$60M Foxconn deposit deadline missed

Representative calls it paperwork complication, says no one is concerned

A deadline came and went Friday for Foxconn Technology Group to deposit $60 million into a special account as specified by its contract with Mount Pleasant and Racine County.

However, a representative of the local governments said the problem is only a minor wrinkle arising from the complications of preparing necessary paperwork to create the account.

The account is expected to be established and the money deposited within the next few days, according to a joint statement late Friday afternoon from attorneys for the village, the county and Foxconn.

“All parties are on the same page,” said the representative of the municipalities. “... Nobody has any concerns about it.”

The representative asked not to be named because the local governments and Foxconn have agreed that all statements on the matter be jointly approved.

The $60 million is to be used by

“We are now working ... to establish the required Escrow Account. The funds will be deposited into the Escrow Account, as soon as it is established, which we anticipate before December 22.”

Letter from attorneys

Mount Pleasant and Racine County to begin buying land in connection with Foxconn’s plans for a $10 billion, 13,000-employee manufacturing complex in the village.

The development agreement signed Dec. 1 by the company and the municipalities calls for Foxconn to deposit the money in the account “not later than December 15, 2017.”

In their statement Friday, attorneys representing all three parties said Foxconn has the $60 million of funds available for deposit.

“We are now working with the title company to establish the required Escrow Account,” the statement said. “The funds will be deposited into the Escrow Account, as soon as it is established, which we anticipate before December 22.”

The account will be at Chicago Title Insurance Co.

According to the development agreement, Foxconn will own the account but only the village and county will be allowed to tap the funds. The municipalities will use the money to buy land in two areas to the north and east of the Foxconn site — areas slated for future expansion by the company and its suppliers, as well as for construction staging.

Owners of about 710 acres in the two areas have signed options to sell their property to the village. At $50,000 an acre — the price landowners have said they are to receive under their options — buying the 710 acres already under contract would cost about $35 million.

The village has until Dec. 29 to exercise the options.

The Foxconn deal has faced and overcome delays at the state level. The board of the state’s jobs agency scheduled an Oct. 17 vote on the project only to postpone it because the two sides hadn’t finalized their agreement, sparking speculation from some that the deal was in trouble.

But those rumors proved shortlived.

Mark Hogan, the head of the Wisconsin Economic Development Corp., held out for and won guarantees that Foxconn and company chairman Terry Gou would back up job targets in the deal to the tune of up to $500 million or more. With those guarantees in place, the WEDC board approved the state’s contract with Foxconn on Nov. 8.

The Foxconn project is the biggest economic development deal in Wisconsin’s history and is supported by billions in state and local aid.

Wisconsin has pledged up to $3 billion in incentives. Up to $2.85 billion of that could come in cash over the next 15 years. The state also would waive another $150 million in sales taxes on construction materials.

Mount Pleasant and Racine County, meanwhile, will spend some $764 million to assist the project. That money will go for such things as acquisition of land for Foxconn, new sewer and water lines, improved roads, and expanded police and fire protection, as well as a $100 million payment to the firm over 10 years.

Property taxes on the development in and near the Foxconn site are expected to repay all of the local expenditures and then some. The company has guaranteed its campus alone will contain taxable value that officials say will pay off the village and county spending, and they expect Foxconn to spur extensive taxable development beyond that.