Microsoft Corp. plans to develop a $1 billion data center campus in Mount Pleasant, Wisconsin, a village near the Illinois border. The internet giant will pay $50 million for a slice of land left empty for years after a high-tech factory meant to transform the region’s economy was not built.
Taiwan-based Foxconn Technology Group forged an agreement in 2017 with former Gov. Scott Walker to manufacture LCD screens in Mount Pleasant, investing $10 billion and employing 13,000, in return for billions in subsidies. But the company, a top manufacturer of Apple’s iPhones, downsized its plans and created few jobs, forcing government officials to find other users.
Data centers process and store huge volumes of computer data, forming the backbone of the internet. Although these facilities typically don’t create large numbers of permanent jobs, local leaders and tech experts say Microsoft’s arrival signals the Foxconn land, along with infrastructure improvements already complete, won’t go to waste.
“It’s an unexpected bonus for citizens in southeast Wisconsin who may have felt the Foxconn deal never materialized as advertised,” said Tom Still, president of the Wisconsin Technology Council. “It also has the potential to bring more business into the Upper Midwest, including Illinois, from companies that may not recognize what kind of talent we have here, especially in the tech industry.”
Microsoft will take over 315 acres of the 2,500 acres initially set aside for Foxconn. Village and county officials approved the agreement in April and say the purchase will close by July 31.
“Microsoft was attracted to this location because it is primed for development,” village of Mount Pleasant President David DeGroot said in a statement. “Through local investments, we have transformed this area of Mount Pleasant and equipped it with the infrastructure necessary to support a major investment by Microsoft.”
Attracting companies with subsidies and incentives can be risky, and Foxconn’s proposal had a lot of red flags, according to Cailin Slattery, an economist with the University of California, Berkeley’s Haas School of Business.
“There are not a lot of Foxconn fans left out there,” she said. “There was a total lack of transparency, and it was definitely more politicized than the standard deal.”
Walker touted the Foxconn agreement during his reelection campaign, and President Donald Trump attended the 2018 groundbreaking, saying the Foxconn plant would be the “eighth wonder of the world.”
Residents on the land promised to Foxconn were displaced from their homes, but the company, blaming “unanticipated market fluctuations,” canceled the mega-factory. In 2021, it signed a new deal with Gov. Tony Evers, who beat Walker after criticizing the original agreement. Instead of up to $3 billion in subsidies, Foxconn agreed to collect $80 million for creating 1,454 jobs and investing $676 million in a set of smaller facilities by 2026.
Microsoft’s agreement with Mount Pleasant and Racine County requires it to launch construction by 2026. The company can recover 42% of its property taxes, but no more than $5 million per year. The local governments can also repurchase the land at the same price if Microsoft fails to hit the deadline.
Racine County Board Supervisor Marlo Harmon said she was the only board member to vote against the deal, and remains skeptical, mostly because when it comes to job creation, a data center is a poor substitute for a factory.
“Any business coming into the county, especially a business as successful as Microsoft, is a good thing,” she said. “I’m only in disagreement with Microsoft coming because it’s not going to produce the jobs we need for the county.”
Still said he estimates a data center on this scale could employ fewer than 100 people.
But Robert Smietana, CEO of Chicago-based developer HSA Commercial Real Estate, said the infrastructure improvements made by both state and local governments in anticipation of Foxconn, including widened roads, new electrical lines and water pipes, has already accelerated the construction boom underway along I-94 just over the Wisconsin-Illinois border.
“That market has grown tremendously over the years,” he said. “And last year, there was about 7 million square feet of new development, with about 5 million almost immediately leased.”
Companies such as Uline, Amazon, XPO Logistics, Ryder Logistics and Haribo of America, Inc., the maker of gummy bears, have recently established manufacturing and distribution facilities in southeast Wisconsin, he added, shipping goods across the U.S., especially throughout Chicagoland.
“People now want to have their finished goods close to their customers.”
