A handwritten agreement on Gov. Scott Walker’s official stationary secured the $3 billion Wisconsin taxpayers would give to Taiwanese electronics giant Foxconn in exchange for bringing a $10 billion liquid-crystal display factory and 13,000 jobs to the state.
According to records released to the Wisconsin State Journal by the Walker administration Thursday under the state’s open records law, the handwritten commitment was signed by Walker and Foxconn chairman Terry Gou on July 12, about two weeks before the deal was announced at the White House with President Donald Trump.
Walker and Gou signed a memorandum of understanding on July 27 outlining the deal, which includes $2.85 billion in refundable tax credits, $150 million in sales tax exemptions and exempts the company from some state environmental regulations in an effort to speed up the construction of the campus that would likely be in southeastern Wisconsin.
Assembly lawmakers have approved the package, which will be up for a Senate vote in the coming weeks.
The final deal grew in the two weeks before Walker and Gou signed the July 12 agreement, the records show. A June 26 letter from Mark Hogan, CEO of the Wisconsin Economic Development Corp., who helped negotiate the deal, said the state was offering a package that included giving Foxconn 10 percent of every dollar the company would pay in wages.
Hogan noted in the letter to Foxconn consultant Ernst and Young that the state would consider increasing that percentage for every dollar spent in wages and in their capital investment. The final deal included 17 percent for Foxconn.
That amount represents a portion of the $2.85 billion in incentives. Foxconn will also receive incentives for its capital construction.
It’s unclear, however, what size of total incentive package the state initially offered and the exact terms of the package that were negotiated before settling on the $3 billion because some information is redacted from the June 26 letter and in another June 2 letter from Hogan to Ernst and Young.
Walker spokesman Tom Evenson said releasing the information “would compromise the competitive nature of the project or disclose trade secret information that is protected under state statute.”
Walker’s legal counsel Robert Berry noted in an email to the Wisconsin State Journal that the scope of the Foxconn project initially called for $6 billion in capital investment from Foxconn and about 8,000 jobs.
“As Foxconn continued to engage with the state, the project evolved to the current scope of $10 billion in capital investment and 13,000 jobs,” he said. “No new (request for proposal) was issued by the company, but the negotiations that took place after the scope of the project expanded led to the revisions in the state’s incentive offer.”
The Walker administration’s willingness to help expedite the deal and the construction process may have been key to securing an agreement to build in Wisconsin from Foxconn, the records indicate.
In the June 26 letter, Hogan said Foxconn has identified “Cost, Speed and People as the primary factors that will drive the Company’s decision as to where to locate its new facilities.”
“Governor Walker, WEDC, and our local and regional partners have clearly responded to the Company’s desire to move quickly through the process. We also remain confident the Wisconsin model for addressing workforce requirements will be successfully implemented for the Company,” Hogan wrote. “Cost then becomes the critical factor in the Company’s decision-making process as it attempts to level the playing field with its competitors.”
Hogan also wrote that officials in the Walker administration “are also focused on making investments that provide a (return on investment) to the state’s taxpayers.”