Foxconn Technology Group is constructing an advanced display manufacturing campus comprised of multiple buildings to produce liquid crystal display (LCD) panels for a variety of industries. The Village of Mount Pleasant was chosen in 2017 as the site for these facilities. To aid the new manufacturing campus, the Village needed to extend utilities and other infrastructure at a cost of $200+ million.
Village officials engaged Ehlers for debt issuance & management, financial management planning and economic development and redevelopment services. As the Village’s longtime advisor, Ehlers developed a plan of finance for the public improvements needed to support the new Foxconn facility, assisted in the negotiation of terms with Foxconn and advised on the issuance of debt. New revenues generated by the project will reimburse the Village for its infrastructure costs, while minimizing financial risk.
Ehlers prepared extensive modeling and sensitivity analysis. The statutory tool in Wisconsin for capturing future tax revenue is a Tax Incremental District (TID), which Ehlers created on behalf of the Village. We also advised on special legislation needed for successful project implementation.
Ehlers conducted an RFP process leading to selection of five underwriters to form the deal team for issuance by the Village and Racine County of approximately $375 million in obligations. To date, the Village has issued:
» $120 million Tax Increment Revenue Bonds with a State of Wisconsin Moral Obligation Pledge
» $83 million Sewer System Revenue Bond Anticipation Notes (Private Placement)
Initial site work and construction of a 96,000 sq. ft. multi-purpose building were completed in 2018. In 2019, construction commenced on a nearly 1 million sq. ft. advanced manufacturing facility with roof installation and weather-tight enclosure completed at year’s end. Manufacturing operations commenced in 2020. Also under construction is a nearly 260,000 sq. ft. Smart Manufacturing Center and High Performance Computing Data Center. Ehlers participation resulted in the:
» Passage of legislation providing additional flexibility for the Tax Incremental District and providing authority for assignment of the State’s Moral Obligation pledge as credit enhancement for a portion of the project debt.
» Approval of a Development Agreement providing substantial protections for the Village and its County & State partners including:
- Project valuation guarantee of $1.4 billion
- $60 million Foxconn cash contribution provided for land acquisition
- Village retains ownership of land acquired for project until actual development occurs
- Consent to levy of special assessments to recover all debt service costs for additional land acquired
» Successful creation of the Tax Incremental District – the largest in the history of Wisconsin, encompassing 6.5 sq. miles
» Development & successful execution of all initial phases of the financing plan