— Racine-area lawmakers on both sides of the aisle say they’re optimistic about the potential for a $1 billion data center Microsoft is proposing for Mount Pleasant.
State and local officials have announced a proposed agreement between Microsoft Corporation, the village of Mount Pleasant and Racine County under which the company would buy a 315-acre parcel of land for about $50 million. The plot is located in the village’s Tax Incremental District No. 5, which was first established in late 2017 and is home to Foxconn in Wisconsin.
In an emailed statement, Assembly Minority Leader Greta Neubauer said Microsoft establishing operations in Racine County could “provide incredible opportunities” and drive economic growth in southeastern Wisconsin.
“As more details are solidified, I look forward to seeing how this project will impact our community,” the Racine Dem said. “I hope all parties can reach an agreement that will bring good jobs and tech manufacturing to our area!”
In a separate statement, Rep. Robert Wittke also touted the potential for the project.
“For the region, Microsoft as the world’s largest software maker by revenue in 2022, could attract more companies to develop here as well,” the Racine Republican said. “I don’t see a downside to having a premiere technology company locating and conducting business in the Foxconn site.”
Under the proposed development agreement, Microsoft plans to spend at least $1 billion to build a “data center campus” on the site with initial construction starting no later than July 1, 2026. The company would be able to earn back some of its investment as it constructs the project, according to a fact sheet from local officials, though payments would be contingent on the village getting sufficient tax increment revenue to have first paid other TID obligations.
The fact sheet shows Microsoft can recoup 42 percent of the annual incremental property taxes it pays on the project, capped at $5 million per year for the duration of the agreement and the district. If the company fails to meet project deadlines, the village and county could repurchase the land being sold to MIcrosoft at the original per-acre price.
Plus, as part of the proposed implementation agreement, Foxconn would receive the proceeds of the land sale as partial reimbursement for what the Taiwanese company spent in 2017 to acquire lands in TID 5.
Village and county boards will consider initial agreements for the project over the coming weeks.
Missy Hughes, secretary and CEO of the Wisconsin Economic Development Corp., said the state agency is looking forward to working with Microsoft to ensure the project’s success.
“Microsoft joins a roster of innovative, world-class companies that are choosing to grow in Wisconsin because of our highly educated workforce, outstanding infrastructure, central location, and unparalleled quality of life,” Hughes said in a statement.
When asked if the state will be providing any incentives or other funding to support the project, a WEDC spokesperson declined to comment.
Meanwhile, former Dem. Rep. Gordon Hintz said it’s “positive that something is occurring there” and the project will likely boost the local tax base. Hintz previously served on the WEDC Board of Directors and was a vocal critic of the Foxconn project in Racine County, which largely failed to live up to its initial promise. He now works for the Wisconsin Laborers’ District Council as the director for the Wisconsin Laborers-Employers Cooperation and Education Trust.
“I think everybody needs to ask themselves what the goal of the project is,” Hintz told WisBusiness.com. “If it’s employment and jobs, which was the original goal of the project, it doesn’t appear that this is going to satisfy that. That being said, to local taxpayers who might feel like they’re going to be on the hook … it should generate tax base.”
In response to a request for more details on the project, a Microsoft spokesperson said the “data center campus investment plans with the Village of Mount Pleasant and Racine County are part of Microsoft’s long-term commitment to the local communities in Wisconsin. We look forward to our work there.”
See more details in a release: https://www.wisbusiness.com/wp-content/uploads/2023/03/Microsoft-News-Release-FINAL-1.pdf
See the fact sheet: https://htv-prod-media.s3.amazonaws.com/files/microsoft-fact-sheet-final-1679964355.pdf
— The head of Venture Investors says restrictions placed on Badger Fund of Funds dollars have limited the program’s impact.
John Neis is the managing director of the Madison-based venture capital fund, which has $275 million in assets under management. He spoke yesterday at a Wisconsin Technology Council event in Madison, which touched on the state’s investment landscape and Gov. Tony Evers’ budget proposal for a new $75 million VC fund of funds.
