Another OK for Foxconn
Next step is joint review board of local officials
Racine County Board approves up to $764 million for deal.
Foxconn Technology Group’s plans to develop a massive flat-screen manufacturing complex took another step forward Tuesday night with the latest local approval for the development’s public financing.
The Racine County Board voted, 18-0, to provide up to $764 million in local funds for the Foxconn development in Mount Pleasant. The Taiwanese company plans to spend up to $10 billion on factories that would employ as many as 13,000 people.
The final contract between Foxconn and related companies, Racine County and the Village of Mount Pleasant was released publicly for the first time Monday and approved unanimously by the Village Board hours later.
“It’s a very historic moment indeed,” Village President Dave DeGroot said Monday.
These local votes and subsidies come in addition to up to $3 billion in state incentives already approved by lawmakers, Gov. Scott Walker and his administration.
Approval by the Racine County Board provides one of the final sets of goaheads from elected officials. A joint review board of local officials is also expected to vote on a piece of the Foxconn deal this week.
The county and village contract with Foxconn provides a series of safeguards for local residents in exchange for the subsidies — from guaranteed property tax payments to land held as collateral by taxpayers.
The key provision: The Foxconn entities guarantee that by January 2023 the planned factory campus will be taxed as if it is worth at least $1.4 billion, even if it isn’t worth that much by then. Local officials say that those taxes alone will generate enough money to pay off the cost of the local infrastructure needed to support the factory and that Foxconn could still end up paying more.
Unlike the $3 billion deal with the State of Wisconsin, the agreement with Mount Pleasant and Racine County is not being backed by Foxconn’s corporate parent, Hon Hai Precision Industry.
But local officials say they are comfortable with their guarantor — a company owned by Foxconn chairman Terry Gou that owns extensive real estate holdings. That company, SIO International Holdings Ltd., is also one of the guarantors of Foxconn’s obligations to the state, and state officials have assured their local counterparts that SIO has deep pockets.
SIO will guarantee up to $135 million of the debt the local governments expect to issue in the coming months. Foxconn, meanwhile, will provide Mount Pleasant with $60 million up front to be used to begin buying land near the planned factory site.
Foxconn plans to begin construction next year on a 25-million-square-foot manufacturing complex on about 1,200
acres just east of I-94 and north of Highway KR — the boundary between Racine and Kenosha counties.
The company, which describes itself as the world’s largest contract electronics maker, ultimately stands to receive the land for free, as well as adjacent land on which it may expand.
The local governments also could give Foxconn up to $100 million — in annual payments of $10 million beginning in 2024 — as part of the local incentive package.
Other major estimated expenses of the village and county include $143 million for land acquisition, $205 million for utilities and other infrastructure, and nearly $90 million in added police and fire protection costs.