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The agreement carries forward many of the commitments from the memorandum of understanding, said attorney Alan Marcuvitz. But it also includes the village and the county issuing a large amount of debt, $764 million, to pay for infrastructure and other requirements in the agreement.
For its part, Mount Pleasant will issue a total of $195 million in principal debt, $140 million will be in tax increment revenue bonds, tied to the TID for the development, and another $55 million through a Clean Water Fund Loan, which is a program from the state that provides low-interest loans, normally for sewer infrastructure.
Because the earliest date that increment revenue can come into the village is 2020, part of the money being borrowed now will be used to make payments between until then. But the village is expecting to reach $1.4 billion in value from the project by 2023.
“The overarching security is the guarantee that we’ll have a minimum of $1.4 billion in valuation in area 1 alone,” said Todd Taves, a senior municipal adviser with Ehlers Inc.
In the event that the $1.4 billion in valuation is not reached, Foxconn would be required to pay an actual tax payment along with a payment making up the difference to $1.4 billion, Taves said.
The State of Wisconsin is also providing moral obligation backing for the $140 million in tax increment revenue debt being issued. So if revenue in the TID does not match the debt service, then the state legislature would consider an annual appropriation to make the payment.
A site plan for the plant has still not been provided but is expected by Dec. 1
The County Board of Supervisors will vote on the development agreement Tuesday and plans to go to the bond market by Dec. 5.
The village board also voted in favor of the proposed intergovernmental oversight panel for the Foxconn project.
The panel would be comprised of the Mount Pleasant Village President and the Racine County Executive, as well as a trustee from the village board and a county supervisor.
“They really have become nothing other than the agency, the joint agency, of the county board and the village board,” Marcuvitz said.
The panel will manage land acquired by the village in area 2 and 3 of the project map, and will also have the power to borrow money for the project if it is directed by the village board. The panel will only be able to take action by a unanimous vote.