Jeramey Jannene

Evers Announces New, Smaller Foxconn Deal

Company has failed to meet goals of original $4 billion agreement.

By - Apr 19th, 2021 09:06 am
Foxconn. Photo by Dave Reid.

Foxconn. Photo by Dave Reid.

Governor Tony Evers and Foxconn board vice chairman Jay Lee announced a new agreement Monday morning between the Taiwanese technology company and the state.

The original agreement called for up to $4.1 billion incentive package via refundable tax credits and infrastructure investments in exchange for up to $10 billion in investment and the creation of 13,000 jobs. As part of the agreement, the company had to build a generation 10.5 LCD fabrication facility. But it almost immediately scaled down those plants. The state and local government entities have meanwhile spent millions on associated infrastructure.

“In response to unforeseeable economic conditions, Foxconn began formal negotiations with a desire to lower taxpayer liability in exchange for the flexibility to pursue business opportunities the meet market demand,” said Lee in a press release distributed by Evers’ office.

Terms of the new agreement were not disclosed. The Wisconsin Economic Development Corporation board will review the amended agreement.

“I’ve said all along that my goal as governor would be to find an agreement that works for Wisconsin taxpayers while providing the support Foxconn needs to be successful here in our state,” said Evers. “I’m incredibly grateful for all the folks at the WEDC and Foxconn for their help working to find a solution that works for everyone, and I look forward to the amendment being approved by the WEDC Board of Directors.”

The original agreement was negotiated between then-Governor Scott Walker and Foxconn founder and then-chairman Terry Gou in 2017. The agreement split $2.85 billion in state credits into two tranches, one for job creation and one for capital investment. It also gave a $150 million break on sales taxes and committed the state to spend $282 million on highway expansion projects.

Evers, who defeated Walker in 2018, has refused to award any of the credits to date as the company has missed some hiring targets and failed to live up to key parts of the contract, including building the promised LCD facility.

The state does have an incentive to renegotiate the agreement. It could be on the hook for at least 40% of the local infrastructure costs, most recently estimated at $791 million, if Foxconn walks away from an agreement with local governments to pay property taxes based on the original estimated value of its Mount Pleasant manufacturing campus. That agreement would allow Racine County and the Village of Mount Pleasant to recoup costs associated with the tax incremental financing district used to build local roads, sewer and water infrastructure. Foxconn is scheduled to start paying at least $31 million annually in property taxes in 2023, regardless of its actual property assessment.

Utility ratepayers are also committed to paying back $117 million in infrastructure costs, plus interest, on a substation and high-voltage power lines.

Foxconn has constructed buildings on the site, but none for LCD manufacturing. The company has repeatedly announced new initiatives, including coffee kiosks and ventilators, that have been quietly canceled.

Last month Foxconn was announced as the selected manufacturer for a new electric car from Fisker Inc. and an executive said the company could invest $13 billion, not $10 billion, in its Wisconsin plant. Neither Evers, nor Lee, mentioned the potential car factory in the press release, nor a bigger investment.

Categories: Real Estate, Weekly

One thought on “Evers Announces New, Smaller Foxconn Deal”

  1. ringo muldano says:

    Who can forget the swelling empty heads of Scotty Wanker, Lyin’ Paul Ryan and the Dumpster shoveling their load of crap… there’s pics if you missed it. The pubCons were foxConned and they still have no clue.

Leave a Reply

You must be an Urban Milwaukee member to leave a comment. Membership, which includes a host of perks, including an ad-free website, tickets to marquee events like Summerfest, the Wisconsin State Fair and the Florentine Opera, a better photo browser and access to members-only, behind-the-scenes tours, starts at $9/month. Learn more.

Join now and cancel anytime.

If you are an existing member, sign-in to leave a comment.

Have questions? Need to report an error? Contact Us