by Lawrence Tabak
An Apple a Day
Apple Holler is an 80-acre pick-your-own orchard destination just off of Interstate 94 in Sturtevant, Wisconsin, about midpoint on the main highway connecting Milwaukee and Chicago’s northern suburbs. Although just a short drive from Racine and Kenosha (populations 77,000 and 100,000), most of the fall visitors are day trippers from the Chicago area, excited to get fresh Wisconsin apples.
On weekdays in the fall school buses line the gravel driveway as long lines of six- and seven-year-olds queue up to reboard, clutching plastic bags laden with fresh apples. Semi-scary Halloween scarecrows are seated at benches and propped up as driver and passenger in an abandoned old red pickup. White picket fences and rows of pumpkins help enforce the image of an idealized farm. Paying customers can visit the petting zoo. Next to the entrance of the main building, a reconditioned red barn housing a restaurant and bakery, is a sign which reads: “Feel free to breathe deeply. The trees in this orchard are absorbing carbon dioxide laden air and sending out fresh oxygenated air.”
Directly across the highway will be Apple Holler’s recently announced new neighbor — Foxconn’s huge $10 billion plant in neighboring Mt. Pleasant. The factory, which will be built with the aid of $3 billion in state funds and a local $764 million Tax Increment Financing deal, will produce flat-panel LCD screens.
The first person I speak to at Apple Holler is a conscientious temporary employee in her 50s, Sandy McGee, who commutes 20 minutes from her home in Winthrop Harbor, Illinois. She’s manning the gate to the petting zoo and orchard, checking tickets. She also holds down a part-time job at Wrigley Stadium, a two-hour commute, and a third job for the city of Evanston, an hour from her home. Due to a missed deadline she’s lost her ACA healthcare and is currently without while her appeal is being processed. She’s been avidly following the news of Foxconn, in the hope that the Taiwanese tech manufacturing giant might offer her more gainful employment.
“I read about $54,000 jobs at Foxconn with benefits,” says McGee. “I’d jump at that compared to working three jobs.”
“This is going to be miserable for Apple Holler. It’s going to do nothing for people like me.”
Unfortunately for McGee, the $54,000 figure cited in Wisconsin’s Foxconn deal is just an average salary, taking into account the competitive salaries paid to executives, highly skilled engineers, and managers. As Belt magazine reported in September, Foxconn’s history of operating in the U.S. — at factories in Plainfield, Indiana, and Houston, Texas — shows that the Taiwanese corporation favors H-1B visa holders from Asia for such positions, and temp workers who will accept minimum wage and no benefits for the assembly-line jobs. Perhaps there could be an office job for a worker like McGee, but it’s a bit of a long shot.
A second Apple Holler worker joins our conversation from her station behind the counter where you buy your tickets and apple-gathering bags. Gail Knapp has been working at Apple Holler for nine years and lives in the Racine area. Her take on the Foxconn development is one I’ll hear over and over.
“We all hate it, the neighbors around here especially. All the local two-lane roads are going to be expanded to four lanes. Taxes are going to go up and there’ll be no benefits for us for at least 20 years,” says Knapp. “And in 20 years the technology could be so different. In 20 years they could be gone. In the meantime, they’re not going to be hiring locals. They can’t even get enough people to staff Amazon.”
The mention of Amazon points to another Wisconsin issue, in which employers are finding it challenging to fill low-wage jobs. The nearby Amazon distribution center, opened in 2015, is currently advertising multiple positions paying $12.25 to 13.25 an hour. For many struggling Wisconsinites, a low-wage job would mean the loss of government benefits, leaving them in a worse financial situation, not a better one.
But Knapp also believes that, even if they could, Foxconn doesn’t intend to hire locals. With an expression of the proud possessor of inside information she lowers her voice and says that her two sons work construction and that their company is currently bidding on an excavation project. “They’re putting in a housing complex, an entire village, for the Chinese.” Meanwhile, she says, a neighbor down the road just a short distance outside of the Foxconn industrial quadrant has been approached to sell land for a condo project. If Foxconn’s past behavior is any indication, the additional housing is presumably for mid-career engineers from Asia who demand less than the average starting salary available to a fresh University of Wisconsin engineering graduate.
“This is going to be miserable for Apple Holler,” Knapp says. “It’s going to do nothing for people like me.”
Apple Holler’s owner, Dave Flannery, has been running the operation for 30 years and it’s clearly a labor of love. He approaches me with one hand for a shake, the other with a glass of freshly squeezed cider. Like most farmers in Wisconsin, he’s old enough to be a grandfather and has the weathered look of someone who’s spent a lot of his days outdoors.
