The Supreme Court cleared the way Friday for the Trump administration to tap billions of dollars in Pentagon funds to build sections of a border wall with Mexico.
The court’s five conservative justices gave the administration the green light to begin work on four contracts it has awarded using Defense Department money. Funding for the projects had been frozen by lower courts while a lawsuit over the money proceeded. The court’s four liberal justices wouldn’t have allowed construction to start.
The justices’ decision to lift the freeze on the money allows President Donald Trump to make progress on a major 2016 campaign promise heading into his race for a second term. Trump tweeted after the announcement: “Wow! Big VICTORY on the Wall. The United States Supreme Court overturns lower court injunction, allows Southern Border Wall to proceed. Big WIN for Border Security and the Rule of Law!”
The Supreme Court’s action reverses the decision of a trial court, which initially froze the funds in May, and an appeals court, which kept that freeze in place earlier this month. The freeze had prevented the government from tapping approximately $2.5 billion in Defense Department money to replace existing sections of barrier in Arizona, California and New Mexico with more robust fencing.
The case the Supreme Court ruled in began after the 35-day partial government shutdown that started in December of last year. Trump ended the shutdown in February after Congress gave him approximately $1.4 billion in border wall funding. But the amount was far less than the $5.7 billion he was seeking, and Trump then declared a national emergency to take cash from other government accounts to use to construct sections of wall.
The money Trump identified includes $3.6 billion from military construction funds, $2.5 billion in Defense Department money and $600 million from the Treasury Department’s asset forfeiture fund.
The case before the Supreme Court involved just the $2.5 billion in Defense Department funds, which the administration says will be used to construct more than 100 miles of fencing. One project would replace 46 miles of barrier in New Mexico for $789 million. Another would replace 63 miles in Arizona for $646 million. The other two projects in California and Arizona are smaller.
The other funds were not at issue in the case. The Treasury Department funds have so far survived legal challenges, and Customs and Border Protection has earmarked the money for work in Texas’ Rio Grande Valley but has not yet awarded contracts. Transfer of the $3.6 billion in military construction funds is awaiting approval from the defense secretary.
The lawsuit at the Supreme Court was brought by the American Civil Liberties Union on behalf of the Sierra Club and Southern Border Communities Coalition. The justices who lifted the freeze on the money did not give a lengthy explanation for their decision. But they said among the reasons they were doing so was that the government had made a “sufficient showing at this stage” that those bringing the lawsuit don’t have a right to challenge the decision to use the money.
Alexei Woltornist, a spokesman for the Justice Department, said in a statement, “We are pleased that the Supreme Court recognized that the lower courts should not have halted construction of walls on the southern border. We will continue to vigorously defend the Administration’s efforts to protect our Nation.”
ACLU lawyer Dror Ladin said after the court’s announcement that the fight “is not over.” The case will continue, but the Supreme Court’s decision suggests an ultimate victory for the ACLU is unlikely. Even if the ACLU were to win, fencing will have already been built.
Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan would not have allowed construction to begin. Justice Stephen Breyer said he would have allowed the government to finalize the contracts for the segments but not begin construction while the lawsuit proceeded. The administration had argued that if it wasn’t able to finalize the contracts by Sept. 30, then it would lose the ability to use the funds.
The administration had asked for a decision quickly.
The Supreme Court is on break for the summer but does act on certain pressing items.
It was an excellent meat animal sale thanks to a strong turnout and great weather Friday at the Rock County 4-H Fairgrounds.
Sale co-chairman Ryan George said despite fewer 4-H exhibitors this year, bidders spent $408,569 during the sale.
It started at 9 a.m., but with 459 animals to sell, it lasted almost five hours. For those in attendance who aren’t bidding, the drone of the auctioneer and the light breeze inside the sale arena could have brought on a midday nap.
Of the 459 animals sold, 133 were lambs, 298 were barrows and 28 were steers.
The children who raised the animals gathered at the edge of the hog barn. One by one, they filed into the sale arena when their names were called.
They held brightly colored signs displaying their name and club. Many signs said “THANK YOU!” in big letters. Some included photos of the animals up for bid.
Bidders in the audience held packets that listed the weights and breeds of each animal. The voice of auctioneer Dean George—Ryan’s uncle—of George Auction Service cut through the air, typically sounding something like this during the barrow sale:
“Two, gimme two, gimme two, TWO! Two dollar quarter now, 25, two, 25, two dollar quarter, now half, gimme half! Two-seventy-five, half, 75, 75! Three, 75, three, 75, three, 75, SOLD! For $2.75.”
