Microsoft Foregoes Data Center Incentive

Microsoft has made the decision to redirect its $5 million annual development incentive, paving the way for the Village of Mount Pleasant to advance immediate and long-term property tax relief.

The Village of Mount Pleasant in 2023 approved a development agreement with Microsoft that includes annual incentives of up to $5 million. Microsoft is now eligible to receive the incentive because its developments have created more property value than is required under the agreement.

The incentive dollars will be redirected to the Racine County Economic Development Corporation (RCEDC). About $100,000 will stay with RCEDC for county-wide economic development initiatives, with the remaining $4.9 million returned to the Village of Mount Pleasant.

This decision was made following the announcement of Microsoft’s Community-First AI Infrastructure Initiative, which included the company’s commitment to forego local property tax incentives in the communities in which it operates.

“When we announced that we would build a datacenter campus in the Village of Mount Pleasant in 2023, we made it clear that the community should benefit from our presence,” said Brad Smith, Vice Chair and President, Microsoft. “We will continue to invest in delivering on that promise with economic opportunity, local careers, tax revenue, and more.”

Mount Pleasant officials will dedicate this funding to two forms of tax relief. First, it will be used to keep tax bills stable in the coming years while maintaining Village services. Second, it will cover capital costs.

“Taxpayers will benefit immediately, and will continue to benefit for years to come, because of the data centers Microsoft is building,” said David DeGroot, Village of Mount Pleasant President. “This directly supports our residents at tax time, which has always been the Village Board’s ultimate goal as it seeks balanced growth.”

The Village will use the funds to reduce the tax levy starting in 2027. This will decrease the tax load shared by all Village taxpayers and help keep tax rates stable. Residents will see the impact in their December property tax bill, and in future years while the incentives remain in effect.

The redirected Microsoft incentives will also be used for capital costs. This lets the Village rebuild roads or buy police and fire vehicles without borrowing money, saving taxpayers from the debt and interest costs that would otherwise come with those capital projects.

Village staff will include concepts to use the first $4.9 million in a 2027 annual budget proposal that will be released in October. The Mount Pleasant Village Board will make the final decision on how to use the funding when it approves the 2027 budget.

The Racine County Economic Development Corporation (RCEDC), a nonprofit organization dedicated to attracting and expanding businesses across Racine County, will use $100,000 of the funding to enhance countywide economic development initiatives.

“RCEDC is proud to partner with Mount Pleasant and Microsoft on this important investment. These resources will expand our capacity to drive economic growth and create new opportunities throughout Racine County,” said Jenny Trick, executive director of RCEDC.

Microsoft in summer 2026 completed construction of its first data center in Mount Pleasant. A second facility is under construction immediately to the west with an expected completion in 2028, and the Village has approved preliminary site plans for another two campuses to the north.

Over 550 employees are already working at Microsoft’s data center campus, with hundreds more expected as more facilities are completed.

The Village funds the $5 million incentive payments to Microsoft using property taxes generated by the data centers located in Tax Incremental District (TID) No. 5. The $5 million is only a portion of the total annual property taxes Microsoft is paying as a result of its data centers in Mount Pleasant’s TID No. 5.

Mount Pleasant created TID No. 5 in 2017 to finance projects that prepared land along Interstate 94 for industrial development. Microsoft and Foxconn have both built facilities in the district. The property taxes generated by their projects mean TID No. 5 is in a healthy position to pay off its land preparation costs. The financial success of TID No. 5 is one reason the Village can provide tax relief as Microsoft redirects its annual incentives. Village officials are exploring other ways that TID No. 5 could provide additional tax relief, and support projects to benefit all of Racine County.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.

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