Foxconn Technology Group – which in 2017 pledged to create 13,000 jobs in Wisconsin, including some in Eau Claire, as part of a multibillion-dollar deal with the state – has been back in the headlines in recent weeks, and not in a good way.
On Oct. 12, the Wisconsin Economic Development Corp. told the Taiwanese-based firm that it wouldn’t be eligible for state tax credits if it didn’t revise its original contract with the state, in which the company promised to build a $10 billion facility in exchange for nearly $4 billion in local and state tax incentives. A week later, technology news website The Verge published a lengthy feature examining Foxconn’s relationship with the state, detailing how the electronics maker had fallen far short of investment and employment goals and has built a factory that’s just 5% of the size of the facility it originally envisioned.
Meanwhile, what was supposed to be Foxconn’s “innovation center” in downtown Eau Claire sits vacant two years after the company promised it would create at least 150 high-tech jobs in the Chippewa Valley.
“It’s a little frustrating. it’s a prime spot, and we’d love to see it get used,” Aaron White, the City of Eau Claire’s economic development manager, said of the empty 15,000 square feet in downtown’s Haymarket Landing building.
It would be great if that project went forward again, but from what we’re seeing and reading, it’s unlikely.
ECONOMIC DEVELOPMENT MANAGER, CITY OF EAU CLAIRE
Foxconn’s main Wisconsin campus, which company and state officials promoted as a massive facility to manufacture LCD screens in the Racine County village of Mount Pleasant, has resulted primarily in “empty promises and empty buildings,” wrote Josh Dzieza, The Verge’s investigations editor.
The article begins by noting that the factory-to-be was hailed as the “eighth wonder of the world” by President Donald Trump at its groundbreaking in 2018, but that little has progressed despite Foxconn’s promised $10 billion investment:
“The renovations never arrived,” Dzieza wrote of the company’s Wisconsin headquarters, an aging Milwaukee office building. “Neither did the factory, the tech campus, nor the thousands of jobs. Interviews with 19 employees and dozens of others involved with the project, as well as thousands of pages of public documents, reveal a project that has defaulted on almost every promise. The building Foxconn calls an LCD factory – about 1/20th the size of the original plan – is little more than an empty shell. In September, Foxconn received a permit to change its intended use from manufacturing to storage.
“Even the handful of jobs the company claims to have created are less than real: many of them held by people with nothing to do, hired so the company could reach the number required for it to get tax subsidy payments from Wisconsin. Foxconn failed at that objective, too: last week, Wisconsin rejected the company’s subsidy application and found it had employed only 281 people eligible under the contract at the end of 2019. Many have since been laid off.”
The Verge feature is about 10,000 words long, but it’s definitely worth taking the time to read if you’re interested in the Foxconn deal. While the investigation focuses heavily on the company’s operations (or lack thereof) in Mount Pleasant and Milwaukee, it mentions the statewide “innovation centers” as well, noting that they remain empty. (In April, The Verge published a shorter article, titled “Foxconn’s Buildings in Wisconsin Are Still Empty, One Year Later,” which discusses the Eau Claire property.)
In Eau Claire, the innovation center – also dubbed “Foxconn Place Chippewa Valley” – was supposed to be housed in 15,000 square feet on the first floor of Haymarket Landing, a multipurpose building on South Barstow Street that was one of the anchors of the Confluence Project, a public-private redevelopment effort. In July 2018, Foxconn and state officials, including then-Gov. Scott Walker, announced that Foxconn would be purchasing space in the Haymarket Building as well as buying The Grand, a six-story office building at 204 E. Grand Ave. (The latter deal never materialized; White, the city economic development official, said Foxconn officials told him they never seriously considered buying The Grand.)
“Once again, we’re seeing how Foxconn’s historic investment in Wisconsin is impacting every region of the state as the company makes yet another commitment to both create jobs and support our entrepreneurs and innovators,” Walker said in a press release at the time.
Foxconn indeed invested in Eau Claire, to the tune of $2.7 million: That was the November 2018 purchase price for three condo units in Haymarket Plaza, which are owned by FE Haymarket LLC, which shares an address with Foxconn’s Milwaukee headquarters. The units have a current assessed value of $1.97 million, and Foxconn continues to pay property taxes on them: Last year, taxes on the units amounted to about $43,000.
However, the units remain empty. The largest of them has a wall of windows that look out on Haymarket Plaza and the nearby Pablo Center at the Confluence, the city’s arts center. A peek through the glass on a recent morning revealed a dusty, unfinished expanse of concrete.
But while state and local governments in Wisconsin have reportedly spent an estimated $400 million on the Foxconn deal – mostly on land and infrastructure – no incentives or subsidies have come from local governments in the Chippewa Valley, White emphasized. He recalled that during the early months of 2019, he and then-City Manager Dale Peters met with three Foxconn representatives. At that time, the firm still said it was moving ahead with the innovation centers. In fact, the company received a city permit to make $2 million worth of heating, ventilation, and air conditioning upgrades to its units in Haymarket Plaza. However, little of the work was ever done.
The situation is emblematic of Foxconn’s actions statewide. “It’s gone quiet,” White said of communication between the city and Foxconn. “We’ve reached out to those three gentlemen, and none of them are with Foxconn anymore.” He continued: “Honestly, from our standpoint, we haven’t pursued it very hard, because we didn’t give them any incentives.”
White acknowledged that seeing the Foxconn-owned property remain vacant is disappointing, in part because the location is prime real estate. “It would be great if that project went forward again,” he said. “but from what we’re seeing and reading, it’s unlikely.”