The Development Agreement requires Foxconn to cause the assessed value of its Village campus to be not less than $1.4 billion as of January 1, 2023, and to maintain that minimum guaranteed value until December 31, 2047.
Update: A 120,000 square foot multipurpose building was constructed in 2018 and houses Foxconn's offices. In 2019, Foxconn began vertical construction of its first “fab,” or thin-film transistor fabrication plant, and, in 2020, Foxconn announced substantial completion of the nearly 1,000,000 square-foot advanced manufacturing facility. At the same time, Foxconn affiliate Fii built a 260,000 square foot Smart Manufacturing Center. In 2021, Foxconn opened its 34,000 square foot High-Performance Computing Data Center Globe. Foxconn’s business pursuits of creating a high tech and manufacturing ecosystem in Wisconsin include the ability for Foxconn to explore new industries such as electric vehicle, digital health, and robotics using AI, semiconductor, and 5G technologies. In 2021, the Wisconsin Economic Development Corporation noted performance reporting by Foxconn, dated April 1, 2020, of $271,780,038 in significant capital expenditures in the zone. In December 2021, Foxconn qualified for nearly $30 million in Wisconsin tax credits. The Wisconsin Economic Development Corporation verified that Foxconn had met job creation and investment benchmarks to qualify. Foxconn created 579 eligible jobs and made a capital investment of $266 million at the facility, which qualified the company for $2.2 million in job credits and $26.6 million in capital investment credits. WEDC secretary Missy Hughes stated, “WEDC has determined that Foxconn created sufficient jobs and invested sufficient capital expenditures to qualify for tax credits under its amended contract. The WEDC contract requires Foxconn to have 747 jobs filled by eligible employees as of December 31, 2021, in order to be awarded any program tax credits for 2021. In November 2022, WEDC awarded all $8.6 million in available program tax credits to Foxconn for creating jobs and making capital investments in 2021.
The following materials provide updates on the project: January 2021, February 2021, March 2021, December 2022 Report.
Foxconn provided funds needed for land acquisitions through an upfront cash investment of $60 million and Special Assessments when needed to cover acquisition costs above that amount. Assembling the land to create Village Tax Increment District No. 5 was essential to create a truly unique campus and tax incremental district.
Foxconn agreed to the levying of a special assessment by the Village on property owned by Foxconn in TID No. 5 in an amount equal to the County’s cost of acquiring land for the TID No. 5 Project. The Village levied the special assessments in 2018 pursuant to resolutions adopted by the Village Board, which will be payable in installments by Foxconn in each of the years 2020 through 2039. Foxconn provided $60 million as required under the Development Agreement and has timely paid all property taxes and special assessments due thus far under the Development Agreement, including special assessments of $7,325,050 for tax year 2019, $7,324,841 for tax year 2020, $7,328,607 for tax year 2021, and $7,329,309 for tax year 2022.
Update: On March 31, 2023, the Village entered into a contract to sell to Microsoft Corporation, for a Data Center, 315 acres of land previously pledged to Foxconn. The contract calls for a closing not later than July 31, 2023. At the closing, Foxconn has agreed to release its land rights, and Foxconn will be paid the land price paid by Microsoft (net of costs) as partial reimbursement of Foxconn’s $60 million Developer Advance.
Copies of materials related to the Microsoft project are available at: Fact Sheet, Purchase and Sale Agreement, Development Agreement, Implementation Agreement.
Foxconn is providing a guaranty to cover the annual revenue equivalent to an incremental valuation of $1.4 billion, should the actual valuation fall short during the 30-year life of the TID. The guaranteed value was sized to generate sufficient tax revenue to support debt service and Foxconn must make these minimum tax payments regardless of the project’s completion status. Special assessments on the Foxconn project area are also sized to cover debt service on Racine County’s GO bonds. In addition to the valuation guaranty, Foxconn provided a guaranty to cover the Village and County’s initial debt exposure, through a combination of (1) its $60 million up front cash investment (“Developer Advance”); (2) the continuing first lien mortgage to the Village and County on area parcels owned by Foxconn (“Developer Advance Mortgage”); and (3) a “Developer Affiliate Guaranty” for any remaining gap, beginning with a $135 million guaranty at the time of the initial bond issuance in 2018.
Update: As of January 1, 2022, the Village of Mount Pleasant reported $558,684,300 in total equalized value and $528,452,800 in incremental value in TID No. 5. In other words, as of January 1, 2022, Foxconn has created approximately 40 percent of the incremental valuation required by January 1, 2023. In any year after 2023 in which Area I of TID No. 5 is not valued at $1.4 billion, Foxconn will have to pay the Village an annual amount equal to the property taxes that would have been generated by a $1.4 billion assessed value – regardless of the actual value of the campus.
