MOUNT PLEASANT, Wis. — Microsoft Corp. has taken a significant step forward in its plans to build a 315-acre data center campus after the Mount Pleasant Village Board approved three agreements related to the development.
Microsoft plans to develop a $1 billion data center campus on the property, which Foxconn Technology Group originally planned to make large-screen televisions. The agreements include a purchase and sale agreement that allows Microsoft to purchase about 315 acres of land within TID 5 for $50 million.
“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,” said A Microsoft spokesperson.
The agreements do not say how many people Microsoft plans to employ.
“The potential benefits of Microsoft’s planned investment cannot be overstated,” said Village of Mount Pleasant President David DeGroot.
Sale would reduce Foxconn’s tax burden
The Village of Mount Pleasant originally purchased — and currently holds the deed to — the property on behalf of Foxconn for a 2,500-acre technology park.
If the agreements receive the needed approvals, the proceeds from the $50 million land sale would be paid to Foxconn, which initially paid the Village to acquire the property.
Hoping to build a political legacy, President Donald J. Trump mused in 2018 that the expansive Wisconn Valley Science and Technology Park in Mount Pleasant would be the “Eighth Wonder of the World.”
The first phase of the project — while still a substantive investment for the area — is slightly more than one-third of what Foxconn initially proposed in 2017.
With the Village of Mount Pleasant financing over $700 million in infrastructure and land acquisition costs, Foxconn agreed that the tax revenue from the company’s portion of that building project would pay for those investments. This payment rested on the village’s ability to collect property taxes on $1.4 billion in property valuation to pay for the bond it took out.
Now, 315 of the 2,500-acre project will become home to Microsoft.
The agreements, which Microsoft officials signed with Mount Pleasant Village Board members, are subject to local approvals by the Racine County Board. They will consider the proposals at its April 11 and April 18 meetings.
Pending further approvals, site readiness work for the campus could start later this year.
“This project is an ideal fit for TID 5 and could attract additional high-quality growth for our area,” Degroot said.
What’s in the development agreement
According to village documents, Microsoft Corporation is entering into a development agreement with the Village of Mount Pleasant and Racine County related to this development.
If approved, the development agreement outlines the following:
• Microsoft will construct a data center campus at a cost of more than $1 billion on the land it purchases in TID 5. Construction is anticipated to commence:
▫ Phase 1: not later than July 1, 2026
▫ Phase 2: not later than July 1, 2033
• Microsoft will be eligible to earn back some of its investment as it builds buildings:
▫ Payments are contingent on the Village having received sufficient Tax Increment Revenue to have first paid all other TID obligations.
▫ Microsoft may recoup 42% of the annual incremental property taxes it pays on the improvements it builds, not to exceed $5 million per year for the duration of the agreement and the district.
• The Village and County have the option to repurchase the land being sold to Microsoft, at Microsoft’s original per-acre price, if Microsoft fails to commence constructing buildings by the stated deadlines.
An agreement between the Village of Mount Pleasant, Racine County and Foxconn to enable the Microsoft project in TID 5.
• The Agreement does not lessen any of Foxconn’s obligations under its development agreement. The Agreement does not provide Foxconn any new benefits.
• Just as existing municipal debt agreements pledge all TID 5 tax increments to pay down existing debt, the Agreement allocates new increment to be generated by Microsoft’s land purchase and development to pay down the prorated share of TID costs allocated to that area (12%).
• Foxconn releases all rights to the 315 acres of land in TID 5 that will be sold to Microsoft and consents to a Transmission Line easement on other land over which Foxconn retains acquisition rights.
• Foxconn will receive the proceeds from the Microsoft land sale (net of costs) as partial reimbursement of the funds Foxconn advanced in 2017 to acquire lands in TID 5.
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