One of the first things he says to me is that the Foxconn project has been like “watching a locomotive coming down the tracks. It’s all happened so fast. It was just two weeks ago that we found out where the plant was going.”
You can sense the tension between Flannery’s political allegiances and the possible damage that his elected officials have wrought. “I’m pro-business,” he says. “In the long term this should be good for Wisconsin and Northern Illinois. Of course there will be growing pains with the construction and such. But more people, more jobs, that has to be good for us.”
“I’ve got a neighbor. He’s going to be forced to sell his land. He’s third generation.”
When I ask Flannery if he thinks people will still drive in from Chicago for the rustic experience of visiting a Wisconsin farm when that farm is in the shadow of a giant industrial complex he looks stricken, as if this is the first time he’s been forced to picture this future.
“That’s a good question,” he says. “A very good question.”
I take a drink of the still foamy cider. Flannery asks if I like it. If it isn’t too bitter. It’s as sweet as a soft drink, as smooth as a shake. I assure him it’s delicious and he breaks into a proud smile.
“I’ve got a neighbor,” he says, pointing in the direction of the Foxconn project. “He’s going to be forced to sell his land. He’s third generation. That’s the downside. For him it’s so much more than the dollars. For me as well. I’d have no interest in selling this place. I enjoy what I’m doing. I love going out for hikes in my orchard with my dog, in the spring with the blossoms, checking the apples in the summer….”
I ask if he is worried about the environmental impact of having an industrial plant so close. “I’m sure the state agencies have done their due diligence.”
Later that day, a half peck of Apple Holler apples in my trunk, I take a call from Ron Doetch, the founder of Solutions In The Land, an agricultural environmental impact consultancy firm based in Prospect Grove, Illinois. He knows the Racine area well, having worked for years in Wisconsin as head of the non-profit Michael Fields Agricultural Institute, an organization dedicated to sustainable farming practices. I mention my visit to the orchard and the possible impact on Dave Flannery’s operation, which includes its own onsite wells to irrigate the apples.
“It isn’t an issue of whether the Foxconn operation will affect Apple Holler, it’s a question of when,” says Doetch. “Once they begin production, they will be releasing heavy metals into the watershed. What a lot of people don’t understand is why this project needs so much water.” Estimates place Foxconn’s usage at approximately equal to the entire city of Racine’s current daily pull from Lake Michigan. “It’s not so much to wash the glass, but to dilute the heavy metal pollutants down to the currently acceptable parts per million level.” This does nothing to mitigate the pollutants’ effects.
“Apple Holler will begin to pump heavy metal onto their land within months of the plant’s operation,” Doetch continues. “The first thing they will see is plant health issues. The heavy metals discharged by the plant will leach into the groundwater, Apple Holler will pump the water onto their land, and the farm’s soil will filter them out. The second stage will be a loss of production as the trees suffer. The third stage will be health issues associated with consuming the apples themselves.”
What will become of Apple Holler? Doetch thinks it will be a fate similar to other bordering lands. “He’ll have to sell the land for low-income housing. It will be the only suitable use for it. The way this works is that Foxconn will attract minimum-wage workers, probably a lot of them undocumented, and these workers will eventually pull their families along. These families are not going to be able to afford Racine housing — and demand will bring in the kind of housing they need.”
“The saddest part of this for me is the inability for state leadership to see the future of Wisconsin agriculture.”
Instead of a booming population of middle-class manufacturing workers, Doetch sees a horde of underpaid Foxconn assemblers who will be subsidized by the state by qualifying for government housing and food programs — an additional form of corporate welfare for Foxconn.
“The saddest part of this for me is the inability for state leadership to see the future of Wisconsin agriculture,” continues Doetch. “Wisconsin is widely, and correctly, seen as a source of untainted soil and water. While California is currently the leader in producing organic produce, no one really thinks that the Central Valley and its water sources are unadulterated. Wisconsin is poised to become the national leader in organic production, a hugely profitable and sustainable business, and yet they pick Foxconn as the future of the state. Within a short period of time the Foxconn plant will make at least 5,000 acres of Wisconsin farmland unusable, to say nothing of the damage to the state’s reputation. And these aren’t just acres of cash crops. This is a part of the state that produces a high volume of high quality produce — broccoli, cauliflower, lettuce —that goes directly and efficiently to Milwaukee and Chicago.”
What is Doetch’s prediction for Racine County in a decade or so? “People will be asking, ‘How did we let this happen?’”
