Will Southeastern WI become hot bc of Foxconn?

Question

With the latest news coming from Wisconsin today and the possibility of 3 to13k jobs being created in the coming years (so they say) who has thoughts on looking into southeast, WI? Am I just chasing a hot tip?

John Franczyk · Answer

I'm in Racine, and I live a few miles away from the proposed FoxConn campus. The County and State are doing a lot of infrastructure work on the roads to prepare for the construction, which looks like it's really going to happen.

I think the bigger issue in Wisconsin right now is how the political climate will alter things. Our elected leaders on both sides of the aisle can't seem to get out of each other's way. A subset of the group that opposed FoxConn is now clamoring for more guarantees for jobs to go to lower-income parts of Milwaukee. Local towns are under pressure over "eminent domain" issues, where they are attempting to buy out the few holdouts that want more money for their property. Every week, a new environmental objection comes up (e.g. FoxConn will use too much water, etc.). If the politicians ever decide to solve potential problems instead of throwing mud at each other, the growth outlook will be much stronger.

That said, I see the outlook as relatively strong right now. Local realtors in Kenosha and Racine, for example, are still knocking on doors and are cold-calling clients with promises of inflated prices for their homes. Right now they are selling more sizzle than steak. The steak might not be ready for a year or two, which suggests that buyers who come in now have prospects of riding a wave of appreciation.

Prices in Racine and Kenosha for quality SFR's currently seem to be inflated by about 10%. I don't know how that compares to Milwaukee, but from what I can tell from anecdotal evidence, many parts of Milwaukee outside of the war zone are looking good. Again, if our politicians can ever grow up, we could be seeing strong value growth over the next few years all over southeast Wisconsin.

Carl Lee · Answer

@Cody Barrett, I was looking into the Racine area as well but further research into FoxConn didn't paint a pretty picture.

I'm surprised no one has mentioned the failure to build a factory in Harrisburg, PA with 50,000 US jobs, but the CEO has a number of announced buildings and factories worldwide that just never come to exist.

Cody Barrett · Answer

Well it has been a few months since this post.  FoxConn will be up before we know it. I think the huge tax benefit they got has other big businesses poking around in Racine. I mean 3 billion (almost 4 now) is a huge chunk of money for a company to get SO THEY BETTER PULL THROUGH AND TRICKLE IT DOWN. lol.....

Honestly it is a great spot for businesses....  With Racine being right in the middle of Milwaukee and Chicago, off i-94, lake Michigan, now if only schools were vastly improved you would have younger people interested in starting a family in Southeastern WI.

WI was number 10 or 11 out of 50 with people moving out of the state.  Walker is trying to invest in marketing tactics to attract people to move back into the state.  We will see what happens. But I do think purchasing now will be beneficial, I also would not be shocked to see property taxes rise.

Account Closed · Answer

Has there been any market increase near the new Amazon facility that you noticed? Great feed back from you both, thank you.

Arun Chhatpar · Answer

@Cody Barrett and @Michael Kretch - seems like foxconn is moving forward with its WI plans - https://www.bizjournals.com/milwaukee/news/2018/02...

I am an out of state investor and am looking to explore Milwaukee and surrounding areas. Does your outlook and perspective for growth changes with the confirmation that FoxConn bought the building in downtown?

Cody Barrett · Answer

@Carl Lee Definitely....  I understand how you feel, fully.... Which is why I put in all caps, THEY BETTER PULL THROUGH lol.....  I was not a fan of the large tax break as I felt it was way too large, kind of a gamble, and how much more effective that money could have been if invested locally.  I think putting a bullet train connecting Chicago to Milwaukee could have been a game changer, along with building that Casino in Kenosha which would have paid for the Bucks new Arena in Milwaukee... but that didn't happen :(

But yeah, my post was more of a focus on Racine being a solid spot for companies to grow and manufacture.  I still think purchasing now though isn't a bad idea as values will reflect the build... 3 billion in tax breaks will get the thing built but I could be wrong, hopefully they don't back out.. I also think the type of labor FoxConn brings will be obsolete down the road as efficiency will take over through robotics and the cost of having all those employees won't make sense.  Long story short, giant tax cut for them with the possibility of a short term benefit to the city for 3 billion plus dollars....

Corina Eufinger · Answer

The burbs of Kenosha and Racine might be a better bet. Mount Pleasant, Pleasant Prairie are booming from all the industrial development regardless of FoxConn.  Once foxconn gets closer to fruition sale prices will skyrocket in the whole area.  @Michael Kretch is correct that Racine cannot quite rebound yet from the auto industry leaving.  Kenosha is increasingly having a crime problem. I anticipate the crime map on Kenosha looking much worse within 1 year.

The effect of FoxConn will extend west of those areas and north of Racine as well.

Michael Kretch · Answer

I drove up to the Kenosha/Racine area this weekend to continue getting a feel for the area and to take a look at a couple properties.  Echoing @Cody Barrett @Jason V. and an investor I spoke with in the area, Kenosha county seems to have decent momentum at the moment.  There are nice pockets in Racine but it doesn't seem to have rebounded at the same pace and the taxes can be steep.

Large companies moving into the region, the location between Chicago and Milwaukee as well as bordering Illinois seem like nice tailwinds to me.

Cody Barrett · Answer

A lot will have to be done if Racine ever becomes a city that one can expect appreciation from.  The schools have declined and the population decline isn't slowing.  Opportunity for revitalization is there but it would be expensive and the property taxes are high as it is.  The schools are very poor and it has kept talent from moving there to start careers with great companies like SCJ... Born and raised there, truly unfortunate because it was an awesome city.

Will Southeastern WI become hot bc of Foxconn?

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