'Grandiose expectations' brought Foxconn to Wisconsin, participants in town hall discussion say
Corrinne HessRACINE -- Unrealistic, grandiose plans with a touch of greed is how panelists at a Foxconn town hall meeting described the last five years since the mega factory was announced.
Mount Pleasant, a bedroom community of Racine, was catapulted to international prominence in 2017 when the Taiwanese-based manufacturing company announced its plan to invest $10 billion and create 13,000 high-paying high-tech jobs there.
Foxconn has massively scaled back those plans and it is unknown what the company is doing in Mount Pleasant in the four buildings it has constructed.
Lawrence Tabak, the author of "Foxconned: Imaginary Jobs, Bulldozed Homes, and the Sacking of Local Government," said every economic developer is looking for the next Silicon Valley. That's what Mount Pleasant and Wisconsin hoped it was getting with Foxconn.
"Why did the Foxconn development encompass 3,000 plus acres, when the factory — even what they were envisioning from the start — could be built on a 10th of that land?" Tabak said. "There was a grandiose expectation for what could happen and the fact that it didn't happen shouldn't surprise anyone who studies economic development."
Tabak was joined by Kathleen Gallagher, executive director of 5 Lakes Institute and a columnist for the Milwaukee Journal Sentinel; State Rep. Gordon Hintz, D-Oshkosh, and David Merriman, a professor of urban planning at the University of Illinois Chicago.
Kelly Gallaher, whose group, A Better Mount Pleasant, sponsored the event, said she did so because residents' questions were not being answered by village officials.
About 130 people attended the Wednesday night event at Gateway Technical College in Racine.
Gallaher invited the entire Mount Pleasant Village Board, Village Administrator Maureen Murphy; Mark Hogan, who helped forge the deal that brought Foxconn Technology Group to Wisconsin when he was the head of the Wisconsin Economic Development Corp.; Jenny Trick, executive director of the Racine County Economic Development Corp.; Tim Sheehy, president of the MMAC; and Claude Lois, who is Mount Pleasant's contracted consultant for the Foxconn project.
None of them replied or attended, Gallaher said.
Sheehy said the invite was disingenuous.
“ I was invited after the date was set, the panel was set, and it had been publicly announced," Sheehy said. "That’s fine, but it’s not an invitation, it’s an afterthought."
The audience had an opportunity to ask questions, which fell into two categories: Lois and Foxconn's obligation to pay Mount Pleasant.
Lois was hired in 2017 to manage the Foxconn project. He's an employee of Milwaukee-based engineering firm Kapur & Associates, but the village pays for his time.
Last year, the village board extended the contract with Kapur for Lois' work by two years and his pay was raised to $175 per hour. That amount is set to increase Aug. 21 to $200 per hour.
Lois served as the mayor of Burlington for four terms before deciding not to run again in 2008. After leaving the mayor's seat, Lois took a job as a division administrator for the Wisconsin Department of Revenue managing the state’s shared revenue program during former Gov. Scott Walker’s administration.
Merriman said most communities hire a consultant to manage a project, especially one like Foxconn, with such a large public investment.
In an interview, Merriman said it is unusual that a national search wasn't done before Lois was chosen.
Town hall audience members had questions about Lois' compensation and duties with the village. Tabak, who devoted a chapter of his book to Lois, said there are a lot of questions surrounding his work with the village.
"It's really frustrating because a lot of questions that I knew we would get tonight are questions that need to be answered by the public authorities and the professionals that are working at Village Hall, they are not here to answer those," Tabak said.
Foxconn's obligation to pay
Village officials have continued to defend the Foxconn project and the money they continue to spend saying the costs will be recouped.
Bills are paid using a $911 million special taxing district created by the village of Mount Pleasant and Racine County to pay for the local portion of the Foxconn project including land acquisition and infrastructure upgrades.
Foxconn is Racine County's biggest taxpayer, coming in at about $9.1 million in 2021. That is scheduled to jump to $30 million a year in January 2024. Mount Pleasant needs that money, considering its Foxconn-related debt is more than 500% of the village's operating revenue.
According to the contract, Foxconn should have about $1.4 billion worth of value with the village, producing $28 million in tax increment.
At this time, Foxconn's value is $11.5 million, which means it has to make the village whole, or beginning next year, face a penalty, said Hintz, who also serves on the state's economic development board.
Hintz believes Foxconn will follow through — if not, the company will lose its rights to develop further. He said the problem is that the village, and Foxconn, have not been transparent.
"If you are going to take taxpayer money, you have to be transparent and you have to be accountable," Hintz said. "If the company had said, 'you know what? there isn't a market for LCD panels, the labor costs are too high here, can't compete, we need to reimagine something, maybe people would have said OK, let's figure it out. Instead, they continue to just gaslight, and lie."
Gallagher isn't as confident Foxconn will follow through on any promises.
"The financial burden is on large part on the locals, who are carrying the debt and whose homes were torn down, the issue going forward is what happens if Foxconn doesn't make that tax payment, Mount Pleasant is bankrupt," Gallagher said. "Who is answering that question? Is Foxconn answering?"
More:Property owners near Foxconn say they were misled. Now their homes are gone.
Merriman, who has studied tax incremental financing since the 1980s, said it doesn't seem like it's in Foxconn's interest to continue making payments to the village.
"We don't know what will happen — people can tell you they know, but they don't," Merriman said.
"The basic question is, is the community better off than it was before? The burden hasn't fallen on the community, but the risk has. If Foxconn decides to default, Mount Pleasant is not in a good space."
Corrinne Hess can be reached at chess@gannett.com. Follow her @corrihess