Your Land Is My Land
In early October, shortly after Mt. Pleasant was announced as the site of the Wisconsin Foxconn plant, dozens of area homeowners receive a letter from the Village of Mt. Pleasant notifying them that their homes would be acquired by the municipality under Wisconsin’s eminent domain statute. The statute allows for the confiscation of private property at “fair market value” in the interest of the public good. The area affected is much larger than any single industrial complex’s footprint — 2,893 acres, or 4.5 square miles. For comparison, this is the equivalent of seven New York Central Parks, an expanse significantly larger than the entire city of Racine. From the ground you can see only small parcels of the land at a time — flat, rich farmland with the occasional single family home along the main roads. By way of comparison, Foxconn’s current LCD manufacturing facility in Sakai, Japan, a sprawling industrial complex, sits on 340 acres outside of Osaka, and has room for further industrial development. The Wisconsin site is almost nine times larger.On October 11, some 100 affected people, many of them senior citizens, gather in Mt. Pleasant’s municipal hall to learn more about their fate. The session is conducted by Madison-based Peter Miesbauer, heir to G.J. Miesbauer & Associates, “right of way acquisition specialists.” One of a growing list of contractors brought in by Mt. Pleasant to work the Foxconn deal, Miesbauer patiently listens to the often quite specific questions and answers in repeated generalities, restating the statutory definitions of property acquisition and the statutory requirement that the buyouts will represent “fair market value.”
With eminent domain letters in hand, but no indication of tendered offers, the sense of frustration in the room is palpable.
A woman who appears to be in her 60s says that she’s in the midst of a major remodeling project. “Should I have them finish? Will my buyout reflect the improvements?”
Miesbauer explains that he can’t comment directly on any valuation issues. That would be the job of the assessors Mt. Pleasant would be hiring.
A young woman complains that her family has yet to celebrate a Christmas in their new dream home. All Miesbauer can do is assure her, once again, that she will received a “fair market buyout.”
Others ask about being compensated for the turmoil this is clearly going to cause. Miesbauer is specific on this — there is no clause in state law to compensate for “pain and suffering.” Everyone wants to know the timetable, how long they have before eviction. With the final contract between the state of Wisconsin and Foxconn still unsigned, Miesbauer has precious little to satisfy these questions, other than to note that construction is expected to begin in the spring.
“They’re taking my home, where I’ve lived for 24 years.”
Joy Day-Mueller owns a five-acre homestead on Braun Road, a two-lane rural path that bisects the overall Foxconn land deal. A mile further down is a large produce stand that her husband once ran, cultivating a wide range of vegetables on the adjacent land. As the road continues west, towards Interstate 94, it forms the north side of the 1,198-acre phase one area of Foxconn’s project. The highway is slated for expansion to at least four lanes to accommodate the anticipated traffic boom — part of the $177 million local government commitment for Foxconn roads, water, sewer, and internet fiber. Day-Mueller’s house is outside of the main proposed industrial area on the northern border of a 622-acre plot designated as construction staging. She had hoped that being on the edge of this part of the development would spare her from the eminent domain acquisition. She was shocked to receive the mailed notification and when we talked after the public meeting was clearly still in a state of disbelief. While the official offer awaits the work of Mt. Pleasant hired assessors, a recent tax assessment of her property came in at $275,523. With nearby properties recently selling for 20-40% above the tax assessment level, this puts a likely fair market offer in the $340-380k range.
“They’re taking my home, where I’ve lived for 24 years,” she says, as if repeating this statement might somehow soften its blow. “We’ve got a pond, and a utility barn for my husband’s business. It’s all I’ve been able to think about for a week. I’m not sleeping well. This whole deal is such a bad idea. I don’t see how anyone can support this.”
The next day, we walk from the driveway leading to her ranch home across a carefully landscaped yard to the pond, a couple of hundred feet across and rock-lined. A small pontoon boat is upended next to a sandy stretch with a sign that declares “Joy’s Beach.”
“We did all this work ourselves,” she says, gesturing across the pond and the yard behind us. “Everything but the original pond excavation. How are they going to pay us for all that?”
Back in front of her home I ask if she’ll stay in the area. “I want to get as far away from this as possible.” I sense she means both the Foxconn development and the local officials who penned the eminent domain notification. “But my husband’s snowplowing contracts are all in the area, in Racine.” She shakes her head. “I guess we’ll be hiring our own assessor and begin the battle to get what we can.”
