Mount Pleasant,
Racine County to contribute $764 million toward Foxconn project.
The Village of Mount Pleasant and Racine County will provide $764 million toward development of the huge Foxconn manufacturing campus — all of which, local officials said Wednesday, will be repaid by the taxes the project generates.
“We don’t project any taxes being raised based on this project,” said Claude Lois, who has been hired by Mount Pleasant to shepherd the $10 billion development along.
Alan Marcuvitz, general counsel to the village, put it even more strongly: “We are guaranteeing that no one in the village of Mount Pleasant is going to pay $1 more of taxes because of this project.”
The revelation of the $764 million local incentive package and the vows of no harm to taxpayers come as Foxconn prepares to move forward with an immense complex that eventually could employ 13,000 people turning out high-definition flat screens in 20 million square feet of factory space.
Taiwan-based Foxconn, which describes itself as the world’s largest electronics manufacturer, plans to build its campus on some 1,200 acres of land just east of I-94 in the far southwestern corner of Mount Pleasant.
The $764 million local contribution is to be repaid through a tax-increment financing district the village will establish.
No sales tax is envisioned. The state legislation paving the way for Foxconn allows Racine County to levy a sales tax to help pay for costs associated with the project, but officials were able to assemble a financing package without resorting to that option, County Executive Jonathan Delagrave said.
Both the county and Mount Pleasant will borrow money, by issuing bonds, to pay for their upfront costs. All told, the long-term debt financing by the county and village will total just under $285 million.
Other costs would be covered by the property taxes Foxconn pays as it builds out its complex. An investment by the company of $1.4 billion — significantly less than the $10 billion the firm has said it plans — would generate more than $31 million a year in new taxes and represent enough to pay for public improvement and development costs, officials said during a background briefing.
Under anticipated terms of a not-yet-signed agreement, Foxconn would guarantee that its property is worth at least $1.4 billion and would pay any shortfall.
That is one element prompting officials Wednesday to describe the tax-increment financing plan as conservative, with the district being established potentially capable of generating significantly more than what will be needed to pay off the local costs. Besides Foxconn’s investment, officials expect to see taxgenerating development by a host of suppliers. The district will cover 3,921 acres, providing ample room for other development.
The local money would go toward multiple purposes, including $168 million for land acquisition, $160 million for water and wastewater infrastructure, $175 million for financing expenses and $116 million to cover additional public safety costs as the village adds police officers and likely builds a new fire station.
Also included: a $100 million “development incentive” for Foxconn in the form of a forgivable loan. Officials said that was necessary to put the deal together and pointed to the far larger investment Foxconn will be making.
In addition to building its factory complex, Foxconn also will spend $60 million to acquire nearly 1,100 acres immediately north of its planned campus. But the village will hold title to that land, perhaps along with Racine County, as security for the local investment.
The 1,200 acres on which Foxconn builds, on the other hand, will be purchased — for about $50 million in all — with money borrowed by the county. Securing that investment will be a $74 million special assessment levied on Foxconn for the public improvements.
“We are guaranteeing that no one in the village of Mount Pleasant is going to pay $1 more of taxes because of this project.”
ALAN MARCUVITZ GENERAL COUNSEL TO THE VILLAGE OF MOUNT PLEASANT