Bidding started at $2 per pound for barrows and increased 25 cents per bid. Most pigs sold somewhere around $3 per pound, although Logan Bennett’s 279-pound grand champion barrow sold for $12.50 per pound to Jake’s Electric in Clinton.
Once a child’s animal was sold, he or she grabbed a sheet confirming the buyer and left the building. Some filed into the crowd to shake hands and say thank you. A few, such as Kaden Butts of Evansville 4-H, gave gifts to their buyers.
When it was Butts’ turn in the arena to sell his two pigs, his sister, Emerson, joined him.
She carried two pink gift bags in her hands.
The bags held sweets from Gigi’s Cupcakes in Madison. Jayson Butts, their father, suggested the idea a few years ago, their mom, Courtney, said.
“I just figured it would be nice since they were buying our animals, it would be polite to give them a gift,” Kaden said.
Gratitude for the buyers continued right until the end. When Shelby Ward of Turtle 4-H came up as the final exhibitor, Dean George encouraged the thinning crowd to spend what they had left.
It isn’t easy being last. Ward knew this, so she made fliers and distributed them to bidders long before her name was called.
She started laughing as the bids rolled in. She was a little nervous and is prone to laughing easily, she said.
Her two pigs netted $3.75 per pound and $3.50 per pound. She was really happy with the prices, she said.
Ward’s mom, Katie, said Shelby, 15, saved up paychecks over the past year to buy her pigs and their feed.
Ryan George said some of the repeat bidders, such as Woodman’s or 4-H booster clubs, are approaching some major lifetime contributions. Some people bought his animals years ago, and now they buy his kids’ animals, he said.
For full fair coverage, including a daily schedule, go to Gazettextra.com/fair.
Carl W. “Bill” Carlson
Mildred J. Bowman
Seth Connor Stricklin
Robert F. Tallent
Mary Ann C. Thompson
In late July 2017, then-Gov. Scott Walker and Terry Gou, then chairman of Foxconn Technology Group, signed a document outlining a deal for Foxconn to spend as much as $10 billion on a manufacturing complex and create up to 13,000 jobs in exchange for up to $3 billion in public money over 15 years.
“This is something,” Walker declared at the signing ceremony, “that will say to the world, ‘We have arrived.’”
Two years later, what the governor said would be “a transformational, once-in-a-lifetime opportunity for Wisconsin” has a way to go if it is to achieve that status.
Foxconn has stepped back from building the type of factory it contracted with the state to build and has shifted its planned employment mix away from a heavy emphasis on production workers—changes that have prompted Gov. Tony Evers, who defeated Walker, to say the contract might need to be revised.
In some cases, Foxconn has not met timelines it laid down in its own announcements—announcements that might have been tied as much to political considerations as to actual business needs. And a UW-Madison spokesman said that because of changes at Foxconn, there has been “no significant progress” in discussions related to Foxconn’s announcement last August that it would invest $100 million in the university.
But amid much skepticism, including from Evers, Foxconn has held fast to the key pledge of 13,000 jobs. The company said this week that it was “reaffirming our investment and job creation commitments” and was “thrilled to be moving into the next stages of construction” on the country’s first liquid crystal display panel factory.
“This is a marathon, not a sprint,” said Mark Hogan, who heads the Wisconsin Economic Development Corp. and helped negotiate the state’s deal with Foxconn.
Assembly Democratic Leader Gordon Hintz, D-Oshkosh, a critic of Foxconn and the state’s deal with the company, puts it differently. The originally proposed and agreed-to project “no longer exists by Foxconn’s own admission,” Hintz said in a statement Thursday. “After two years of uncertainty, the reality is we still have very little idea of what is going to take place, what Foxconn is going to be manufacturing, and whether it’s remotely viable in the current market.”
Here’s a look at where things currently stand.
The fab: Foxconn has been pouring scores of concrete footings—it looks like the total will easily top 200—to support its planned flat-screen factory—or, in industry jargon, fab—in Mount Pleasant.
The plant is to cover nearly 1 million square feet—large for a Wisconsin factory but hardly unprecedented. The Mercury Marine plant along Interstate 41 in Fond du Lac is 2.5 million square feet. The Quad/Graphics printing plant in Lomira, also along I-41, is 2.2 million square feet. When Tower Automotive still was operating in Milwaukee in 2001, its north side manufacturing complex covered 3.5 million square feet.
