Foxconn water deal could further boost growth in Mount Pleasant
MOUNT PLEASANT - A Foxconn-related deal pending between Mount Pleasant and the City of Racine includes a provision that promises to accelerate growth in the area even more rapidly by slashing water hookup fees on new development.
The agreement would cut the special fee charged for connection to the Racine Water Utility by more than 85 percent, saving thousands of dollars for a new home and tens of thousands for many commercial developments.
The existing, “very large” fee has held back growth in the area for years, said Alan Marcuvitz, an attorney for Mount Pleasant.
The fee reduction will apply throughout Mount Pleasant, Sturtevant and the City of Racine, all of which are served by the Racine Water Utility. It is part of a broader deal covering costs to extend water service to the massive electronics manufacturing campus Foxconn Technology Group is building in Mount Pleasant.
The overall arrangement, officials said, will ensure that the money to pay for the more than $100 million in expansion and improvement of the water supply system will come not from taxpayers but from revenue generated by Foxconn and expected nearby development.
FULL COVERAGE:Foxconn updates
The Mount Pleasant Village Board approved the agreement in concept Thursday evening. It now goes to the Racine Common Council and the Racine Water Utility.
Under the arrangement, Mount Pleasant will pay for about $100 million in new infrastructure to the Foxconn plant, which is expected to use millions of gallons of water a day for the water-intensive process of producing ultra-clean, wafer-thin display panels.
The village will borrow money for the capital costs and expects to be repaid through the new property tax revenue generated by Foxconn and other development across a tax incremental financing district that covers 6 square miles.
The water work is just one part of an estimated $764 million in infrastructure improvements, land purchases, additional public safety costs and financial incentives to Foxconn that are expected to be covered by new taxes on the factory and nearby development.
Besides the $100 million, the agreement calls for Mount Pleasant to guarantee that the Racine Water Utility has enough money to pay for an estimated $26.8 million in improvements required on the existing system — improvements necessitated in part by Foxconn.
Mount Pleasant also will draw on revenue generated by the TIF district to provide Racine with $150,000 a year to support its fire, police and emergency services, and the village will increase its funding of the local bus system from $240,000 a year to $340,000. As Foxconn develops, it is expected to increase bus ridership to Mount Pleasant.
The current water-connection fee is a one-time charge for new hookups to the system. The charge for a newly connected residence is $3,623, based on expected use of 72,000 gallons of water a year. Larger developments — apartment buildings, restaurants, factories — pay proportionally more based on their expected water usage.
The agreement would cut the charge for a residential connection to $500. Larger users would get proportionally larger cuts.
An average sized new hotel, for example, likely would pay about $14,000 with the new fee. At the current rate, that same hotel would pay about $100,000.
Calculations based on information on the Racine Water Utility website indicate that a restaurant such as Noodles & Company would pay $4,500 under the proposed arrangement, down from more than $32,000 now.
Money generated by the current connection fee goes to pay off the water utility’s existing debt. Under the agreement, Mount Pleasant would use tax-incremental financing money to help retire that debt.