While the future of that proposal is uncertain amid the ongoing budget process, Neis discussed the state’s earlier $25 million Badger Fund of Funds program, highlighting a “structural issue” with the initiative.
“What they did with what they had I think has been extraordinary,” Neis said, referring to the recipient funds that were backed by the Badger Fund of Funds. “But it’s really small.”
He explained the average first round of VC financing for U.S. companies is around $4.9 million, while the average follow-on round is $20.5 million. That total alone accounts for the entirety of the state’s support for the Badger Fund of Funds.
Plus, he said the restrictions attached to the state dollars “made it very difficult” to see a significant impact. He pointed to a requirement that all of the matching funds for those dollars also had to be invested in Wisconsin companies.
“That’s an economic development constraint,” he said. “Investors can invest anywhere. And if they’re being asked to invest in a fund that has an economic development constraint, they’re going to be concerned that this is going to reduce my return on investment.”
He underlined the social aspect of developing investment networks, noting that in-state investment limitation has made it difficult for recipient funds to build reciprocal relationships.
“If we invite somebody into a great deal here and then they reciprocate and invite us into a great deal that they’ve got, can’t do it if it’s out of state,” he said.
Neis said that issue led to the recipient funds taking longer to raise capital, and “they also weren’t able to raise as much.” He contrasted Wisconsin’s approach to a similar initiative in Michigan that Venture Investors took part in that didn’t include such a restriction.
“By not placing those restrictions on us, we had capacity, we invested as much as $13 million in one company,” he said. “So we were a credible lead investor, we built syndicate relationships with investors from coast to coast, and we were able to attract them into our deals.”
Watch a video of the discussion here: https://wiseye.org/2023/03/28/wisconsin-tech-council-luncheon-venture-capitol-in-the-budget/
See an earlier related story: https://www.wisbusiness.com/2023/new-fund-of-funds-proposal-seen-as-strong-step-in-the-right-direction/
— The Wisconsin Hospital Association is urging state officials to “safely eliminate steps” in the licensure process to help health care professionals get to work faster.
In its latest report on the health care workforce, WHA details a variety of proposals to address the industry’s worsening labor force crisis.
Ann Zenk, the group’s senior vice president of workforce and clinical practice, says it’s unlikely that the health care workforce can grow quickly enough to meet the demands of Wisconsin’s aging population. With that limitation in mind, WHA is calling on the state Department of Safety and Professional Services and credentialing boards to streamline the process for professionals to get licensed.
“State laws, agency rules and licensure requirements must facilitate safe and efficient entry into health care professions and must be modernized to reflect the current practice and capabilities of health care professionals and health care teams,” report authors wrote.
WHA also argues that “allowing all team members to perform at the top of their skill level” is critical for improving capacity.
The association notes the pandemic led to new solutions such as allowing providers licensed outside of Wisconsin to practice in-state before a license was granted. While that was “a good step forward,” according to WHA, the group says more work needs to be done to free up existing workforce resources.
Meanwhile, hospitals and other care providers can leverage existing technology to automate processes that are usually completed by staff, such as remote monitoring, registration and scheduling, the report shows.
“With pervasive workforce shortages, leveraging technology to transform care means improving interventions and outcomes for patients and families and, at the same time, decreasing the amount of time and effort required by clinicians and the teams that support care,” report authors wrote.
The report also notes doctors are spending more and more time on billing, documentation and data reporting, limiting the time they spend providing care. WHA says policymakers, payers and even clinicians need to ensure the “benefit outweighs the additional work required” before adding new regulatory requirements, while also reducing the existing regulatory burden.
See the full report: https://www.wha.org/MediaRoom/DataandPublications/WHAReports/Workforce/2023/Report/WHA-Workforce-Report-2023-web-(1)
See the release: https://www.wisbusiness.com/2023/wisconsin-hospital-association-wisconsins-health-care-workforce-falling-further-behind-demand-for-care/
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