In April, the owners of Apple Holler, an orchard in the southeastern Wisconsin town of Sturtevant, will be getting ready to plant 2,500 apple and peach trees on land just west of Interstate 94.
Across the highway in Mount Pleasant, Taiwanese electronics giant Foxconn and the state of Wisconsin are getting ready for growing season, too, with plans to break ground on a state-of-the-art liquid crystal display manufacturing plant — big enough to hold 11 Lambeau Fields or roughly five Merchandise Marts — on 1,200 acres that today are mostly farmland, bounded by sleepy two-lane roads.
Wisconsin officials have committed to spending up to $3 billion to lure the project backers say could transform the area’s economy.
For the region — including portions of northern Illinois — there is a tantalizing prospect of building an advanced manufacturing hub around the project. But there are also questions about whether Foxconn, which has failed to follow through on ambitious U.S. factory announcements in the past, will deliver on its sizable promises — and, if it does, what that will mean for existing businesses that have trouble filling jobs and for residents watching to see whether Foxconn will be a good neighbor.
Both the excitement and the uncertainties are magnified by the unprecedented scale of the project and rapid pace at which it’s moving forward.
“I’m pro-business, so I’m glad to see it, but it’s a little like a freight train coming down the track,” said David Flannery, the owner of Apple Holler.
Plans for a Wisconsin Foxconn factory were announced in July. In October, the company announced it was headed to Mount Pleasant, a village of 26,400 people about 60 miles north of Chicago. Earlier this month, Wisconsin Gov. Scott Walker and the company’s billionaire founder, Terry Gou, signed a contract outlining what is reportedly the largest state tax incentive package offered to a foreign company in U.S. history.
Local agencies and institutions have jumped to keep up with the fast-moving timeline.
Mount Pleasant emerged as a candidate in the site selection process as one of the few places in the Southeast Wisconsin congressional district of House Speaker Paul Ryan that not only had a parcel of undeveloped land big enough for Foxconn’s main facility as well as acreage that could accommodate either expansion of the main plant or for suppliers that are expected to follow Foxconn.
Located in eastern Racine County, parts of the 34-square-mile village, which only incorporated in 2003, feel sleepy and rural. But follow the highway farther north and warehouses and business parks pop up. Look to the east and spacious properties surrounded by open fields make way for denser neighborhoods, and the main road through Mount Pleasant, headed to Racine and Lake Michigan, is lined with shopping centers, hotels and car dealerships. The largest employment sector is the retail trade, and less than 2,000 people work in manufacturing, according to a 2017 report by the Racine County Economic Development Corp.
Roger Klinkhammer, who’s lived in the same ZIP code for 72 of his 73 years, said he’d rather the state invest in small businesses and “grow a little at a time.”
His objection is at least partly personal.
The retired insurance salesman and his wife Dianne, a retired executive secretary, live on 1.25 acres that’s within the boundaries of the Foxconn project. They said they will have to move make room for development, leaving the dream home they built 10 years ago exactly to their liking, down to the wet bar where Roger fixes brandy Old-Fashioneds and garden where Dianne feeds the birds.
“I don’t want somebody else’s house,” Roger Klinkhammer said. “I want my house.”
Before pitching the site to Foxconn, local officials negotiated land sales with some larger property owners. But some residents, like the Klinkhammers, said they found out after the site was announced that their homes were part of the Foxconn parcel and are waiting to hear how the village will acquire and compensate them for the land.
The uncertainty has some people on edge. At a community meeting in mid-October, shortly after Mount Pleasant was announced as the future home of the Foxconn project, dubbed “Flying Eagle” internally, some who arrived hoping for information on the relocation process grew frustrated when officials had few details to share.
“A lot of you feel we are running down the hallway with scissors, and to be bluntly honest, I think we are,” Mount Pleasant Trustee Gary Feest told the crowd.
The village has since begun dealing with owners of about 70 properties affected by road construction related to the project. The appraisal process is expected to begin next month.
The project will cause some disruption, but the prize is too big to pass up, Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce, said in an interview. “If we’re not willing to take risks and we’re not willing to sometimes move with the disruptions that come, we’re going to get left behind,” he said.
Wooing Foxconn wasn’t just about winning one factory. Sheehy envisions Foxconn attracting new companies working on developing applications for the LCD technology in medicine, security and advanced manufacturing.
“Not everybody’s a fan of change,” said Jenny Trick, executive director of the Racine County Economic Development Corp. “But the change is so impactful, that’s why it’s all hands on deck.”
In addition to the $3 billion Foxconn is in line to receive at the state level, another $764 million in local incentives are awaiting approval in Mount Pleasant and Racine County later this month. The actual amount of incentives the company receives depends on the number of jobs created.
Local officials say both agreements include provisions to protect taxpayers if Foxconn shuts down, moves manufacturing operations out of state, or fails to hit minimum employment requirements. Under the state development agreement, Foxconn CEO Gou would be personally liable for 25 percent of any clawback payments.
