuel speculation that Racine County is the target site for Foxconn Technology Group should it decide to build in Wisconsin.
A Taiwanese company with revenue last year of about $135 billion, Foxconn has said it may spend more than $10 billion on new U.S. factories. Wisconsin is a prime candidate for part of that presumed investment.
Foxconn is seeking huge blocks of land. The firm has sent municipalities requests for proposals seeking one parcel of 400 acres and another of 1,000 acres.
Foxconn’s labor demands could be huge too: CEO Terry Gou has said the firm’s U.S. manufacturing operations could create 50,000 jobs.
Foxconn hasn’t always followed through on announced plans for new plants. But if the company does build in Wisconsin, there are reasons to think it would happen in the southeastern or south central part of the state.
The area has a large labor supply, and it is close to O’Hare International Airport in Chicago — important for a company that is based in Taiwan and does most of its manufacturing in China.
Further, the region is represented in Congress by House Speaker Paul Ryan (R-Wis.), a key ally of President Donald Trump.
That could matter. Foxconn’s plans to build factories in the U.S. may be driven as much by political as economic considerations. With Trump threatening to throw up trade barriers on imports, a multi-billion-dollar investment here could protect Foxconn’s access to U.S. markets for its vast Chinese manufacturing operations.
And if Trump has influence over where Foxconn locates its U.S. factories, he arguably would want to reward states that delivered his unexpected victory, including Wisconsin, Michigan and Pennsylvania.
Wisconsin seemed to get a special boost this month when Trump, visiting Milwaukee, alluded to negotiations with an unspecified company and said Gov. Scott Walker might get “a very happy surprise very soon.”
The remarks came less than two weeks after Walker took an unusual trip — flying to Japan and returning within just three days, without advance notice. After the governor’s departure, his communications director told reporters he had left with Wisconsin Economic Development Corp. officials “to pursue a significant foreign direct investment opportunity for our state.”
While Foxconn is a Taiwanese firm, it last year acquired Sharp Corp., which is based in Japan.
Foxconn famously makes the iPhone for Apple Corp. But if Foxconn does build a factory in Wisconsin, it likely would produce Sharp display panels for television sets and other electronic devices.
The Racine County budget annually has earmarked money for the economic development corporation — $750,000 for 2017 and $1 million in each of the five previous years. The appropriation approved Tuesday night, however, is separate from the annual funding, County Board Chairman Russell Clark said.
M.T. Boyle, chief of staff to County Executive Jonathan Delagrave, said Wednesday that as far as she knows the county has never previously extended a line of credit to the economic development corporation.