Foxconn megafactory flop forces Wisconsin town to recast its net

But Taiwan-based Foxconn remains on the hook to pay for the infrastructure improvements and land acquisition for its now-abandoned grand plans. Starting next tax year, Foxconn’s payments to a special tax district in this village of around 27,000 people will more than double to about $36 million a year and stay at that level for more than 20 years until the debt on the infrastructure is paid off.

Local leaders say they are counting on the company to continue footing the bill for hundreds of millions of dollars in water, sewer and other improvements that they hope will lure the next big fish.

“We have a terrific site that is going to be attractive to any number of different types of users," said Jim Paetsch, executive director of the Milwaukee 7, a regional economic development partnership.

So far, recruiting another company has been tough for the nearly five-square-mile area, dubbed the Wisconn Valley Science and Technology Park.

Local officials said they spent months wooing Intel Corp. to build a chip factory, ultimately losing out to Ohio earlier this year.

Officials were also hopeful they would see a surge of jobs when Foxconn announced a deal last year to team up with electric-car maker Fisker Inc. But Foxconn instead agreed to buy the former General Motors factory in Lordstown, Ohio, with plans to build electric vehicles there.

“We view this as the long game," said Jenny Trick, executive director of the Racine County Economic Development Corp., which helped negotiate the original Foxconn deal. “You have to plan for the best—and the worst."

Mount Pleasant could be in a strong position since speed can be a critical factor when huge economic-development opportunities come along, said Didi Caldwell, president and founding principal of Global Location Strategies, a Greenville, S.C., site-selection firm. “I tell communities you need to be as investment-ready as possible," she said.

Some critics think the infrastructure is more than the site will need for decades—and that it could be a matter of time before Foxconn decides it no longer wants to keep up with the payments.

“Right now, it’s a giant white-elephant-type project," said Steven Deller, a professor in the Department of Agricultural and Applied Economics at the University of Wisconsin-Madison. “The water lines that they ran into it, the highway infrastructure that they ran into it, the electric lines that they ran into it—it’s all way overcapacity," he said.

“I think it’s foolish to believe that starting next year, they’re going to be willing to make us $30 million payments a year for the next 24 years so that we don’t default," said Kelly Gallaher, a local homeowner and frequent critic of the project. “As a resident and a property-tax payer, it’s terrifying."

Foxconn declined to comment on the concerns. Its main building on the site, the company said in a statement, is “a key strategic asset to respond to market demand for Foxconn-related activities or activities that involve joint venture partnerships."

Local officials say that if Foxconn were to pull out, taxpayers would be able to sell off the company’s land and buildings with an assessed value of more than $500 million and rely on state guarantees for part of the debt.

The area had high hopes back in 2017, when Foxconn announced a plan at the White House to build large, flat-panel screens at a huge new factory in Wisconsin. The state-of-the-art factory would employ 13,000 people and qualify for nearly $3 billion in state tax credits. Then President Donald Trump said it would be the “eighth wonder of the world."

The company contributed $60 million toward land acquisition for Wisconn Valley and pledged to pay back some $300 million in bonds for infrastructure and land purchases, whether the plan came to fruition or not. The state and federal governments kicked in tens of millions of dollars to expand nearby Interstate 94. Ratepayers of the local utility are footing the bill for the power station on the site.

But Foxconn soon soured on the plan, citing high manufacturing costs in the U.S., while still pledging to create 13,000 jobs mostly focused on research.

At various times, the company has said it planned to make high-tech coffee kiosks, ventilators or electric vehicles at the site, though none of the plans have come through. Last year, Foxconn formally backed away from plans for a huge project and signed a new, scaled-back incentive deal with the state. Tax credits now max out at $80 million for creating nearly 1,500 jobs by 2024.

The company declined to say how many employees it has currently or what they do at the site. As of the end of 2020, it had created 579 jobs, according to its most recent filing with the state, and was eligible to receive the first $28.8 million in tax credits.

This story has been published from a wire agency feed without modifications to the text