Nothing creates opposition like vague communication and keeping people in the dark. This only breeds mistrust and fills informational voids with skepticism. The human brain is intrinsically wired to hate uncertainty, and ambiguity only creates friction in every aspect of life — business, politics, interpersonal relationships, or otherwise. When negotiating a business deal, the easiest way to screw it up is to erode trust of the other party before the ink is dry. Once trust is compromised, the other party will view every proposal with suspicion, causing the deal to stall or collapse entirely. Tech companies violated this basic principle and ruined their credibility by forcing communities to sign non-disclosure agreements (NDAs) before the conversation even started.
Tech companies and elected officials created the data center backlash themselves while initially shirking responsibility to clean up their mess. When deals get personal and billions are on the line, things can escalate quickly. The fundamental rule of thumb in negotiations is to always remain in control of your message. Positions can change, but only if both sides proactively use clear, actionable communication. Southeast Wisconsin knows this all too well and the results speak for themselves.
Southeast is Open for Business
For the past decade, business has been booming in Southeast Wisconsin. Since 2023, Kenosha County alone has accounted for more than 3,000 jobs, $4.8B in capital investment, and nearly 5 million square feet of development. Businesses include pharmaceutical giant Eli Lilly ($4B investment); German confectionary giant HARIBO ($300M to build its first US manufacturing plant); Uline continues to grow and expand is massive operation ($170M additional investment after relocating its HQ from Illinois in 2010); Smurfit Westrock ($140M investment); Japanese robotics company Yaskawa Electric Corp ($180M investment – relocating U.S. HQ from Illinois this month), Waukegan Steel (built Soldier Field – relocating HQ from Illinois).
Then there is Rockwell Automation with a $2B investment in New Berlin; Clarios with a $600M investment in Glendale; Kedali America with a $72M in Racine; GZ Print Pak, Niagara Bottling, Kroeger — the list goes on and on.
Manufacturing is the economic engine that powers Wisconsin. Even when there is a slump in the manufacturing cycle, the capex spend continues in Southeast. This background context is important because anyone who treats the data center skepticism in this region as a sudden attack of Luddism has not been paying attention to the business growth since 2017. There is more to the backlash than the “anti-business / anti-growth” arguments.
WE Energies Raise Electric Bills Again
Wisconsin residents are increasingly concerned about the rising costs of energy. WE Energies is now seeking additional rate hikes that would raise electric bills 14% over the next two years. The Wisconsin Public Service Commission previously took important steps of strengthening protections for ratepayers by requiring large data center companies to cover 100% of their energy costs. If these data centers are the economic juggernaut their proponents claim to be, then these companies should be able to stand on their own merits without requiring financial assistance.
Wisconsinites should not be forced to subsidize some of the world’s largest corporations. But what happens when these companies need build additional energy sources to power their data centers? What guarantees do we have as taxpayers that we are not on the hook for future projects? The current infrastructure is barely enough to power the homes and businesses currently on the grid, especially after We Energies decommissioned the coal plant in Pleasant Prairie.
For the past two decades, Wisconsin residents and businesses have consistently faced some of the highest energy rates and steepest price hikes in the Midwest. When big tech approaches a community with an offer, it is imperative we have proper negotiators at the table to ensure taxpayers are not stuck with the bill. Personally, I do not trust most state and local leaders to responsibly broker deals with big tech without these companies embedding contract loopholes and using one-sided provisions to tilt an agreement in their favor.
If these companies refuse to negotiate in good faith by offering transparency throughout the process (we’re not asking companies to share proprietary information), then one can reasonably assume these companies are building the plane while flying. Extreme secrecy backfires in the modern corporate world – tech companies know this, but they also know that local government officials are part of a sclerotic, outdated system that rarely operates under a similar business framework. This allows companies to use secrecy in order to shift focus to their preferred battleground.
Many Wisconsinites realize data centers did not suddenly emerge as a result of artificial intelligence. These centers have been around for a long time, especially since the rise of cloud computing, large internet providers and storage capacity required for companies such as Microsoft, Google, YouTube, Amazon, social media platforms, digital communications, online businesses, streaming services, cryptocurrencies, and now AI.
