Foxconn may use the Foxconn land in Wisconsin for a meaningful technology project, but not by Foxconn.
The Mount Pleasant village board voted last week to allow Microsoft to construct a data center on the land that was previously used for Foxconn’s LCD fab. Microsoft will purchase the land at $50 million. Some of this will be used by Foxconn to repay it for its release rights. Foxconn is not expected to be involved in the operation of the data center.
This announcement was made days before an election where incumbent board members narrowly defeated challengers who were critical of Foxconn’s deal.
Rusty Schultz, Foxconn spokesperson, declined to comment. Instead, he pointed to an unattributed statement published in other outlets which ambiguously suggested that Foxconn was partnering with Microsoft.
Microsoft will be eligible to receive $5 million per year in tax credits
According to the development agreement, Microsoft will construct the $1 billion data centre on the 315-acre parcel that Foxconn was previously given. Construction should begin no later than 2026. The Village will be able to pay off some of its debts in order to prepare the site for Foxconn’s new LCD factory. Microsoft will be eligible to receive $5 million per year in tax credits based on the improvements made to the land. Although neither Microsoft nor Village have stated how many jobs they will create, given the automated nature of data centers it is likely that there will be very few.
Brad Smith, Microsoft’s chief legal officer and president, is originally from Appleton in Wisconsin. The company has made significant investments in Wisconsin, including the Titletown Tech project in Green Bay. The company is not open to discussing its Mount Pleasant plans.
“Our long-term commitment to Wisconsin’s local communities is part of Microsoft’s data center campus investment plans with Racine County and the Village of Mount Pleasant. Frank Shaw, the company’s spokesperson, said that they look forward to their work. The company did not provide any further information about the project or answer any questions.
The Foxconn deal was deemed vindicated by the village board, which viewed Microsoft’s entry as a victory for them. In an email statement, David DeGroot, Village President, stated that Microsoft was attracted to the location because it is ideal for development.
DeGroot was facing a difficult reelection challenge by Kelly Gallaher who is a vocal critic to the Foxconn deal. Gallaher was running alongside Kim Mahoney (another critic and last remaining holdout at Foxconn site). Mahoney settled for $950,000 with the Village and then moved on late last year. Gallaher and Mahoney both lost their bids by several hundred votes.
Foxconn has pivoted repeatedly over the five years since then. In fact, President Trump announced plans to build a 20-million square foot LCD factory. It even declared that it would produce ventilators in Wisconsin together with Medtronic during the height of the pandemic. Another plan was abandoned. Foxconn tried everything internally, from exporting dairy to fish farming in order to recoup its state investment. Foxconn also insists that the large glass orb at the site is a data center. However, it is office space and a conference centre.
Foxconn insists that the large glass orb at the site is a data center even though it is actually office space.
Foxconn and Wisconsin agreed in 2021 to reduce their contract to reflect a smaller project that the original fab. Foxconn now aims to create at most 1,454 jobs rather than 13,000 and the state will pay $80 million in credits instead of $3 billion. According to The Associated Press , Foxconn has been granted nearly $40 million in credits and had 768 employees at the end 2022. It is unclear what exactly these people are doing. Foxconn claims it manufactures servers but has denied access local journalists.
Mount Pleasant has been hit hard by the debacle, as it bulldozed many homes to make way for the project. The Village has taken on 500 percent of its operating revenues, according to an investigation done by the Milwaukee Journal Sentinel. The Village has also paid $167 millions to several vendors and contractors, including $28,000 monthly to Claude Lois (a politically connected consultant).