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Mount Pleasant, Wisconsin said yes to Microsoft. Was it a good deal?

A pre-built tax district, a guaranteed minimum property value, and a power tariff that makes Microsoft pay 100% of the generation built for it. Here is what the village got, and who is not at the table.

Case #1 in my data center series, Mount Pleasant, WI. Part of My Case. The blank template is here.

This is the first case in the series because it is the best-documented one I could find. If the framework is going to work anywhere, it should work here.

So I am not just asking whether the village treasury wins. I am asking who is not at the table, and which numbers are claims, which are signed, and which are actuals.

How to read this. Claims by companies, officials, and advocacy groups are labeled as claims. Where I could not find a number in the sources I opened, I wrote it down as an unknown and turned it into a question. Anything marked [DRAFT LEAN - confirm] is my position on the evidence, and I am open to changing it. Facts are as reported through Oct 29, 2026.

The short version

For the village treasury, this deal looks good on the public record: a pre-built tax district, a guaranteed property value, and a regulator-written power tariff that makes Microsoft pay 100% of the generation built for it. The open items are the ones the village does not control: transmission costs, the school district waiting for its share, and a neighboring town that had no vote.

Key numbers

  • $8.4B Projected taxable value, all phases (Estimate by the Wisconsin Policy Forum; village equalized value is $8.5B today [2])
  • $3.8M Property tax Microsoft paid in 2025 (Village figure, on its 2024 bill. Corrected by Racine County Eye [1])
  • 100% Of generation cost on the data center (15-year minimum contract, 100 MW threshold [5])
  • 550 to 800 Operations jobs, now to 2028 (Employees and vendors. Company figure [1])

For the five-step test I use below, see the framework template. Most tables have a “My lean” column so you can see where my reasoning goes and argue with it.

The project

  • What: Microsoft’s Fairwater AI data center campus. Phase 1 was announced operational on June 23, 2026 (residents say it was running in April) and is billed as the world’s most powerful AI data center. That claim is Microsoft’s and has not been independently verified [1].
  • Where: Village of Mount Pleasant, Racine County, Wisconsin (population 28,636). The campus sits on land the village prepared for Foxconn’s failed factory, inside Tax Incremental District No. 5 [1][2][4].
  • Size: Phase 1 is a stated 400 MW maximum, with about 900 MW needed within a few years [7]. We Energies’ investor filings put the whole I-94 buildout at 2.6 GW [1]. WPF lists the campus at 1 GW or more across 11.2 million square feet and 1,896 acres [2].
  • Investment: $3.3B for phase 1, another $4B announced for phase 2 (due 2028), and $20B or more over a decade. The village has approved two more campuses to the north. All company figures [2][4][7].
  • Land deal: Microsoft bought 315 acres inside TID 5 for $50M in 2023. It guaranteed a minimum assessed value of $1.4B by 2028 [1][2].
  • Status: Phase 1 operating since spring 2026. Phase 2 under construction. About 15 more buildings approved [1].
  • Who decides: Village Board, Plan Commission, and related bodies voted 20 times on phase 1 alone. The Public Service Commission regulates the power tariff but not siting or water [2][5].

Step 1: Define the community

Scale What they get and what they carry Who decides My lean
Immediate neighbors (Sturtevant and nearby homes) Fan hum audible indoors with windows closed after phase 1 opened. Microsoft says it fixed the noise by adjusting fan speeds and adding sound-reduction parts (company claim). Residents also sued Microsoft in July 2026 over noise, and others cite construction dust, light and traffic [8]. Sturtevant is directly north, was never consulted, and had no vote [1]. Nothing. The data center is in another municipality. [DRAFT LEAN - confirm] No, unless the neighbor town gets a seat and binding noise limits.
Village of Mount Pleasant Gets the tax increment and the 550-plus jobs. Carries the TID debt, fire protection, and the risk of tying a large share of the tax base to one customer. Equalized value is $8.5B, and the data center is projected at $8.4B [2][4]. Village Board and Plan Commission. More than 50 approval votes since 2017 across Foxconn and Microsoft [2]. [DRAFT LEAN - confirm] Yes. The village inherited sunk infrastructure and the people voting carry the risk.
Racine County, Racine Unified, Gateway Technical College Get none of the increment until TID 5 closes. The village now projects closure around 2031 (cash-flow estimate), against a legal limit of 2047 [1][4]. After that the money is shared with the village [3][4]. Joint Review Board and county signatures on the land agreements [4]. [DRAFT LEAN - confirm] Conditional yes. Wait times are short, but they should be written in.
We Energies territory (about 1.1 million electric customers) The pool that would pay if cost shifting happens. Pre-tariff, regulators had approved two gas plants of 1,100 MW and 128 MW, costing about $1.5B, to be recovered through general rates [6]. WEC projects 45% regional demand growth in five years, driven mainly by this campus and Port Washington [1]. The Public Service Commission (PSC) sets the tariff. FERC sets transmission rates [2][5]. [DRAFT LEAN - confirm] Conditional yes, if the tariff holds in the 2027 rate case.
State of Wisconsin Forgoes sales tax: $1.5B over 2024 to 2028 across four projects, then about $369M a year. Recoups some through income tax and utility taxes [2]. Legislature. The exemption was written into the 2023 to 2025 budget before the boom [2]. [DRAFT LEAN - confirm] Fix the exemption, not the village. Add performance requirements.

