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State Says No Tax Credits For Foxconn Without New Contract

Economic Development Head Says Deal With Tech Giant Must Be Renegotiated

Foxconn podium
David Cole/WPR

Wisconsin officials say Foxconn Technology Group won’t be eligible for billions of dollars in state tax credits unless it strikes a new deal for a scaled-back factory complex.

In a letter Monday to Foxconn Vice Chairman Jay Lee, Wisconsin Economic Development Corp. Secretary Missy Hughes said the agency has tried, but failed to amend the existing contract with the Taiwanese tech giant for a massive manufacturing facility in the southeast corner of the state.

When the original contract was signed in 2017, Foxconn promised to build a 22-million-square-foot plant in Mount Pleasant to make the latest generation of flat-panel displays. But since then, Foxconn has repeatedly changed course, downsizing plans for the factory and shifting focus to another entity, Foxconn International Internet (Fii) that is not mentioned in the contract with the state.

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“As we have discussed numerous times, markets, opportunities and business plans can and often need to change,” Hughes wrote. “I have expressed to you my commitment to help negotiate fair terms to support Foxconn’s new and substantially changed vision for the project.”

In April, Foxconn submitted forms to the state saying the company directly employed at least 600 individuals, more than 520 minimum needed for the state subsidies. But under the contract, the goal was to have 2,080 full-time jobs and more than $3.3 billion in capital expenditures by the end of 2019.

According to a project verification letter sent Monday, the company “employed fewer than the minimum required 520 Full-Time Employees and had invested roughly ($300 million) in capital expenditures.”

According to the letter, Foxconn employed 281 people in 2019.

Still, WEDC emphasized that regardless of the numbers that Foxconn reported, they would not be eligible to receive tax credits because the company has refused to renegotiate the original contract.

“Once Foxconn is able to provide more accurate details of the proposed project, such as its size, scope, anticipated capital investment, and job creation, WEDC would be able to offer support for the project with tax incentives as it does for many large and small Wisconsin businesses” Hughes wrote.

Foxconn has continued to remain opaque about their plans in Mount Pleasant. Last month the company released a statement saying it completed the steel frame for a dome that would become a network operations center.