The Wisconsin Department of Justice expressed concern Friday that a lawsuit on an economic development project in Eau Claire could jeopardize the $10 billion Foxconn project, which was finalized in November.
According to Wisconsin Public Radio, the 2015 lawsuit cited by the DOJ was filed by a group of Eau Claire residents who referred to themselves collectively as “Voters With Facts.”
The residents claim the city abused the state’s tax incremental financing laws. These laws provide a way for the government to subsidize community improvement projects, such as economic redevelopment and infrastructure.
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The lawsuit concerns cash payments of public money amounting to $1.5 million to a private developer involved in the construction of the Confluence Performing Arts Center and mixed-use building in Eau Claire.
The DOJ is concerned the lawsuit could put the Foxconn contract and other state development contracts in danger if “Voters With Facts” were to win in court. This view was echoed by Eau Claire city attorney Stephen Nick, who believes the case puts the legality of tax incremental districts at risk.
Both Nick and the DOJ believe tax incremental districts create economic development in the state and advocated for their continuing legality.
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The Wisconsin Institute for Law and Liberty, serving as the legal representation for “Voters With Facts,” said the DOJ’s fears are unfounded. The organization said tax incremental financing laws impact only a small percentage of the multi-billion dollar Foxconn package and believes the deal will be fine regardless of how the Supreme Court rules.
The Supreme Court will hear oral arguments on the issue on Feb. 23.