Step 2: Net-benefit test

Costs first. Each row says who carries it, what the record shows, and where the gap is.

Cost Who bears it Evidence My lean
Power generation Microsoft, under the April 2026 tariff. All We Energies customers before it. PSC rewrote the tariff on April 24, 2026: 15-year minimum term (up from 10), 100 MW threshold (down from 500), and Microsoft pays 100% of the generation built for it. The utility had proposed a 75% option that left 25% on other customers [5][6]. Developers rated below A- must post cash or credit [6][2]. [DRAFT LEAN - confirm] This is the model. Require it everywhere, with collateral.
Transmission Unknown. Existing customers until FERC rules. ATC (the transmission owner) asked FERC in August 2026 for a rate that makes data centers pay for their own lines. WPF says it “remains to be seen” [2]. A PSC analysis cited by Yale found existing customers would pay about $63M in 2027, rising toward $100M in 2028 for data-center-driven transmission (secondary source) [6]. Unknown – the net amount after the tariff change. [DRAFT LEAN - confirm] No cost shifting through the back door. Make the FERC outcome a condition.
Distribution Initially ratepayers. We Energies planned $335M of dedicated feeders and transformers for the campus. About $100M of early work used a 2017 Foxconn-era exemption from PSC approval [6]. Unknown – final allocation to Microsoft. [DRAFT LEAN - confirm] Show the final bill in writing.
Retail rates All We Energies customers. Customers saw a cumulative 12.38% electric increase in 2025 and 2026, with another increase filed for 2027 [1]. Unknown – how much of that the data center caused. Microsoft says it will pay rates “high enough” to cover its costs [9][10]. [DRAFT LEAN - confirm] Rates that rise while the data center says it pays its way is the thing to watch. Demand a rate-case attribution.
Water Racine Water Works (Lake Michigan). Public records show 2.8M gallons a year now, and Microsoft estimates 8.4M gallons a year when fully operational [7]. WPF notes Racine’s annual sales fell 2.3 billion gallons from 2000 to 2025 [2]. Unclear whether 8.4M covers the whole campus or phase 1. Power-plant water is extra. Closed-loop cooling is a company design claim [9]. [DRAFT LEAN - confirm] Low risk on the numbers. Confirm campus-wide and publish annual totals.
Noise Sturtevant residents. Residents reported a persistent hum in April; Microsoft says it is resolved (company claim) [1]. A lawsuit over noise was filed against Microsoft in July [8]. Unknown – measured decibels at the property line and the lawsuit’s outcome. [DRAFT LEAN - confirm] Binding limits, measured and posted.
Tax district debt and timing Village now. Schools and county until closure. TID 5 total expenditures are $1.33B, of which $1.29B was committed for Foxconn, so Microsoft added little spending [2]. About $220M of village and county debt principal is outstanding in 2026, with a projected $73.8M fund balance [4]. Existing taxpayers can see a short-run levy increase before the district closes [2]. [DRAFT LEAN - confirm] Good: little new borrowing. Get a written plan for the levy.
State sales tax exemption State of Wisconsin. Legislative Fiscal Bureau: $1.5B forgone over 2024 to 2028 across four projects and $369M a year after. Microsoft says the exemption was one of several factors [1][2]. WPF finds the state would recoup the costs if about two-thirds of the investment depended on the exemption [2][3]. [DRAFT LEAN - confirm] Tie any exemption to jobs and tax minimums.
Obsolescence and stranded value Village and taxing bodies. Servers have shorter lives than factory machinery, and WPF could not find a massive data center that has closed [2]. Microsoft’s $1.4B guarantee covers value, not use [4]. Unknown – decommissioning obligations. [DRAFT LEAN - confirm] Require a decommissioning bond, as in other deals.