The plant Foxconn is building now—the company said it so far has awarded more than $150 million in construction contracts to Wisconsin-based businesses—also represents about 5% of the 20 million square feet of facilities that Walker touted and President Donald Trump declared would be “the eighth wonder of the world.”
As has been frequently noted, the plant will not be the “Generation 10.5” fab called for in Foxconn’s contract with the state, but a smaller and less costly “Generation 6” plant.
Foxconn also has sharply altered its original hiring plans to emphasize engineers and knowledge workers, greatly reducing the chances the factory will provide large numbers of good-paying jobs for the less-skilled.
A May 2017 document prepared by Foxconn’s consulting firm said the company expected to open a Generation 6 fab in the fourth quarter of 2019. Foxconn now says the plant will open in the fourth quarter of 2020.
“I’m not surprised that this has taken this long, but it’s good to see where they’re going right now,” Hogan said.
He said the company needs flexibility to make decisions that lead to business success. All the engineering jobs at Foxconn—executives have said engineers and knowledge workers will number in the thousands—ultimately will spawn new production jobs at firms that supply Foxconn, Hogan said.
The contract: Evers has said he wants to renegotiate the agreement and that Foxconn, too, wants to change the deal.
Evers broached the subject in an April 23 letter to Foxconn executive Louis Woo. In another letter early this month to Hogan, Evers offered a glimpse into his reasoning.
The “unprecedented incentive package” Foxconn got in the contract was justified by the massive scale of a Generation 10.5 display factory and the promise of new manufacturing jobs, Evers wrote. But with the project evolving substantially “from what was originally proposed, evaluated and contracted for,” changes to the contract—or even a new deal—must be considered, the governor wrote.
Hogan said he doesn’t view the change to a Generation 6 plant as an issue. When Foxconn originally proposed building both types of factory—not necessarily in the same location—Hogan said he thought the Generation 6 was preferable because it lent itself to making a wider variety of products.
In any event, he pointed out, as he often has, that the state contract is performance-based: Foxconn won’t get incentive payments if it doesn’t hit job and investment targets.
The firm missed out on jobs incentive payments for 2018, falling 82 jobs short of the 260 minimum requirement. It will need 520 jobs by the end of this year to get any payments for 2019, and 1,820 next year to receive payments for 2020.
The $100 million pledge to UW: Last August, UW-Madison Chancellor Rebecca Blank and Gou announced that Foxconn had pledged up to $100 million to the university, in the form of a matching gift, to support research and other activities.
Asked about the status of the pledge, university spokesman John Lucas said Wednesday by email that UW continues to hold discussions with various Foxconn groups about collaboration.
“However,” Lucas said, “as a result of changes in Foxconn’s executive leadership and business priorities, there has been no significant progress in discussions related to the $100 million investment that was announced in August 2018.
“UW-Madison is hopeful that discussions will move forward in the coming months.”
Foxconn, for its part, said it “remains committed to investing in engineering and innovative research at the University of Wisconsin-Madison.”
Gou announced last month, amid his bid to be elected president of Taiwan, that he was stepping down as Foxconn chairman effective July 1. He lost in the primary last week.
The venture fund: The $100 million fund announced last August by Foxconn, Advocate Aurora Health, Johnson Controls and Northwestern Mutual was incorporated in April as Wisconn Valley Ventures LP. Venture capital veteran Jason Franklin, a UW-Madison graduate and holder of a doctorate in computer science from Carnegie Mellon University, has been hired to manage the fund.
”Foxconn is pleased to confirm that we paid the $25 million to the Wisconn Valley Venture Fund in June,” the company said by email.
Johnson Controls and Advocate Aurora said they too have made their contributions. A Northwestern Mutual spokeswoman said such funds “operate on a ‘pay as you go’ system,” with partners contributing as opportunities are identified.
“We remain fully committed to the fund and have contributed to all requests,” she said.
Franklin did not respond to questions about the fund.
The innovation centers: Walker, who at the time was facing a tough re-election battle, hailed these as examples of the “Foxconn bonus” benefiting all Wisconsin. As much as a year later, there is meager evidence of activity at centers announced in 2018 for Green Bay, Eau Claire and Racine.
No permits have been sought for work on buildings Foxconn bought in Green Bay and at 1 Main St. in Racine, though the firm said last fall that its goal was to occupy them as early as within a few months. Nor did Foxconn buy a six-story Eau Claire building that it said last July it had entered into a “definitive agreement” to purchase.
