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Foxconn

County to borrow $68 million for Foxconn land purchases

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RACINE COUNTY — Racine County Executive Jonathan Delagrave said when he was elected three years ago, asking to borrow $3 million “would keep me up at night,” and now the county is talking about a $68 million loan.

“The world has changed quite a bit in three years,” Delagrave said to the county Finance and Human Resources Committee on Tuesday.

The county plans to borrow $68 million to help finance the land purchases in Area I and II related to the Foxconn Technology Group project in Mount Pleasant. In December, the county borrowed $79.2 million to help buy the land in Area I.

The committee recommended approval of three resolutions that would allow the county to borrow the money. The proposal to borrow the money is scheduled to go to the full County Board for consideration on May 8.

Delagrave said the county plans to meet with the rating agency Moody’s to discuss the county’s credit rating and he anticipates it will stay at its current rating of AA2.

Dave Anderson, director of PFM Financial, said the “vast majority” of land in Area I — 1,098 acres — has been purchased.

“We need a little bit of this new issue (of bonds) to help finish up the financing in Area I,” Anderson said. “Primarily we’re looking at this one to finance Area II.”

TIF to assist repayment

If the proposal is approved, Anderson said the county would likely borrow $2.6 million to pay the interest payments on the loan.

“You borrow the money to make your first interest payments, that way you don’t have to levy it, it doesn’t have to be included in the budget,” Anderson said. “It’s borrowed and it’s going to be repaid by the (tax incremental finance) revenues or assessment revenues.”

Anderson said the the first payment is scheduled to occur in 2020, with the ability to prepay in 2019.

Over the last several months, Mount Pleasant has been buying land in the Foxconn area and Anderson said the process has been going smoothly.

“They’re acquiring land at a much faster pace than we originally anticipated,” Anderson said. “We’re running out (of money), we need the money.”

Anderson said much of the 1,105 acres that have been acquired in Area II has been paid for with $60 million that Foxconn has contributed to the process.

Delagrave said the cost to the taxpayers will be minimal as the county pays this debt through the tax incremental financing districts that have been established for the project.

“All of this money is paid back through the TIF, this is not any levy dollars or county operational money,” Delagrave said.

“They’re acquiring land at a much faster pace than we originally anticipated ... We’re running out (of money), we need the money.” — Dave Anderson, financial adviser working with Racine County

“They’re acquiring land at a much faster pace than we originally anticipated ... We’re running out (of money), we need the money.”

— Dave Anderson, financial adviser working with Racine County 

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Reporter

Ricardo Torres covers federal, state and Racine County politics along with the Village of Mount Pleasant. He bleeds Wisconsin sports teams.

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