Now the benefits.

Benefit Who gets it Evidence My lean
Property tax Village now. County, schools and college after the TID closes. Increment value was $3.19B at the start of 2026, projected to reach $7.41B in 2029 and $123.6M a year at a $16.68-per-$1,000 rate. These are village projections, not collected revenue [4]. Actual: Microsoft paid $3.8M in 2025 [1]. WPF estimates the first two phases add about $4B of value by 2029 and more than $114M a year [2]. Personal property (servers) is not taxed in Wisconsin since 2024 [2]. [DRAFT LEAN - confirm] The core benefit. Count it, but test it against the projection each year.
Developer incentive, handed back Village taxpayers. The 2023 agreement allowed up to $5M a year ($115M total) for Microsoft. Microsoft says it will redirect it: $4.9M to the village and about $100K to the county development corporation. The village says every dollar goes to lower its property tax burden (village claim) [2][8]. Microsoft told Racine County Eye it had received no incentives from the village; both fit because it became eligible and is giving the money back [1][8]. The Village Board votes on the use in the 2027 budget [8]. [DRAFT LEAN - confirm] Good. Hold the village to the budget line.
Construction jobs and spend Regional building trades and suppliers. Peak 2,960 on phase 1 (WPF) and more than 3,000 (Microsoft). About 10,000 workers passed through the first building [1][2]. A second site is approaching a similar scale [1]. Unknown – local share and wages. [DRAFT LEAN - confirm] Real but temporary. Ask for a local-hire number.
Permanent jobs County workforce. About 550 employees and vendors now, growing to about 800 once phase 2 opens in 2028. Mostly technicians, plus security, janitorial and food service [1]. At 400 MW that is about 1.4 per MW, well above the USC benchmark of 0.15 to 0.35 for direct staff, so it may count contractors. Unknown – wages and local hires [1]. [DRAFT LEAN - confirm] A strong number if it holds. Ask whether it counts contractors and what they are paid.
Training and community Gateway Tech students, nonprofits. A Datacenter Academy with Gateway Technical College aims to train over 1,000 students. Five voluntary commitments announced in January 2026 have no outside enforcement [1][9]. [DRAFT LEAN - confirm] Nice to have. Counts only if written into the development agreement.
Grid investment others use Possibly other customers. Unknown. Under the tariff the bespoke plants are the data center’s, so it is not a clear benefit [5]. [DRAFT LEAN - confirm] Do not count it.
Economic impact claim Racine County. Microsoft cites $4.7B of local economic impact for 2024 to 2028 from a report it commissioned. It is a projection with no outside reporting [1]. [DRAFT LEAN - confirm] Treat as a company claim.

Back-of-envelope calculator

Swap in your own numbers to size any phase. Defaults are Mount Pleasant phase 1. Load factor of 100% is the upper bound. The water default is the company’s own closed-loop figure, derived from 8.4M gallons a year at 400 MW.

Inputs (defaults)

  • Capacity (MW): 400
  • Load factor (%): 100
  • Reference system size (MW): 5333
  • Taxable value ($ million): 1870
  • Tax rate ($ per $1,000): 16.68
  • Direct water (L/kWh): 0.009

What they give

  • Share of We Energies capacity: 7.5% (reference of 5,333 MW is implied by Microsoft’s claim that 400 MW is 7.5% [7])
  • Annual energy: 3,504 GWh
  • Annual property tax at that value and rate: $31.2 million, about $0.08 million per MW. Defaults are phase 1’s $1.87B [2] at the TID 5 rate of $16.68 per $1,000 [4]. This is all taxing bodies combined. A calculation, not a collected figure.
  • Direct water, on site: 8.3 million gallons a year. At the 2023 US data center average of 0.375 L/kWh [12] it would be 347 million gallons.
  • Permanent jobs, direct (benchmark): 60 to 140 (0.15 to 0.35 per MW) [11]. Reported on site: about 550 [1].