If Foxconn does hit its benchmarks, it will invest at least $9 billion in the facility. It must employ at least 260 workers by 2018 and 3,640 by 2021, 7,800 by 2024 and 10,400 by 2027 to get any job-related tax incentives,. It would need to eventually hit 13,000 to earn the maximum payout. Foxconn would need to pay those workers at least $30,000 annually, with an average salary of at least $53,875 — slightly below the county’s median household income, $55,584, according to the most recent U.S. Census Bureau data.
The jobs, though, will bring increased demands on the area’s roads, infrastructure, public safety, housing, schools and services, and Southeast Wisconsin leaders are scrambling to prepare.
Then there’s the issue of finding 13,000 employees for an area where ‘help wanted’ signs already hang.
Racine County’s unemployment rate was 4.7 percent as of August. A few miles south on I-94 from the future Foxconn site, Amazon and Pleasant Prairie-based shipping supplies firm Uline have posted roadside “now hiring” signs outside their warehouses.
Amazon has already hired thousands at its distribution center in nearby Kenosha, but Rich Meeusen, CEO of Milwaukee-based water meter-maker Badger Meter, thinks Foxconn will have a much bigger effect on his recruiting efforts because its hourly pay is expected to be higher than Amazon’s.
“I think there will be some wage inflation, but more significantly, it’s going to be tough to find people if it sucks up the number they’re talking about,” Meeusen said.
When Foxconn announced plans for a southeastern Wisconsin facility, site selection experts said proximity to Illinois’ workforce was likely a draw. But Racine County is working on a national recruitment strategy, and local colleges and universities say they’re already working to expand the pipeline of skilled workers at the request of area employers.
Kenosha’s Gateway Technical College is adding advanced manufacturing curriculum with courses in mechatronics, robotics and data analytics, along with 29,000 square feet of new classroom and lab space. Gateway has about 300 students in its manufacturing programs, but hopes to more than triple that number, college President Bryan Albrecht said. The scale of Foxconn’s plans helped fast-track Gateway’s plans, with the state legislature contributing $5 million to the expansion, allowing Gateway to bypass a property tax referendum.
Economic development experts said they hope the attention Foxconn’s hiring plans have drawn, along with investments in workforce development, will attract job-seekers who wouldn’t have considered the region. “We need to fix the talent pipeline, not just patch it … Whether Foxconn is here or not, we should be doing this,” said Sheehy, of the Metropolitan Milwaukee Association of Commerce.
Investors are also planning ahead for the related businesses likely to follow Foxconn to Wisconsin. Jeffrey Rothbart, of Northbrook-based Stack Real Estate, who acquired an option to develop three properties totaling about 121 acres near Foxconn’s Mount Pleasant site, said land prices near the site are already “double or triple” what they were before the project’s location was announced. “I don’t believe people have wrapped their heads around the scale of this project yet,” he said.
Meanwhile, communities on both sides of the Wisconsin-Illinois border are rolling out the welcome mat. Illinois companies “are starting to do their homework” to see whether Foxconn could be a potential customer, and some employees recruited to Foxconn will likely choose to live in Illinois, said Kevin Considine, president of Lake County Partners.
North of the border, the Racine County Economic Development Corp. has already courted potential Foxconn suppliers and is working with communities looking to entice those businesses, Trick said. It also will administer a new loan fund that will help existing Racine County businesses work with Foxconn or attract talent, and recruit new Foxconn-related companies to the county.
But not everyone is willing to move so fast.
The desire to be expeditious — the reason officials have given for the decision not to require a state-level environmental impact study — worries some environmental advocates who are also wary of Wisconsin’s decision to waive certain state wetlands permit requirements.
Foxconn‘s most immediate future neighbors, meanwhile, are torn between excitement at the project’s promise and fears the new neighbor could leave their hometown unrecognizable.
“It’s taking away the ruralness,” said Gail Knapp, of nearby Raymond, who works at Apple Holler. “I think (Foxconn and local officials) are feeding us a line of bull.”
Mark Huntoon, 66, of Sturtevant, said he hoped Foxconn would pick Kenosha, a city of 99,631 about 13 miles away. The region would still get the economic boost, but Huntoon, who lives near the end of a dead-end road with a clear view of Foxconn‘s land, wouldn‘t have to deal with the factory or its traffic.
“I like the peace and quiet,” he said.
Ryan Zamecnik, 44, of Mount Pleasant, said the incentives gave him pause, but at a community meeting at Mount Pleasant’s village hall last month, he was optimistic.
“Kenosha’s had its big boom, and you’ve got Milwaukee to the north and Chicago to the south. It seems like Racine (County) has been saying, ‘When‘s it our turn?’ ” he said.
Twitter @laurenzumbach
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