Foxconn did pull a permit for $50,000 in roof repairs on a second downtown Racine building it bought at 601 Lake Ave.
And the company followed through on another announced Eau Claire purchase, buying part of a different downtown building there and saying last fall that it wanted to occupy the 15,000-square-foot space as soon as December. But while Foxconn took out a permit in late January to do $2 million in remodeling at the location, as of late last week the space remained vacant.
In downtown Milwaukee, meanwhile, where Foxconn has said it will turn its seven-story North American headquarters building into “a state-of-the-art facility” that will showcase the firm’s technologies, the large majority of updating scheduled so far has been for two tenants, Robert W. Baird & Co. and Ixonia Bank, which is putting a branch in the building.
Foxconn said work is underway on the first stages of upgrading and modernizing the Milwaukee building.
The innovation centers, the firm said, will be regional hubs for its tech workforce across Wisconsin and will work closely with the operations in Mount Pleasant.
“Our first step is to build out the core of our network at our manufacturing facility in Racine and the hiring at our innovation centers will follow,” the company said.
The other real estate purchases: Beyond the downtown buildings across Wisconsin, Foxconn has bought at least 250 acres of open land outside its project zone. Sixty-five acres are in Kenosha County, about 4 miles south of the future factory. The rest is near the site. Foxconn is to sell some of that land to Mount Pleasant, but the transaction hasn’t closed yet.
All told, Foxconn has spent about $10 million on the land purchases outside the project zone and nearly $44 million on buildings in Milwaukee, Racine, Green Bay, Madison—a purchase that closed just last month—and Eau Claire.
Land acquisition, residential displacement and local borrowing: The village of Mount Pleasant acquired 73 “residential parcels”—and roughly that number of homes—in the Foxconn area. Homeowners were paid what the village has described as 140% of fair market value and relocation assistance. The great majority of the homes have been torn down. The village’s threat to use eminent domain to seize property in an area it declared to be blighted angered many residents, but few refused to sell.
The village also bought 2,335 acres—more than 3½ square miles. By far the lion’s share of that was open land, most of which had been farmed. The village paid $50,000 an acre for that land—several times the going rate for farmland in the area before Foxconn appeared on the scene.
The village has transferred about 887 acres to Foxconn, but the local contract with the company calls for the firm ultimately to pay for that and for all the land the village has purchased. Foxconn has paid the village $60 million already and is to pay additional annual assessments toward the land-acquisition costs.
The company also has guaranteed there will be at least $1.4 billion of new property value in the tax increment district created for the project. Together with Foxconn’s land-acquisition payments, that will be enough to pay, over as many as 30 years, for the estimated $911 million in local costs, officials say. Besides purchases of property, those costs include such things as new sewer and water lines, potential incentive payments to Foxconn, and repayment of the roughly $350 million borrowed by the village and Racine County.
Last August, Moody’s Investors Service lowered Mount Pleasant’s credit rating a notch, citing the Foxconn debt and uncertainty of enforcing the company’s guarantee if necessary.
The rating is still in a tier judged to be “of high quality” and subject to “very low credit risk” but now is in the bottom layer of that tier.
The electrical project: The high-voltage lines and substation American Transmission Co. is building to feed to Foxconn are to be finished by the end of December. The estimated $117 million cost of the project will be borne by residential and other electric customers over 40 years.Roadwork: While Foxconn is behind on the factory construction timetable contained in its May 2017 request for proposals for state assistance, road construction in the area is either on schedule or close to it, a Department of Transportation spokesman said.
The major project, rebuilding Interstate 94 to eight lanes from Highway 142 in Kenosha County to College Avenue in Milwaukee, was planned well before Foxconn. Timing of the construction, however, appears to have been pushed up because of the development. Contracts awarded for the work total $410 million, which is coming from a combination of state and federal money.
Contracts awarded so far for expansion of local roads next to and near the Foxconn site total about $97 million. Other local road projects have not yet been bid. In October 2017, the Transportation Department estimated the total cost of local roadwork would come to $134 million. The department’s latest master contract schedule suggests a total of $160 million to $170 million.
Blackhawk Community Credit Union’s planned rehab of the former Chase Bank downtown would bring the oldest part of the building back to its original, 1913 glory.
But it would be a double-preservation project.
For one, the building at 100 W. Milwaukee St., originally known as the First National Bank, will be restored to its original look. The credit union plans to remove a glass and granite facade that has covered the building’s 1913 exterior for more than 40 years.
