Microsoft plans to buy a $50 million plot of land in Racine County, Wisconsin to build a more than $1 billion data center.
The 315-acre parcel had been slated for use by electronics manufacturer Foxconn, which operates a data server and motherboard manufacturing plant in the Village of Mount Pleasant, where the land up for sale is also located.
The deal will close no later than July 31, according to a county board meeting presentation given on Tuesday.
Microsoft plans to begin the first phase of construction by July 1, 2026, with a second phase to start by July 1, 2033. Its investment plans are “part of Microsoft’s long-term commitment to the local communities in Wisconsin,” a company spokesperson said in a statement to Manufacturing Dive.
Foxconn will reap the proceeds of the Microsoft land sale as a partial reimbursement for the $60 million it advanced for Racine County's purchase of the land in 2017, according to a fact sheet from the Village of Mount Pleasant.
In a statement to Manufacturing Dive, the company called its presence in the Wisconn Valley Science and Technology Park, where its factory is located, a “key strategic asset, allowing the company to respond to market demand.”
“The collaboration with Microsoft and local government demonstrates Foxconn’s partnership with others to further the goals and intentions of creating a science and technology hub within the Park,” the company said in its emailed statement.
The deal will “free up” Foxconn’s land rights to the acreage, according to a presentation given by Deborah Tomczyk, a shareholder in Reinhart Boerner Van Deuren’s real estate practice and an attorney for the county, to the Racine County Board on Tuesday. Foxconn has also been “cooperative” in attracting other users to the site, Tomczyk added.
"With this site, with the obligations, the investments that we've incurred together, give us a position to attract companies such as Microsoft," Tomcyzk told the Board on Tuesday. "And we've heard successes before, interest before, we hope there will be more to come.
The impending sale is one of multiple deals Foxconn is in the midst of making regarding its land in Mount Pleasant. Earlier this week, the Village of Mount Pleasant reviewed a potential agreement for We Energies to sign a 25-year lease for a piece of Foxconn's land to install 2,000 solar panels.
Foxconn's ongoing saga in Wisconsin exemplifies what can happen when mega manufacturing investment pledges sit stagnant.
The electronics manufacturer came to the state with a bold promise of a $10 billion investment and the creation of 13,000 jobs. Since opening, media reports have said much of the facility lacks work to do, and in 2021 Foxconn negotiated its deal down to a $672 million investment and 1,454 jobs.
Foxconn owns approximately 877 acres of land in its parcel in the Village of Mount Pleasant, including its current manufacturing facility.
The land is currently valued at over $550 million, falling short of the $1.4 billion assessment guarantee that the company has for the land, according to Tomczyk's presentation.
As of January 1, Foxconn is still obligated to pay property taxes or makeup payments for the full value of the land, which will be due in 2024.