These services require large scale computing power and enormous amounts of electricity, sophisticated cooling systems and extensive infrastructure buildouts. These technological innovations require the power from hyperscale data centers to like the Mount Pleasant, Port Washington and Beaver Dam sites. These are not new facilities; the first hyperscale is already 20 years old (Google data center in Dalles, Oregon).
Many Wisconsinites understand data centers are a part of America’s modern infrastructure, and they are not suggesting we roll back the clock on the technological advancements made thus far. However, this does not change the fact that the number of data centers sprouting up across the globe with virtually zero transparency is causing roughly 70% of Americans to oppose building AI data centers in their local communities.
The Infamous Foxconn Deal
After what Racine County experienced with Foxconn, why should residents simply trust Microsoft to “do the right thing” based solely on corporate assurances and political promises?
The Foxconn deal (announced in 2017) promised $10B capex spend with a 20 million sq. ft. LCD manufacturing campus in Mount Pleasant, claiming to create 13,000 jobs and transform the entire region into a high-tech manufacturing hub (televisions, computer monitors, laptops, smartphones, tablets, etc.). The company would frequently boast the campus was going to be three times the size of the Pentagon. I was personally cheerleading this effort when it was announced, as it would bring thousands of jobs to an area that suffered massive losses when American manufacturing jobs were shipped overseas.
To secure the deal, state and local governments offered billions in tax incentives and public subsidies, making it one of the largest corporate incentive packages in American history. Local officials allowed eminent domain and aggressive land acquisition tactics to assemble thousands of acres for the proposed campus. Some homeowners and farmers refused to sell, arguing they were being forced off generational farmland for a speculative project.
This was devastating for longtime residents. Large stretches of productive farmland were demolished and cleared for the massive infrastructure project in anticipation of a manufacturing boom that never materialized. Over time, Foxconn repeatedly scaled back plans or defaulted on the agreement altogether. It failed to deliver the scale of investment and job creation initially advertised. Out of the original 13,000 jobs promised, roughly 12,000 never happened.
The Foxconn site became an unsightly symbol of corporate overpromising, government overreach and risky public-private deals negotiated behind closed doors. Wisconsin taxpayers were left subsidizing the infrastructure and land redevelopment.
Racine County (along with the Village of Mount Pleasant) originally committed to Foxconn $764–$911 million in total local subsidies and infrastructure (primarily through a Tax Increment Financing/Tax Increment District). This covered land acquisition, sewer, water upgrades, roads, and other public improvements.
Racine County alone issued approximately $110 million in taxable general obligation bonds to finance land purchases associated with the development. This is taxpayer-backed debt. Mount Pleasant ultimately had to acquire roughly four square miles of land (approximately 2,600 to 3,300 acres) from Foxconn for what became the Wisconsin Valley Science and Technology Park, much of which sat vacant for nearly a decade.
Mount Pleasant is increasingly becoming a case study for every major data center project under construction across the state. A community still grappling with the Foxconn fallout is asking reasonable questions about the Microsoft project, understandably demanding transparency from state and local leaders to ensure they have learned the hard lessons from the past.
The data center debate is no longer simply about environmental impact or water consumption. Southeast Wisconsin counties continue to prove they are pro-business communities that welcome jobs, innovation, and responsible development. Most of the residents raising questions and concerns are not radical environmental activists chaining themselves to bulldozers to protest the development. Many residents are understandably wary of being left financially responsible for these projects. (Other concerns include noise and significant reductions in home equity).
It would be wise for communities to remember the lessons of Foxconn before rushing headfirst into another massive development project. Rep. Tom Tiffany (Republican nominee for Wisconsin governor) is taking the correct approach by acknowledging that residents have legitimate concerns about large-scale data centers, farmland preservation, socializing energy costs, infrastructure strain, and corporate subsidies. Tiffany will end every data center subsidy in the state. Listening to local communities instead of offering sweetheart deals to multinational corporations is not anti-growth – it demonstrates Tiffany’s genuine respect and concern for Wisconsinites and his unwavering commitment to protect our state.
