The Foxconn land in Wisconsin may finally be used for a meaningful technology project — but not by Foxconn.
Last week, the village board of Mount Pleasant voted to allow Microsoft to build a data center on land previously cleared for the Foxconn LCD fab that never arrived. Microsoft will buy the land for $50 million, some of which will be used to reimburse Foxconn for releasing its rights to the land. It does not appear that Foxconn will play any part in operating the data center itself.
The announcement came days before an election in which the board incumbents narrowly defeated challengers critical of the Foxconn deal.
Foxconn spokesperson Rusty Schultz declined to comment on the record, instead pointing to an unattributed statement published by other outlets that ambiguously suggests Foxconn is partnering with Microsoft in some way.
Microsoft will be eligible for $5 million in tax credits per year
Microsoft will build the $1 billion data center on a 315-acre parcel previously allotted to Foxconn, with construction starting no later than 2026, according to the development agreement. The project will help the Village pay down some of the debt it took on to prepare the site for Foxconn’s never-built LCD factory. Microsoft will be eligible for $5 million in tax credits per year based on improvements it makes to the land. Neither Microsoft nor the Village has said how many jobs will be created, but given the highly automated nature of data centers, it’s likely to be very few.
Microsoft president and chief legal officer Brad Smith is from Appleton, Wisconsin, and the company has significant investments in the state, most notably in the Titletown Tech project in Green Bay. But the company is tight-lipped about its plans in Mount Pleasant.
“Our data center campus investment plans with the Village of Mount Pleasant and Racine County are part of Microsoft’s long-term commitment to the local communities in Wisconsin. We look forward to our work there,” the company’s Frank Shaw said in a statement. The company declined to add any additional information or make anyone available to answer questions about the project.
The village board took Microsoft’s arrival as vindication of the Foxconn deal. “Microsoft was attracted to this location because it is primed for development,” said Village President David DeGroot in an emailed statement.
DeGroot had been facing a tough reelection challenge from Kelly Gallaher, a vocal critic of the Foxconn deal. Gallaher was running with Kim Mahoney, another critic and the last remaining holdout at the Foxconn site after the Village cleared the area through eminent domain. Mahoney finally settled with the Village for $950,000 and moved away late last year. Both Gallaher and Mahoney lost their bids this week by several hundred votes.
Foxconn has pivoted repeatedly in the five years since then-President Trump announced plans for a 20 million square foot LCD fab he called the “eighth wonder of the world.” After it quickly became apparent that an LCD factory did not make economic sense, Foxconn announced it would build robot coffee kiosks, servers, and other ideas that never came to fruition. During the height of the pandemic, it even announced that it would manufacture ventilators in Wisconsin with Medtronic, another plan which went nowhere. Internally, Foxconn pursued everything from dairy exporting to fish farming to make good on its investment in the state. Foxconn has also long insisted that a large glass orb on the site is actually a data center, even though it is actually office space and a conference center.
Foxconn insists large glass orb on the site is actually a data center, even though it is actually office space
In 2021, Wisconsin and Foxconn agreed to scale down their contract to reflect a far smaller project than the original fab. Under the new contract, Foxconn aims to create at least 1,454 jobs, rather than 13,000, and the state is on the hook for $80 million in credits rather than $3 billion. Foxconn has qualified for nearly $40 million of those credits so far and employed 768 people at the end of 2022, according to The Associated Press. Precisely what those people are doing remains unclear. Foxconn has said it is manufacturing servers, but it has also refused access to local journalists.
The debacle has proved costly to Mount Pleasant, which bulldozed dozens of homes in order to clear land for the project. According to an investigation by the Milwaukee Journal Sentinel earlier this year, the debt taken on by the Village amounts to 500 percent of its operating revenue. Village taxpayers have also paid $167 million to various contractors and vendors, including to Claude Lois, the politically connected consultant overseeing the project for $28,000 per month.