Microsoft Granted Final Approval for Wisconsin Data Center

Microsoft will take ownership of more than 1,000 acres of the Wisconsin Innovation Park for a multibillion-dollar data center.

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Microsoft Granted Final Approval for Wisconsin Data Center
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(Milwaukee Journal Sentinel) -- Microsoft by the end of December will join the list of the largest landowners in Racine County, Wisconsin.

The Racine County Board on Tuesday unanimously granted the final approvals needed for Microsoft to take ownership of more than 1,000 acres of the Wisconsin Innovation Park for a multibillion-dollar Mount Pleasant data center. Combined with 315 acres that the company previously purchased, Microsoft will control about two square miles of the business park that was created to bring Foxconn International Holdings to Wisconsin.

Racine County, as a partner in financing the development of the industrial park, needed to approve Mount Pleasant's sale to Microsoft of 631 acres of village-owned land north and east of Foxconn and a half dozen documents that revise previous agreements with Microsoft, Foxconn, and Mount Pleasant. The Mount Pleasant Village Board approved the $100 million land sale and those revisions on Monday.

County Executive Jonathan Delagrave called the board's vote "a historical day in Racine County."

"This opportunity provides one of the most successful, environmentally conscious, great employers for its employees to be right here in Racine County," he said.

The land sale and a separate purchase by Microsoft of 400 acres from the Creuziger family, who resisted the village's attempts to buy their land, are expected to close by Dec. 28.

Related:Microsoft To Establish Nine New Data Centers in Australia

Benchmarks the company must meet as a condition of the sale include:

  • A minimum of $1.4 billion of taxable property must be built by 2028 that will guarantee adequate annual tax revenue to cover payments on $330 million in debt owed by the taxing district created to fund development of the industrial park.

  • Four buildings must be built or under construction by 2044.

Microsoft's contractor, Walsh Construction has begun work on the first data center building on the land Microsoft owns at County KR and 90th Street. and has obtained permits to begin a second building. Microsoft has said those buildings would cost about $1 billion.

Share of Sale Proceeds Will Pay Off Racine County Debt

Racine County will receive $24 million from the land sale to pay off bonds it issued to help Mount Pleasant acquire the land and an additional $12 million for other debt owed by the village. Another $36 million will be held in a reserve account to secure the taxing district's debt obligations.

Foxconn Gives Up Development Rights

By giving up its options to develop the land Microsoft will own, Foxconn will be relieved of an annual special assessment it has been paying to cover the cost of extending sewer and water to the properties and other services.

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Proceeds from the land sale will be used to reimburse Foxconn for a $6 million special assessment that it paid earlier this year on the land Microsoft will buy and to repay $10 million it loaned the village to help it buy land.

The revised agreement removes all of Foxconn's obligations related to its initial plan to develop a $10 billion plant for making Generational 10.5 LCD screens, including all references to job creation or maintenance. The project, when it was pitched in 2017, was promised to create 13,000 jobs.

Based on that promise, lawmakers put together a multibillion dollar subsidy package and local government spent millions buying property and preparing it for development. Today, Foxconn employs about 1,000 people who make servers for data centers and electronic devices for rooftop solar arrays.

The revisions do not change Foxconn's obligation under the 2017 agreement to create $1.4 billion in taxable property value or pay the equivalent of taxes on that value. Foxconn's buildings are assessed at less than half that amount, and the company will owe a $14.3 million make-up payment in 2024.

This article originally appeared in the Milwaukee Journal Sentinel

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