Step 3: Weight by need

Indicator What the data says What it means for the weighting My lean
County unemployment Racine County 3.4% in September 2026 (not seasonally adjusted), up from 3.1% a year earlier. Wisconsin was 2.9% on the same basis [13][14]. Low to moderate need for jobs. The county is tight. [DRAFT LEAN - confirm] Jobs alone do not carry the case.
Household income Median household income in Mount Pleasant is $91,616 [2]. Not a distressed village. Jobs matter less than tax stability. [DRAFT LEAN - confirm] The weight sits on the tax base, not employment.
Village finances Wisconsin caps operating levy growth to net new construction, so growth usually lags inflation. Property value is about triple what it was ten years ago [2]. High structural need for tax base. The data center loosens a cap that otherwise binds. [DRAFT LEAN - confirm] Real need. This is the strongest argument.
Electricity affordability We Energies customers took a cumulative 12.38% increase over 2025 and 2026 [1]. Rate-sensitive territory. Raises the bar on cost shifting. [DRAFT LEAN - confirm] Costs that touch rates count extra.
Local opinion A Marquette poll found 78% of Wisconsin voters say large data center costs outweigh benefits (August 2026), up from 55% in October 2025 [2]. The statewide mood is hostile. The village’s own residents’ view is Unknown – no village poll found. [DRAFT LEAN - confirm] Ask Mount Pleasant residents directly.

Step 4: Opportunity cost

Alternative What the record shows My lean
Foxconn-style manufacturing Foxconn promised up to 13,000 jobs and $10B. The district’s increment never reached projections, and Foxconn pays make-up payments under a minimum assessed-value guarantee [1][4]. [DRAFT LEAN - confirm] The fair comparison. The site sat mostly empty until Microsoft.
Distribution or industrial WPF cites one employee per 5,000 square feet for data centers against one per 650 for some distribution centers, but notes a plant that size may not be attractable [2]. [DRAFT LEAN - confirm] More jobs per acre elsewhere, if a tenant exists.
Same site, less AI Unknown. No study of a smaller or phased campus. Microsoft passed on a site in Caledonia in October 2025 after community concerns [2]. [DRAFT LEAN - confirm] Ask whether the 1,000-plus extra acres were needed.
Same power elsewhere Wisconsin’s electricity sales fell 9% in 20 years, so spare grid and revenue capacity existed before the boom [2]. Unknown – other industrial users who wanted that power. [DRAFT LEAN - confirm] Ask who else was in the queue.
Early TID closure Closure date is disputed: Ehlers’ advisor says 7 to 14 years before the 2047 deadline [1], the village’s 2026 report projects about 2031 [4], and WPF says 2032 [2]. Closing releases the increment, projected at about $123M a year, to all taxing bodies [4]. [DRAFT LEAN - confirm] An opportunity benefit. It depends on Microsoft’s phases and tax value.

Step 5: Leave AI out of it

Same site, same village, same Foxconn-era infrastructure, two tenants. The test is whether the community comes out ahead, not whether the tenant makes AI. By that test the Microsoft version has delivered a $2.4B district value as of 2026 [2], where the Foxconn version fell short of its projected increment [1], and the village’s new spending commitments for Microsoft are small [2]. One thing the test cannot answer: the 15 more approved buildings, because the village will be tied to one customer for most of its tax base, whatever that customer builds.

What other places do

Tool What it does Does it reach Mount Pleasant?
Very Large Customer tariff (We Energies) 100 MW or more, 15-year minimum, 100% of bespoke generation cost, financial guarantees for lower-rated developers, reporting [5][6]. Yes. Already in force.
Guaranteed assessed value Developer pays tax on a minimum value whatever the assessor says. Microsoft guarantees $1.4B; DeForest’s rejected deal had $1.2B for 15 years [2][4]. Yes.
Pay-for-performance incentives (Beaver Dam, Meta) $100M in two installments only if tax increment hits $5.7M and $5.5M a year [2]. A model for any future incentive here.
Developer borrows (Port Washington) The developer fronts $175M of infrastructure and is repaid from the increment only if the plant is complete [2]. Not needed here. Foxconn already built it.
Referendum on large TIF (Port Washington) Voters must approve TIDs above $10M, but this can add up to two years [2]. Not applied here.
No NDAs Microsoft said in March 2026 it would stop using non-disclosure agreements with local governments [2]. A transparency commitment. Verify.
Levy-limit fix WPF options: a ten-year window to use new construction, or wait until the TID closes [2]. State law change. Affects residents’ bills.

Questions the public should demand answers to

  1. What are measured decibels at the Sturtevant property line, and will the village of Sturtevant get a seat at the table for the next 15 buildings?
  2. What is the final allocation of transmission and the $335M of distribution to Microsoft, once FERC rules on ATC’s August request?
  3. How much of the 12.38% increase in We Energies rates over 2025 and 2026 is attributable to data center load, and will the 2027 rate case show it?
  4. Does the 8.4M-gallon water estimate cover the whole campus, and will Microsoft publish annual water use and replenishment for this site?
  5. Do the 550 permanent jobs count contractors, what do they pay, and how many live in Racine County?
  6. What will the village do with the $4.9M redirected incentive, and will it be written into the 2027 budget?
  7. When will TID 5 close, and what happens to Racine Unified and the county’s share in the meantime?
  8. What decommissioning or abandonment protections cover the 15 additional buildings?
  9. If the tax rate falls as value rises, what is the actual annual property tax for phases 2 through 4?
  10. Will Microsoft’s five voluntary commitments be written into the development agreements and reported by an outside party?

