Hopes, Fears in $10 Billion Wisconsin Foxconn Deal

When Gonzalo Perez bought the Castlewood Restaurant last December, it was one of the few outposts among the nearby corn and soybean fields hungry farmers could depend as a place to dine out.

It could become much more than that for Perez.

“It’s my lottery ticket,” he told VOA.

That’s because one of the largest economic development projects in the United States is moving in… right next door.

Taiwanese company Foxconn plans to build a massive flat screen manufacturing and technology facility in nearby Mount Pleasant, employing thousands of workers when completed.

It’s only a few kilometers away from Perez’s restaurant, and he hopes to start cashing in… soon.

“I hope I get a lot of business from construction people in the beginning,” he told VOA from the dining room of another restaurant he owns in a neighboring town which could also benefit from the economic boom the project could bring to the entire region.

WATCH: Foxconn deal

​ “You are going to probably bring a lot of hotels to the area, bring a lot of chain restaurants to the area. This is a big industry,” Perez explained.

“As they build this facility they are going to require 10,000 construction employees, plus around another 6,000 indirect employees,” says Mark Hogan, Secretary and CEO of the Wisconsin Economic Development Corporation, or WEDC. 

“When this ecosystem is up and running in the state of Wisconsin it will be an additional 13,000 employees to the state, and another upwards of 20,000 indirect or induced jobs.”

Hogan’s WEDC is one of the chief institutions in the state that worked on the deal to attract Foxconn to Wisconsin.

“We passed special legislation which really created a pathway for the company to be successful in the state. And that had to do with environmental regulations. It had to do with incentives. It had to do with a lot of different things that just kind of cleared a pathway. All things that every other company in the state would have to comply with, but we wanted to create a faster lane for the company to be able to operate under.”

In the package offered to Foxconn is approximately $3 billion dollars in tax incentives if the company invests around $10 billion dollars in its facility and workforce. But those incentives meant to entice the company were also a concern among its critics.

“This is the largest in U.S. history, and it was somewhat surprising because Wisconsin does not generally play this game,” says Steven Deller, Professor of Applied Economics and an Economic Development Specialist with the University of Wisconsin, Madison.

 Deller says one of his concerns, not just as an academic but also as a taxpayer, is the potential for the state to actually owe money to Foxconn.

“But there is the Wisconsin Agricultural and Manufacturing Tax Credit,” he explained to VOA. “The way that the taxpayers may be on the hook for paying some money, if Foxconn is not paying taxes, and they have a tax credit, that means the state is paying Foxconn. So a lot of it is going to hinge on how big that facility becomes. Right not its starting at 3,000 – it could go up to 13,000. We have no idea how big it will actually become.”

For Gonzalo Perez, who came to the U.S. from Mexico 30 years ago and worked his way up from being a laborer in restaurants to now owning two of them, his biggest concern isn’t the size of the plant’s workforce or the tax incentives … it’s the potential increase in the number of his customers.

Right now he says about 200 people visit his restaurant on a good day.

“I hope to triple that,” he says.

He may not have to wait long to see an uptick in business. 

Groundbreaking on the new facility is planned for 2018, and as many as 1000 Foxconn employees could be working in the state later that year. 
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