The next night I queue up with local residents in the marble-floored entranceway of the main room of Racine City Hall, built in 1924 in the standard-to-the-time neoclassical style. Carved into stone above the doorway in two-foot letters is Virgil’s proclamation that “The Noblest Motive Is the Public Good.” Inside are booths highlighting the various components of Foxconn and the local project, set up and manned by staff from Mueller Communications, a Milwaukee-based PR firm, another of the many contractors already engaged by the Village of Mt. Pleasant, all to be paid via the village and county’s massive Tax Increment Financing project.
I speak to one of the large landowners in the area who had already been contacted by Milwaukee-based real estate firm Pitts & Brothers with a hard-sale offer to sign a purchase option at $50,000 an acre for his 40-acre lot. The price per acre is several times the going rate for agricultural land in the area, a multiple that homeowners on smaller lots will not be receiving via eminent domain. Nevertheless, the landowner, who preferred to remain unnamed, believes his land is worth twice as much, and has several objections to the offer: he says it undervalues his property, it doesn’t include several acres of road front, and includes a 5% commission taken from his end, which would mean paying Pitts close to $100,000 for the hour or so they devoted to explaining the offer. (A principal of the Pitts firm, Michael Pitts, is an enthusiastic Republican donor, so much so that he was cited for exceeding the legal contribution limit to the Republican candidate for Wisconsin governor in 2003.) The landowner rejected the Pitts offer and made a counteroffer to the village, but has yet to hear anything back.
All Politics Are Local
Gov. Scott Walker has promised that the Foxconn development will benefit all Wisconsinites. What is certainly true is how the benefits are already reaching north, deep into Milwaukee, where most of the first round of contractors are based. For instance, should Pitts & Brothers get contracts on most of the farmland, they will be seeing a windfall of some $5,000,000 in commissions. Keep in mind that the basic source of the money to purchase land and pay contractors is the village and county’s bond issuance, which will raise money now on the promise of payback in future property tax levies on the Foxconn complex. It’s public funding. For the 30-year life of the Tax Increment Financing (TIF) deal, all property tax revenue in excess of current collections will flow not to the municipalities, but to the TIF, producing a multi-million-dollar discretionary fund under the direction of Mt. Pleasant and Racine County. In order to float such a massive fund, the Foxconn TIF had to receive special legislative authorization, since state law had previously limited TIF funding to 12% of the assessed value of the municipality, a figure which would have limited the Foxconn TIF to about half of its announced value.
Mt. Pleasant, population 26,000, has already committed $20,000 a month for a project manager from the Milwaukee construction outfit, Kapur & Associates. The firm’s founder, Ramesh Kapur, gave the maximum personal contribution of $10,000 to Gov. Walker in 2010; other Kapur associates kicked in at least $6,000.
Kapur’s project manager will present a list of contractors for approval to the Mt. Pleasant Board of Supervisors, which is headed by Village President Dave DeGroot, self-identified with the Tea Party and politically aligned with the Walker camp. Despite DeGroot’s campaign slogan of transparency, he has become known for announcing or changing public meeting times at the last minute, conducting major business such as the Foxconn deal and the hiring of the project manager behind closed doors, and championing one of the largest local government-sponsored business initiatives in American history, the $764 million Foxconn TIF deal. It’s certainly the largest on a per capita basis, with a debt of $3,800 for each person in Racine County, with the 26,000 residents of Mt. Pleasant at particular risk.
Beyond Mt. Pleasant, DeGroot is probably best known for publicly silencing and admonishing local progressive activist Kelly Gallaher at a Village meeting regarding Foxconn in late August. When Gallaher attempted to speak during the public comment portion of the meeting, DeGroot took the microphone and reprimanded Gallaher for using “the F-bomb” in the chamber at a previous meeting, a claim Gallaher adamantly denied.
“Having said that, you will not be speaking in these chambers again until I have heard an oral apology that’s suitable to me and the rest of this board,” DeGroot said to Gallaher at the meeting, before adding, “I’m not going to hear an oral apology from you until I read a written one that has been delivered to me five business days before this board meets so I can check the credibility of it because you have had a long history of issues with the truth. Go back and sit down.”
“A $760 million dollar commitment is much larger than anything we’ve ever dreamed of locally. Instead of being discussed openly what we’re seeing is a scrum for everybody to get paid first.”
In board meetings, DeGroot has continued to use his power and influence to limit public debate and has shown a willingness to accommodate contractors with Walker ties in the early rounds of hiring.
As for Gallaher, she tells Belt: “It’s not so much that I’m for or against Foxconn. It’s about doing this right. We have an obligation, a responsibility to the people who will be paying for this long after we’re gone. And the first thing that is required is transparency.