Where I land

[DRAFT LEAN - confirm] This conclusion is a draft of my own position.

If I lived in Mount Pleasant, I would vote yes, and here is why. The village was already holding a billion-dollar bag from Foxconn. Microsoft guaranteed a minimum value, took almost no new public money, and is handing back its incentive. The state regulator made it pay 100% of the power plants built for it. That is a deal where the costs are a fraction of the benefits, and somebody wrote down who pays. My doubts are about who is not at the table: Sturtevant, which can hear the fans and had no vote, the school district waiting for its share until the district closes, and every We Energies customer until the transmission question is settled. Whatever you think about AI, it is not the question. The question is whether the people next to this come out ahead. Here is the framework. Where does it break? Change my mind.

Sources

Numbers in brackets in the tables refer to this list.

  1. Microsoft opens the Fairwater data center in Mount Pleasant. Racine County Eye, Jun 24, 2026. https://racinecountyeye.com/2026/06/24/microsoft-fairwater-datacenter/
  2. Grounding a Charged Debate: Data Centers in Wisconsin. Wisconsin Policy Forum, Sept 2026. https://www.wpr.org/wp-content/uploads/2026/09/GroundingAChargedDebate_Full.pdf
  3. Grounding a Charged Debate (summary). Wisconsin Policy Forum via Wisconsin NewsMedia Association, Sept 30, 2026. https://wnanews.com/2026/09/30/grounding-a-charged-debate/
  4. Annual Tax Incremental District Report, TID No. 5. Village of Mount Pleasant (prepared by Ehlers), Sept 14, 2026. https://www.mtpleasantwi.gov/DocumentCenter/View/5642/Mount-Pleasant-TID-No-5-2026-JRB-Supplemental-Report
  5. PSC Overhauls We Energies’ Data Center Tariff. Public Service Commission of Wisconsin, Apr 24, 2026. https://psc.wi.gov/Documents/PressReleases/04.24.2026PressRelease.PDF
  6. We Energies’ Data Center Tariff. Yale Clean Energy Forum (secondary summary), Jun 25, 2026. https://cleanenergyforum.yale.edu/2026/06/25/we-energies-data-center-tariff
  7. Microsoft in Wisconsin; new $4B investment in Mount Pleasant. FOX6 Milwaukee, Sept 18, 2025. https://www.fox6now.com/news/microsoft-wisconsin-next-infrastructure-investment-announced
  8. Microsoft to ‘redirect’ data center incentive back to Mount Pleasant. Wisconsin Public Radio, Sept 29, 2026. https://www.wpr.org/news/microsoft-to-redirect-data-center-incentive-back-to-mount-pleasant
  9. Building Community-First AI Infrastructure. Microsoft On the Issues, Jan 13, 2026. https://blogs.microsoft.com/on-the-issues/2026/01/13/community-first-ai-infrastructure/
  10. Microsoft responds to AI data center revolt, vowing to cover full power costs and reject local tax breaks. GeekWire, Jan 13, 2026. https://www.geekwire.com/2026/microsoft-responds-to-ai-data-center-revolt-vowing-to-cover-full-power-costs-and-reject-local-tax-breaks/
  11. Data Center Employment Forecast Analysis. USC Zage Business of Energy Initiative, Dec 2025. https://hamminstitute.org/site-files/documents/data_center_workforce.pdf
  12. Data center water use (summary of LBNL 2024 figures). Who Pays for Data Centers. https://whopaysfordatacenters.com/water/
  13. September Local Employment and Unemployment Data Released. Wisconsin DWD, Oct 21, 2026. https://dwd.wisconsin.gov/press/unemployment/2026/261021-september-local.pdf
  14. Unemployment Rate in Racine County, WI. FRED, St. Louis Fed, Oct 28, 2026. https://fred.stlouisfed.org/series/WIRACI1URN

Where this fits

Start of the series: My Case. Next: Case #2, Saline Township, MI. The full series starts at My Case.

Send me a project

If there is a data center near you that you want run through this test, reply to my post on X (@arietrouw) with the project name and location. I will pick some and publish them here.

Framework by Arie Trouw (@arietrouw). Licensed CC BY 4.0.

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