With agreement signed, Foxconn era begins in Wisconsin with pomp, circumstance and a rush for land
The ceremonies are over and the land rush is in full stride as southeastern Wisconsin braces for the entry of Foxconn Technology Group.
Thursday at the Milwaukee Art Museum was all about pomp and circumstance as Gov. Scott Walker signed a memorandum of agreement with Terry Gou, founder and chairman of Taiwan-based Foxconn.
"This is something that will say to the world, 'We have arrived,' " Walker told civic leaders gathered in the museum's Windhover Hall overlooking Lake Michigan.
Walker said Foxconn and Gou chose Wisconsin "because we're ready. We got our act together."
Gou told the audience: "This is our home, my home, Wisconsin."
Gou saluted Wisconsin leaders for trying hard to make the deal and singled out Walker for his tireless work in landing the firm.
"I have never seen this kind of governor or leader yet in this world," he said.
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Final details have to be ironed out in this colossal deal, with Foxconn planning to invest $10 billion in a display panel plant in southeastern Wisconsin.
Foxconn could employ up to 13,000 workers, and draw up to $3 billion in subsidies from state taxpayers over 15 years. It would initially employ 3,000 workers making an average of $53,900 a year plus benefits.
But all that investment needs land.
If Foxconn moves forward it would assemble a huge site by paying likely tens of thousands of dollars an acre for farmland that typically sells for much less.
Land prices skyrocket
But such price inflation isn't unusual when a big development is brewing.
Two people who own land in one of the potential Foxconn development sites have told the Journal Sentinel that they are being offered $50,000 an acre for their properties, which are mainly farmland.
Neither has granted the would-be buyer an option to purchase. One of the landowners described feeling pressured and being told the price would only be good for several more days.
Both asked not to be identified.
They are among several property owners in a roughly 1,000-acre area of Mount Pleasant and Sturtevant, in Racine County.
That site appears to be in play, but officials involved in the effort to land Foxconn aren't tipping their hand.
In any event, the Mount Pleasant-Sturtevant area is not alone. Officials appear to have several sites lined up in southeastern Wisconsin, and not just in Racine and Kenosha Counties — the focus of media speculation.
"There are multiple locations in southeastern Wisconsin that have been vetted by this company and are being actively considered," Jim Paetsch, vice president of the Milwaukee 7 regional economic development group, said Thursday. "The company is going to make a decision based on their financial and operating interests."
One limiting factor: Foxconn must have access to Lake Michigan water. Within the M7 region, that would rule out such communities that lie entirely within the Mississippi River watershed — areas such as Walworth County, western Kenosha and Racine Counties and much of Waukesha County.
Over the past year, farmland sales in Mount Pleasant and Sturtevant have included prices generally ranging from about $7,100 to $7,700 an acre, according to state real estate records.
When a farmer knows there are specific development plans, the selling price naturally goes up.
In October 2014, a pair of Kenosha County parcels just west of Interstate 94 were sold by members of the Drissel family to an affiliate of Chicago-based Bridge Development Partners LLC for just over $10 million.
That amounted to $55,156 an acre, according to state real estate records.
That 182-acre site, near the Highway 142 interchange, was then sold by Bridge Development to an affiliate of packaging material distributor Uline Inc. for $20.2 million, or $111,036 an acre.
The Pleasant Prairie-based firm in July 2014 had announced plans to relocate its Midwest distribution business from Waukegan, Ill., to an office building and huge distribution center that would be built at that site.
That jump in land prices, from what a development firm pays a farmer to what that firm than receives on the next sale, isn't unusual.
Firms like Bridge Development often face significant expenses for developing the land before selling it to the end user.
Also, a developer sometimes assumes some risk in finding an end user to buy the property.
At that same Kenosha interchange, an affiliate of Madison-based Next/Partners Inc. bought farmland, east of I-94 and south of Highway 142, in 2010 and 2012 with the idea of creating a business park.
Next paid around $28,000 an acre, said Phil Jennings, the company's president.
Jennings later helped draw Amazon.com Inc., which in 2013 announced plans to develop a huge distribution center there.
The Next affiliate that year sold 158 acres to an affiliate of development firm KTR Capital Partners for $17.5 million, or $110,867 an acre, according to state real estate records.
KTR Capital developed a sorting center and a connected fulfillment center, and is leasing the combined facility to Amazon.
The ceremony at the art museum brought together not just leaders of business, but also politicians from both sides of the aisle.
Walker extended thanks to many federal and state politicians including his two-time gubernatorial rival, Milwaukee Mayor Tom Barrett.
Barrett welcomed the audience to what he termed the "fresh coast," and linked the Foxconn investment to other industry that flourished on the Great Lakes.
"It has been a remarkable partnership to get to this point," Walker said of the project.
"You can see, this isn’t just big, it’s super big," as he described plans for the massive project.
At the end of the ceremony, the wings of the museum's brise soleil were opened, symbolizing the code name Foxconn gave to the project: Flying Eagle.
Journal Sentinel reporters Bill Glauber, Patrick Marley and Jason Stein contributed to this report.
Tom Daykin can be reached attdaykin@jrn.com