How Microsoft's purchase of 1,000 acres in Mount Pleasant could lead to a decade of construction
Construction of Microsoft's massive data center in Mount Pleasant could go on without interruption for more than a decade.
That's according to the agreement for the company's purchase of more than 1,000 acres of land, much of which was previously controlled by Foxconn.
AJ Steinbrecher, Microsoft's director of North America land acquisition for cloud infrastructure, on Monday spoke about the company's commitment to Mount Pleasant and Wisconsin, but didn't discuss details about Microsoft's plans for construction during a brief presentation to the Mount Pleasant Village Board.
"Earlier this year, we announced our plan to construct new data centers in the village of Mount Pleasant and today we are sharing our intent to invest billions in the development of our cloud infrastructure," he said.
Steinbrecher said the company is still developing its plans for the site.
Microsoft wants to buy 630 acres of village owned land for about $100 million, or $158,000 an acre, and another 400 acres of privately owned farmland for an undisclosed amount. The company has committed to creating a minimum of $1.4 billion in taxable building value by Jan. 1, 2028.
Work has already started on the first of two buildings on a 315-acre parcel that Microsoft acquired in May. The value of those buildings alone is expected to be about $1 billion.
Steinbrecher called that "just a start."
"This expansion beyond what we communicated to you in the spring of '23, is consistent with our development within other communities around the US and the globe," he said.
"Just less than two months after purchasing the property this past spring, we started construction of our first data center here in Mount Pleasant. We expect this work will create both construction jobs and full-time positions in the future, as well as generate billions of dollars in capital investment and related tax revenue."
The amended development agreement calls for Microsoft to begin construction of a second building no later than 2030 and a third building by 2037. The village has the right to buy back the land if Microsoft doesn't meet those deadlines.
Alan Marcuvitz, the lawyer representing the village in its negotiations with Microsoft, said Microsoft's fast start on the first building suggests it will also move quickly to develop the additional land, although he noted he is not privy to specific construction timetables. The original development agreement didn't require Microsoft to begin construction until 2026.
"I think that there's going to be active construction on this site for the next 10 years," he said. "I think it'll be constant throughout that period of time. And I wouldn't be at all surprised if we're going to see the full realization of this program within that period of time."
The village board is expected to consider the land sale and associated development agreements on Nov. 27. The Racine County Board will be briefed on the proposal Tuesday night and consider it Nov. 28. If approved, the land sales are expected to close by the end of the year.
Microsoft's development, if approved, combined with Foxconn's commitment to create $1.4 billion in taxable value or pay the equivalent would make the financing district that was created to fund the business park debt free by 2037, 10 years ahead of schedule, said Todd Taves, the village's financial advisor from Ehlers Inc.
The business park was developed by Mount Pleasant and Racine County as part of a S1.2 billion investment in land and new infrastructure, including a massive state and federal-funded freeway expansion, to lure Foxconn and its promise of 13,000 jobs at a multi-billion LCD manufacturing plant to Wisconsin. The company quickly shifted away from that plan and now employs 1,000 people making servers for data centers and electronic components for rooftop solar arrays.
As of last year, Foxconn's four buildings had added just more than $500 million in new taxable value according to the most recent district financial report. The land sought by Microsoft is located on the north and east sides of the Foxconn development.
More: Here's a short timeline of Foxconn's plans and development in Wisconsin
An amendment to its development agreement would require Foxconn to give up its options to develop the land - something that village officials said the company does not oppose. Foxconn last week reiterated its commitment to its Wisconsin operations.
Some of the proceeds from the land sale will be used to repay the last $10 million of a loan from Foxconn for land purchases when the park was being assembled and to reimburse Foxconn for special assessment it paid for utility services on the land Microsoft will buy. Other funds will be used to settle Mount Pleasant's debts with the county, and $36 million will go into a reserve fund for future business park obligations.
Data Centers are the information-processing backbone of cloud computing and artificial intelligence, and Microsoft and its competitors are racing to build capacity to meet growing demand. Microsoft operates more than 200 data centers in 34 countries.
This article originally appeared on Milwaukee Journal Sentinel: Microsoft purchase of Foxconn land could stir 10 years of construction