Inside, the credit union plans to uncover the building’s original cathedral ceiling as part of a restoration that will make the building’s three-story interior open and visible from the first-floor lobby for the first time since the late 1970s.
Then there’s the credit union’s planned use of the building.
The credit union plans to create and operate the Legacy Center, a museum-like space designed to keep alive the memory of thousands of local autoworkers who worked at the General Motors assembly plant in Janesville.
The center would showcase thousands of artifacts from the plant that Blackhawk has spent more than a year collecting and archiving.
Sherri Stumpf, CEO of Blackhawk Community Credit Union, and local developer Jim Johnson, the Chase Bank’s most recent owner, confirmed the credit union this week closed on buying the three-story, 24,000-square-foot former bank.
Johnson’s development group, the Johnson Ryan Partnership, sold the property to the Legacy Foundation, a new nonprofit organization Blackhawk has established to rehab the building and then operate the Legacy Center.
Stumpf announced earlier this year the credit union’s plan to buy the former bank, which has been vacant nearly two years. The announcement was made after the credit union decided against building Reflections Plaza, a multimillion-dollar, combined corporate headquarters and Legacy Center along the Rock River on South Water Street. That plan fell through amid concerns about the environmental complexities of redeveloping the riverfront parcels, Stumpf said.
Under the credit union’s new plan, it purchased the former Moose lodge on Rockport Road to be remodeled into a new headquarters. The former Chase Bank would be home to the Legacy Center, Stumpf said.
By September, Stumpf said, crews from JP Cullen will begin to remove the former bank’s granite and glass facade that was installed in 1977. Inside, crews will “completely gut” and open up the building’s original construction.
Anyone visiting the future Legacy Center will be able to look up and see the ornately molded plaster ceiling that has been hidden for decades above a drop ceiling.
A balcony will be reopened to view floor exhibits of items large and small from the General Motors plant, Stumpf said.
Blackhawk is working with museum curating consultants, but early plans for displays, Stumpf said, include a miniature assembly line in the lobby that people can view from the balcony—a sort of recreation of a 1933 World’s Fair exhibit in Chicago, during which GM workers showed the public how vehicles were built on a line.
The bank’s vaults will be repurposed as research and reading rooms with collections of hundreds of manufacturing and maintenance manuals for vehicles built at the GM plant.
Blackhawk originally was a credit union established for union autoworkers at the GM plant.
“We’re trying to make it very interactive. It is not a museum. It is a Legacy Center—the idea of the Legacy Center being that we’re trying to provoke memories, conversation, give people a place to gather and talk about why the plant was important. And how it affected their family and this community and what made it different. You know, other General Motors plants for years traveled to (the) Janesville plant to find that out. It was looked at as a model,” Stumpf said.
The credit union’s goal is to have the Legacy Center up and running by 2021, which was the original timeline for the Reflections Plaza.
Stumpf said the credit union plans to re-open the parking lot surrounding the former bank to help create more parking on the west side of downtown.
Stumpf wouldn’t say what the remodeling will cost. She said the Legacy Center would run through the Legacy Foundation, which will operate separately from the credit union.
Stumpf believes the Legacy Center would be “self-sustaining.” She said its nonprofit status would make it eligible to receive grants and tax-deductible donations. Also, she said, the property would generate some of its own revenue. It would have a coffee shop, and the credit union would remodel the building’s newer, west wing as space that could be leased for office or event space.
Multiple GM retirees have volunteered to staff the center and guide people through the displays of items Blackhawk salvaged from the plant during its recent demolition. Others have donated local GM artifacts.
Stumpf declined to disclose the sale price, but she said it was “far less” than the $2.4 million the building was appraised at in 2017, before JP Morgan Chase & Co. sold the property to Johnson. It carried a 10-year deed restriction that prevented the building from being re-used as a bank.
Johnson said he sold the property for cash, along with an agreement he would donate to the Legacy Foundation.
Johnson bought the former Chase Bank in 2017 for for $550,000. He said he had offers from multiple developers, most saying they would demolish the bank. One developer had wanted to clear the property for new apartments.
Johnson’s father and father-in-law both were directors at former banks in the building. He knew and remembers its original face, the one under all the drop ceilings, granite and glass.
He said he didn’t want to sell the old bank to a developer who’d tear it down.
“We resisted doing that. It’s an important historic property in downtown Janesville,” Johnson said. “We wanted to make sure it was redeveloped and part of the future of Janesville for a long time to come.”