Microsoft Will Pay $50 Million For Mount Pleasant Data Center Site

Kim Mahoney’s house on Prairie View Drive is the only house still standing in her subdivision, out of an original 13 properties. All other property owners sold to the village of Mount Pleasant, Wis., and their homes have been demolished to make way for the Foxconn plant. A building on the Foxconn site and the Foxconn construction area are seen in the background. Drone photo taken on July 1, 2019. Coburn Dukehart/Wisconsin Watch

Microsoft is moving forward with plans to build a $1 billion data center on land originally intended for the Foxconn development in Mount Pleasant.

It’s still not entirely clear how many people will be employed at the center or when construction will begin, but local officials are hopeful the site will be put to good use after Foxconn’s plans to build a large flat-screen manufacturing plant on the land never came to full fruition.

The Racine County Board of Supervisors Tuesday approved the agreement for the land sale, after the plans were announced by the Village of Mount Pleasant in late March. Racine County Executive Jonathan Delagrave told the county board he believes this step will help bring more companies to the area, as much of the land on the Foxconn project area is vacant.

“Bringing in an A1 world-class company like Microsoft is just one more step to continuous improvement,” Delagrave said during a county board meeting Tuesday.

“The bulk of the most attractive and pad-ready land still remains available for a large-scale development,” he added.

Microsoft owns over 200 data centers in 34 countries across the globe. The development will house thousands of computer servers and data storage devices, and will be similar in size and appearance to a distribution center, according to Paul Engelis, Microsoft’s director of community engagement.

Engelis said similar data centers employ around 300 to 400 people, and he told the county board he’d be “surprised” if the center had fewer than 100 employees.

“It’s got all of the infrastructure, it’s the size that we need, it’s ready to go, so it’s kind of the perfect parcel of land,” he said.

Future land use and design approvals are still needed for the site, but as part of the agreement, Microsoft must start phase 1 of construction by July 2026 and begin the second phase by July 2033. Construction may begin before that time, as Engelis said the company has already been discussing design plans. He also said operations could begin in one phase of the project while construction is still underway, as the development will likely include multiple buildings.

“You’ll see a little bit of a buildup in terms of operations at the site,” Engelis said.

Microsoft is buying the site from the village for $50 million. As part of the agreement, that money will go to Foxconn.  Although Mount Pleasant maintained ownership of the land, Foxconn paid the village $60 million in 2017 for rights to the property. With the payment, the company is agreeing to relinquish those rights.

If Microsoft fails to meet its construction deadlines, the village can repurchase the land at the same price Microsoft paid for it.

Microsoft is also eligible to recoup 42 percent of the annual incremental property taxes it pays on new construction, not to exceed $5 million annually, according to a fact sheet about the sale.

The development will be in Tax Incremental District 5, located on the western side of the village. Foxconn Technology Group, Ashley Capital and Endeavor Development own properties on the 3,900-acre district.

Peter Barca, the secretary of the Wisconsin Department of Revenue, told the county board the project has the support of Gov. Tony Evers.

“I fully believe that virtually any state would be so thrilled to have this opportunity to welcome them to their state, so we’re so pleased that they made this long-term commitment to Wisconsin,” Barca said.

The news comes as Microsoft and other technology companies have been cutting back in recent months. In January, the company announced it was laying off 10,000 employees, about 5 percent of its workforce.

Original plans from Foxconn to invest $10 billion on a large flat-screen manufacturing plant in Mount Pleasant never came to full fruition. Foxconn has recently said they have over 1,000 employees working in Wisconsin. The company qualified for state subsidies for its Mount Pleasant development last year, bringing the total amount it has received from the state up to about $37.4 million.

Listen to the WPR report here.

Microsoft moving forward with Mount Pleasant data center plans at Foxconn site was originally published by Wisconsin Public Radio.