Monday, November 27, 2017

Fox-con means Racine Co taxpayers pay big to make others leave Racine Co

As mentioned before, the state giving up to $3 billion to Foxconn isn’t the only taxpayer cost that will result from this scam. Local taxpayers are going to be hook for a whole lot in this deal as well, as last week’s Racine County Board meeting reminded us.
The [Racine] County Board on Tuesday approved bonding up to $80 million to help with interim financing to purchase land in Area One of the proposed project. That area lies between Interstate 94 and Highway H, and Highway KR and Braun Road.

The money also will help with financing for other project expenses. Of the $80 million total, $70 million will go to purchase land in area one, $5 million for financing other project expenses, $3.5 million to pay for the capitalized interest on the bonds during 2018 and 2019, and $700,000 for professional services.

Brian Della, senior managing consultant for PFM Financial Advisors, said the debt will eventually be paid for by the Foxconn project…..

To speed up the process, Della said it is important for the county to get the money before it starts buying property.

“We thought it would be most prudent to have the money in hand before you start exercising $70 million worth of (land purchase) options,” Della said. “Because, say this deal doesn’t go through, it would be tough to find $70 million laying around in sofa seats.”
So in addition to the fact that many individuals in Mount Pleasant and the surrounding area will be forced out of their houses (and it’s up for debate whether the amount of money they are getting is an acceptable trade), Racine County will go into significant debt to get the money to buy these people out. In addition, whoever remains in Racine County will be the ones paying back that debt over several years, since Foxconn’s land is in a TID that won’t be paying taxes for up to 25 years.

That TID is also going to include major costs for upgrading roads near the Foxconn site. It seemed sadly notable that there was a fatal car vs. semi-trailer accident on Highway 11 over the weekend where the truck crossed in front of the car to enter I-94, and the car’s driver was killed. The spot of the accident is the north end of the proposed Foxconn campus.

Roads such as that Highway 11, I-94, and other nearby roads will likely have major increases in traffic and capacity needs as a result of the Foxconn facility. We know that there is over $250 million in General Fund money being poured into I-94 as a piece of Robbin’ Vos pork related to the Fox-con, but local roads and state highways will also need upgrades, and that will go into the tax-free area of Foxconn’s district. That means all other taxpayers in the county, town, and/or village that have Foxconn-related roads and other infrastructure projects will be the ones shelling out for those costs.

And you gotta love the $700,000 the County has set aside for “professional services” related to land purchases. That’s a private contractor helping to put together the deals and their proper documentation. It reminds me of the excellent story by Lawrence Tabak in Belt Magazine from a few weeks ago, and how one industry that is seeing a pickup in business with the Fox-con are well-connected land speculators and deal-makers.
On October 11, some 100 affected people, many of them senior citizens, gather in Mt. Pleasant’s municipal hall to learn more about their fate. The session is conducted by Madison-based Peter Miesbauer, heir to G.J. Miesbauer & Associates, “right of way acquisition specialists.” One of a growing list of contractors brought in by Mt. Pleasant to work the Foxconn deal, Miesbauer patiently listens to the often quite specific questions and answers in repeated generalities, restating the statutory definitions of property acquisition and the statutory requirement that the buyouts will represent “fair market value.”…

The next night I queue up with local residents in the marble-floored entranceway of the main room of Racine City Hall, built in 1924 in the standard-to-the-time neoclassical style. Carved into stone above the doorway in two-foot letters is Virgil’s proclamation that “The Noblest Motive Is the Public Good.” Inside are booths highlighting the various components of Foxconn and the local project, set up and manned by staff from Mueller Communications, a Milwaukee-based PR firm, another of the many contractors already engaged by the Village of Mt. Pleasant, all to be paid via the village and county’s massive Tax Increment Financing project.

I speak to one of the large landowners in the area who had already been contacted by Milwaukee-based real estate firm Pitts & Brothers with a hard-sale offer to sign a purchase option at $50,000 an acre for his 40-acre lot. The price per acre is several times the going rate for agricultural land in the area, a multiple that homeowners on smaller lots will not be receiving via eminent domain. Nevertheless, the landowner, who preferred to remain unnamed, believes his land is worth twice as much, and has several objections to the offer: he says it undervalues his property, it doesn’t include several acres of road front, and includes a 5% commission taken from his end, which would mean paying Pitts close to $100,000 for the hour or so they devoted to explaining the offer. (A principal of the Pitts firm, Michael Pitts, is an enthusiastic Republican donor, so much so that he was cited for exceeding the legal contribution limit to the Republican candidate for Wisconsin governor in 2003.) The landowner rejected the Pitts offer and made a counteroffer to the village, but has yet to hear anything back.
When you connect the stories, it becomes obvious that Fox-conn will benefit an exclusive club of connected, rich individuals, while the overwhelming majority of the rest of us pay the costs for them. And most of the people of Racine County will be in that group paying up for a development that may do little when it comes to improving their job prospects or quality of life.

But hey, they’ll be able to get plenty of assembly line jobs that (maybe) pay $15 to replace whatever they’re doing now, and they’ll need it to pay for the added property taxes that’ll be coming in the next 2 decades as a result of the Fox-con. So enjoy those crumbs down in SE Wisconsin!


  1. Well, it's nice to see the jackholes on the left have moved their 'argument' from "It'll never be built in a million years!!" to "Onnnnlyyyy some landowners will benefit, waaahhhhhh!!!"
    Yeah, the people that own the land will generally benefit from the sale to a multi-billion dollar industrial conglomerate. Or is that too sophisticated of a concept to understand for a "Master's Degreed" state worker who is an idiot jizzrag like yourself?

    1. Oh, it'll be much better if the Foxconn falls through for about 99% of us. The only "landowners" who are benfitting are speculators and mega-farms.

      What if you're a landowner that was planning to raise your family in Racine County and now are being shoved off the land for a substandard offer? Fuck em?

      And what if you live just outside of the Foxconn land-grab area, and have to deal with massive increases in traffic along with environmental runoff. And oh yeah, you also get a huge increase in property taxes because of Foxconn's TID district. Screw them too, right?

      This thing is a SCAM, Bradley Boy ("idiot jizzrag"? Are you 12?). Now back to the timeout chair. Enjoy your dirty nickel.

    2. WashCoRepub is quite the cynical creature for his GOP team. Yet you spout off, saying you think for the little guy, the less fortunate?

      What exactly is your gripe, Wash. Cty., considering that Jake makes valid points about the negative aspects of this deal. It really is a scam, and you should be thankful that West Bend taxpayers aren't saddled with having to pay all the local costs for this. West Bend certainly isn't the center of economic development, so why be so on-bored with Walker and WEDC?

      Oh yeah, West Bend doesn't border Lake Michigan, which seems to be a big factor, unless you ask the DNR.

  2. PT Barnum lives. Seven years out from taking office under Walker's policies, Wisconsin is dead last in new business creation (yes, 50th out of 50 states), and below national averages in both wage growth and job creation. We have a reasonably low U3 rate, but this partly do to solid job opportunities WI workers avail themselves of in MN and IA. Many far from those opportunities stop looking for work. Many others simply leave the state. Heck of a way to achieve low unemployment.

    Moreover, Walker failed to keep his 'minimum-acceptable' jobs pledge. His solution? Throw a $3billion Hail Mary Pass into Illinois' endzone where many IL workers will have a chance to grab jobs created at $230,000 a pop by the WI taxpayer.

    This would be pure comedy if not so tragic....