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James Palenick, City AdministratorWith Foxconn Technology Group poised to build a 20 million-square-foot manufacturing facility in Mount Pleasant, the ripple effect it could have on the hotel and event center could make the project “bulletproof,” said city administrator Jim Palenick.

More than 10,000 construction jobs and 3,000 permanent jobs are expected to be created over the next four years. With the influx of more people in the region, Palenick sees a number of ways Foxconn could impact the project.

Read more about Foxconn.

“It could become a greater project with a bigger development and I can definitely see more opportunities for new revenue sources,” he said.

This could sway public support for the project, which has been widely criticized because of its reliance on taxpayer funding and the question of whether the facility would get enough use.

Palenick lays out the Foxconn effect

If approved, the hotel and event center would be on the corner of Gas Light Drive and Lake Avenue. City of Racine property owners would be on the hook for $11 million of the $55 million event center. But those costs could be defrayed by a number of Foxconn-related benefits.

“Any time a new development comes in, it has an economic benefit to us in Racine,” Palenick said.

With Foxconn coming into the region, Palenick believes there will be an opportunity to charge more for naming rights, having a larger hotel and higher occupancy rate — all of which could eliminate or reduce the impact on how much taxpayers could pay for the project, Palenick said.

“There will be 10,000 construction workers looking for a place to live and we know we don’t have the hotel space for that,” he said. “So it’s feasible that if Racine residents wanted to rent out a room through Airbnb and with Wisconsin mandating that room taxes be paid to the community on those, so we could see a dramatic infusion of cash here because of that.”

The event center proposal calls for funding from a variety of revenue streams, including a hotel incremental property tax, hotel occupancy tax, cell tower lease, anchor tenant capital contribution, ticket surcharge, intergovernmental funds, City of Racine Levy Contribution and other funding partner contribution.

The city will also ask Real Racine, which is funded by the hotel tax, to agree to divert the hotel tax revenue collected on the new hotel to go to the city to pay off the debt service for the loan.

The hotel and event center project comes with about 300 to 350 construction jobs for about 12 to 18 months, 100 full-time hotel jobs, and 130 to 150 full-time jobs to the event center. Staff also expect $7 million in new spending and 50,000 new visitors annually.

But the project has critics.

When Racine County Eye ran the story about the funding of the project in June, a number of people in the community said they opposed the taxpayer-funded portion of the project and have been skeptical of how much the facility and hotel would be used.

James Wagner wrote on Facebook: “Really horrible idea. This idea burdens taxpayers with little in return. How’s the big entertainment at Festival Hall? Minor League hockey won’t bring in enough revenue. Hey, administrators how about asking Milwaukee County to foot some of the bill like Racine County does for Miller Park.”

Still, Palenick is “optimistic” about the deal coming together, even though both mayoral candidates — Sandy Weidner and Cory Mason — have said that they oppose the project.

Where things stand now with event center

In July, the Racine Common Council approved a nonbinding resolution that outlined 10 conditions that would need to be met for the event center to be approved. Since then, the staff has continued to work on meeting those conditions.

Four hoteliers have responded to the City’s request for proposal on an adjacent hotel that would be attached to the event center. The city is currently reviewing those proposals. The selection of the preferred developer is expected this month with staff anticipating starting the negotiations in November.

Officials with VenueWorks, the company that operates Festival and Memorial hall, are putting marketing pieces together and making appointments with firms for naming rights of the venue. With Foxconn manufacturing LCD screens and knowing the likelihood of those products being used in an event center, Palenick believes this could be an opportunity for Foxconn to feature their products.

“I have a hard time believing they wouldn’t want their products featured there so that people can see the latest technology they make,” he said.

They are also working on finalizing an agreement with a USHL minor league hockey team to be an anchor tenant there, he said.

Within the next 30 to 45 days, city staff will make its presentation to the Common Council outlining further details on the project.

“It’s happening exactly the way we planned it… It will continue unless we stop it,” he said.



Denise Lockwood has an extensive background in traditional and non-traditional media. She has written for, the Milwaukee Business Journal, Milwaukee Magazine and the Kenosha News.