“Up until the announcements last week, all the Mt. Pleasant meetings have been in closed sessions. We have not been privy to anything at all. A $760 million dollar commitment is much larger than anything we’ve ever dreamed of locally. Instead of being discussed openly what we’re seeing is a scrum for everybody to get paid first.”
Down the Road
Charles Heide’s grandfather came to southeastern Wisconsin for the same reason thousands of others did in the 1920s — auto manufacturing. He worked his way up from the assembly line to become supervisor of production at the Nash plant in Kenosha. This success gave him the wherewithal to purchase a small tract of land out in the country between Racine and Kenosha where he built a house and operated what his grandson describes as a “gentleman farm.”
As the area grew and as the cities spread Charles’s mother began to encourage the purchasing of surrounding land to control development around the family home. Eventually this grew to include some 380 acres, much along the Pike River — a waterway with headwaters in the Foxconn tract and a destination into Lake Michigan on the north side of Kenosha. The various tracts were acquired as opportunity arose with the assumption that the next generation would create a master plan for the land. After a successful career in manufacturing Heide is well into his second career as steward of the family land. To this end he’s been working on preserving native prairie remnants and establishing a sustainable agricultural model that breaks away from the industrialized conventions of the Midwest.
“We are at a critical stage where we still have the leverage to demand that Foxconn takes absolute responsibility for not polluting our waterways or aquifers.”
He drove the 15 minutes from his place to the Mt. Pleasant city offices for the public meeting on October 11 and left deflated. He had hoped to discover important details about the Foxconn development in terms of their production projections, water use and treatment, and development timeframe. Instead he saw only the same broad outlines that had already been released: graphics illustrating the map of the Foxconn acquisition and the broad-stroke explanations of its financing.
“I come from a manufacturing background and am pro business,” Heide says. “Everyone wants to see good jobs and development which promotes community stability. We are at a critical stage where we still have the leverage to demand that Foxconn takes absolute responsibility for not polluting our waterways or aquifers, either by intent or neglect. It’s well known that LCD manufacturing produces highly dangerous heavy metal byproducts, yet I have yet to see the subject even addressed. I’m directly downstream and want assurances that our groundwater and the hundreds of private wells in this area will not be compromised by construction runoff, heavy metal pollution or other byproducts of whatever Foxconn produces.”
If Heide had hoped the public meeting on October 11th would be a forum to ask such questions, he was disappointed in this as well. There was no presentation or question and answer period. No senior Foxconn people were in attendance and the local and state officials have shown little knowledge, or even interest, in the technical aspects of the factories they are greeting with open arms. In fact, there has been no effort to provide even lip service to the concept of local input — the entire project has been completed behind closed doors from the state to the Village of Mt. Pleasant level and presented as a fait accompli.
“I just think the whole process has been short-circuited by its massive scale and millions of dollars at stake,” says Heide. “If we had directed Foxconn or other industry development onto the land abandoned by the auto or other industries, then I’d be celebrating the deal. Instead it appears that we’re giving Foxconn cheap farmland and free water and I’m guessing they couldn’t be more delighted.”
* * *
Over the course of my reporting in Racine County, more than one resident used the metaphor of a train barreling down on them, and a few suggested that a related term, “railroaded,” might be appropriate as well. When the Wisconsin Foxconn project was announced it was a White House event, with Donald Trump, Paul Ryan, Scott Walker, and Foxconn Chairman Terry Gou all celebrating the signed agreement. The unstoppable forces were already arrayed and those with questions, objections, or fact-based concerns were simply ignored. What’s most troubling is the refusal by government officials to consider the modus operandi of a 30-year partner that will cost Wisconsin taxpayers some $3 billion.
As Mark Fralick, a Texas-based industry expert on automated production and a contributing editor to the most prominent U.S. trade magazine in Foxconn’s industry, Supply Chain Digest, told us: “Foxconn has a long history of overpromising and underdelivering. I get the feeling that Wisconsin officials are suffering from ‘shiny object syndrome.’ I just hope the government entities and municipalities involved don’t get screwed.”
Lawrence Tabak is a writer based in Madison, Wis. His work has appeared in Fast Company, Forbes, and The Atlantic Monthly, which published his exposé on the false assumptions behind convention center construction. He can be reached at: email@example.com.
For more of Belt Magazine’s Foxconn series, read “Why Foxconn’s Wisconsin Promise of 13,000 Jobs Is an Empty One” and “How Gov. Scott Walker Got Taken in the Foxconn Deal”