Booming border economy gearing up for big changes
Communities near the Foxconn plant are gearing up for big changes in the coming years as the area prepares for a massive influx of people and development dollars.
Even before Foxconn, Kenosha and Racine counties -- part of the I-94 corridor connecting Wisconsin to Chicago to the south -- have seen an upswell in the number of development projects in recent years.
In Kenosha County, recent high-profile developments have been announced by companies such as Uline, Kenall, Haribo and Amazon. In fact, economic development efforts in Kenosha County have resulted in 11 million square feet of development and $1.4 million in capital investment since 2013, according to the Kenosha Area Business Alliance.
For Racine County, recent developments include Fischer USA, Grand Appliance, Insinkerator and of course, Foxconn, which has promised 13,000 jobs and $10 billion in capital investment at its Mount Pleasant site. The formal groundbreaking for the Foxconn campus is expected to be held later this month, and President Trump reportedly plans to make an appearance.
Both counties have had steadily declining unemployment since early 2010, according to data from the federal Bureau of Labor Statistics. Racine County went from 12 percent unemployment in 2010 to 3.2 percent in April of this year, while Kenosha County went from 12.1 percent to 3 percent.
Smaller communities in the area are taking steps to ensure development continues or accelerates in the Foxconn era. That’s according to Grace Parrish, president of the Southshore Realtors Association.
She says the Village of Caledonia recently adopted a land use study for the I-94 corridor, and is working to update its land use plan. In Somers, the planning commission recently approved a new land use plan for the corridor. And in Pleasant Prairie, a new subdivision is under construction and a large new apartment complex was recently approved.
“The mayor of Racine has noted there are multiple waterfront development opportunities in the city, and has indicated his support for streamlining the development approval process,” Parrish told WisBusiness.com.
Several other major non-residential development projects are happening in the region: Aurora Health Care recently announced plans for a $250 million medical center in Mount Pleasant, while Pleasant Prairie has approved site plans for a $130 million Aurora Health Care medical center, with construction set to begin this summer. Also, Froedtert South is planning a new medical facility in Pleasant Prairie, Parrish said.
“Together, all of these projects represent a huge vote of confidence in the future of Racine and Kenosha counties,” she said.
John Koskinen, chief economist for the state Department of Revenue, says city governments for New Berlin and Muskego are being approached by housing developers with plans for the workers to come.
According to Koskinen’s data from April of this year, Kenosha County has a labor force of 90,202, and Racine County has a labor force of 99,441. Together, that’s 189,643 workers.
But, as Koskinen points out, “We shouldn’t think of the labor markets of Kenosha and Racine counties as having these fixed boundaries… The geographical boundaries of the counties are not how people will respond.”
“Whenever you put in these big plants somewhere, there’s a supply response that labor moves to it,” he said. “If the jobs are there, the people will follow.”
He draws a 30-mile radius around the development to give an idea of where the labor market for Foxconn might be.
“It’s not just those two counties -- it’s Walworth, Waukesha, Milwaukee counties,” he said.
He says Waukesha County has a labor force of 227,651; Milwaukee County has 479,346; Walworth County has 58,703. And just across the border in Illinois, Lake County has 377,444; and McHenry County has 163,974.
All of these counties touch the 30-mile bubble around Foxconn. That means the total labor force within a reasonably drivable distance is nearly 1.5 million people -- and more may come from further away.
As plans surrounding Foxconn advance, many organizations and agencies are focused on maximizing the project’s positive impact. Amy Greil, community development educator for UW-Extension in Kenosha County, says “everybody is cramming into this space trying to find a lane.”
“There’s environmental, workforce, DOT, Public Service Commission… How do we make sure information is being shared?” Greil said. “We have to work on process as people learn to work together across these silos.”
She says some of her Kenosha-based educational projects are now being spread across Racine and Kenosha counties, and UW-Extension plans to hire another coordinator, pending approval.
“Intergovernmental agreements, collaborations, really working across jurisdictions is inevitable,” she said. “We have to be thinking regionally.”
Looking ahead, Parrish says “infrastructure will be key to facilitating future development.”
Under the Kenosha-Somers-Paris intergovernmental agreement approved last year, Kenosha will provide municipal water and sanitary sewer service to facilitate growth in the I-94 corridor. The city agreed to extend sewer service to the entire Village of Somers, as well as to properties located in what is currently the eastern part of the Town of Paris.
Parrish says extending sewer and water lines to I-94 in Racine County is necessary for the project, and “will probably also facilitate residential development.”
The Racine County Board and the village boards for Caledonia and Mount Pleasant have approved a memorandum of understanding regarding extension of water and sanitary sewer infrastructure to real estate development in the western parts of both respective villages, Parrish said.
With all these coming developments and infrastructure upgrades, some have voiced worries about potential impacts on the environment and other negative effects.
John Imes, executive director of the Wisconsin Environmental Initiative, says “the concern would be if we take the same old, low-road approach to economic growth that diminishes the environment, hurts workers and our communities.”
“The same, old tired business model exploits workers and disregards environmental standards,” he said, pointing to low wages and a lack of education and training opportunities.
To avoid these pitfalls, Imes says stakeholders should push for development that “achieves superior environmental performance” with sustainable design, water technology and other green infrastructure.
He also stressed the importance of walkable communities and greater transportation assets for those in the region. He says the state should establish a regional transit authority in Racine and Kenosha and a Bus Rapid Transit system from Milwaukee to ensure that Foxconn jobs are accessible to low-income households in the area.
But the Department of Revenue’s Koskinen says all the area communities should have enough time to prepare for the Foxconn impacts.
“The ramp-up time is probably five to 10 years,” he said, calling that “a reasonable lead time” to pull it together.
Though both Racine and Kenosha counties have seen many new development projects in recent years, Koskinen notes that “Kenosha has the advantage.”
“Its labor force is growing tremendously,” he said, noting the sharp contrast between employment opportunities there and in Illinois. “Jobs are there; people are moving there.”
The Racine County Economic Development Corporation has hired a consulting team from Milwaukee’s ManpowerGroup to conduct a study to help communities in Racine County plan for needed housing development.
“We’re moving at high speed, and bringing a lot of good people to the table to evaluate what we’re doing,” said Jenny Trick, executive director of RCEDC.
She says “a number of developers” have been coming into the market for land speculation, and others are directly approaching community leaders to present ideas for single- and multi-family living.
“We’re aware of a few that haven’t gone public,” she said. “We’re hearing bits and pieces in Kenosha… They understand there’s a lack of multi-family housing. Lots of developers are interested in doing that.”
“We have all heard there’s a talent shortfall,” Trick added. “We want to start from a point of facts and data -- what’s the reality of demand and supply in Racine County? There’s no easy way to peel that onion.”
The ManpowerGroup study is expected to be completed by the end of the year, and Trick says it will give organizers a better idea of how to tackle this issue.
“Everyone is asking the same question: how can this all be accomplished?” Trick said. “The analysis is underway; that will inform us on a number of areas.”
--By Alex Moe