Foxconn will have assembly plant operating by 2019
MOUNT PLEASANT – Foxconn Technology Group's site plan for its manufacturing complex shows that the company plans to construct an assembly plant on its sprawling campus that will start operating by January 2019.
The schematic site plan, which was made public Friday, identifies more than a dozen buildings that will be built in two phases, including offices, a cafeteria and parking ramps on land east of I-94 near the border of Racine and Kenosha counties.
Manufacturing-related buildings are labeled in some cases with descriptions such as "glass," "chemical-gas" and "water." Foxconn uses vast amounts of water, chemicals and glass to construct liquid crystal display panels as a contract manufacturer.
The first manufacturing building would be at least 1 million square feet and built along Highway H, on the eastern portion of the property. Foxconn has told local officials it plans to begin assembly operations in the building a little more than a year from now, said Claude Lois, project director for Mount Pleasant.
Foxconn is currently leasing space for
some work in Mount Pleasant.
The company expects to develop 22 million square feet of space by January 2023, Lois said.
It also intends to keep most of its construction work — at least for now — away from the western side of the property near I-94.
The plans were provided to state and local officials as representatives of the village and Racine County officially signed a development agreement with the company in a ceremony at the Village Hall.
The agreement clears the way for construction of a plant that would produce high-resolution electronic screens and could employ up to 13,000 people. It is touted as the biggest economic development project in state history.
The agreement finalizes financial commitments of $764 million to the company from the village and the county.
The local funding is in addition to $3 billion and other incentives from the State of Wisconsin.
In turn, Foxconn has pledged to build an up to $10 billion plant and produce state-of-the-art liquid crystal display panels.
Friday’s event came after the Village Board and Racine County Board signed off this week on money they are committing to the project. A joint review board of the two units of government has also agreed to the deal and the tax incremental financing district that is being created.
Foxconn’s move to Wisconsin had garnered no attention in the state until mid-June when President Donald Trump hinted about a project involving the Taiwanese company.
Then came reports of furtive meetings between the company and state and local officials; a flight to Japan by a Wisconsin delegation, including Gov. Scott Walker, to inspect a similar company plant; and a broker meeting with property owners here and at a rival location in Kenosha County to assemble land for the nearly 1,200-acre campus.
Friday's agreement “will change the projection of our county for generations to come,” Racine County Executive Jonathan Delagrave told an audience of more than 100 people.
At Friday’s ceremony, members of the village and county boards were individually introduced and signed the agreements. On Foxconn’s behalf was Louis Woo, special assistant to Foxconn chairman and CEO Terry Gou. Also on hand were representatives of companies with ties to Foxconn who signed the agreements.
Woo acknowledged the potential risk of the project in some people's eyes. He told the village and county board members that “some of you thought you were probably going on a political limb and I understand that.”
But Woo pointed to the company’s size, financial strength and its technological prowess. He noted that the company has 1.3 million employees and annual revenue that would rank it 59th among nations in terms of gross domestic product.
“The future is bright, but we have to continue to work hard to make it happen,” Woo said.
The state’s commitments have come under fire in some quarters, including from many Democratic lawmakers, who are worried about the costs and special inducements given to the company. Also, some Democrats criticized the package approved by a state board on Nov. 8 — the same day the final version was made public.
The local contract with Foxconn provides for a series of financial safeguards in the event the project does not meet expectations. This includes guaranteed property tax payments and land that will be held by taxpayers as collateral.
One provision calls for business entities with ties to Foxconn to guarantee that the sprawling industrial campus will contain at least $1.4 billion in taxable value by the start of 2023. According to officials, this will generate enough money to pay the village and county for their expenses tied to the project.
Officials say they expect that with spinoff development, the tax base will be higher.
Hon Hai Precision Industry Co., the parent company of Foxconn that was founded by Gou in 1974, is providing the backing for the state’s agreement with the company.
In the case of Mount Pleasant and Racine County, the two government units’ commitments are backed by SIO International Holdings Ltd., which is 89% owned by Gou.
SIO, with holdings that include a stake in Sharp Electronics, will guarantee up to $135 million in debt that local governments expect to issue as part of the deal.
Also, Mount Pleasant will receive $60 million upfront from Foxconn to start making land purchases.