Lender-Grade SBA and USDA Feasibility Studies, Calibrated to Wisconsin

1. Why Wisconsin Operates as the U.S. Manufacturing-Intensive, Compact-Governed Analytical Geography

Wisconsin closed Census Bureau Vintage 2024 at roughly 5.96 million residents across 72 counties. The state hosts a single SBA Wisconsin District Office in Milwaukee (with a Madison satellite) serving all 72 counties, with the USDA Rural Development Wisconsin State Office in Stevens Point (5417 Clem's Way, Stevens Point, WI 54482) administering Business and Industry Guaranteed Loans, REAP, Community Facilities, and Water and Environmental Programs across the rural-eligible counties. The Wisconsin Economic Development Corporation (WEDC) administers the state incentive stack, and the Wisconsin Housing and Economic Development Authority (WHEDA) administers state Low-Income Housing Tax Credits and multifamily financing.

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Five Wisconsin-specific variables redefine every Wisconsin deal and require state-specific calibration that no national template captures. Wisconsin is one of the most manufacturing-intensive economies in the country, with manufacturing accounting for more than 16 percent of state GDP and employing over 465,000 workers across more than 9,000 manufacturers, and it sits inside a water-allocation regime that exists nowhere outside the Great Lakes states.

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• First, the Great Lakes Compact water diversion regime, the single most analytically distinctive water variable in the Midwest. The Great Lakes-St. Lawrence River Basin Water Resources Compact, federally ratified in 2008, prohibits new or increased diversions of Great Lakes water outside the basin except for narrow straddling-community and community-within-a-straddling-county exceptions, each carrying a 100 percent return-flow obligation and ongoing reporting to the eight Great Lakes states and Ontario. Two Wisconsin diversions define the precedent. Waukesha received the first-ever full Compact Council diversion approval on June 21, 2016 for 8.2 million gallons per day to remedy radium-contaminated groundwater, with return flow to Lake Michigan via the Root River through a $286 million, 35-mile pipeline (a 13-mile supply line plus a 23-mile return-flow line) completed in August 2023 ahead of a court-ordered radium-compliance deadline. Racine and Mount Pleasant obtained a straddling-community diversion of 7 million gallons per day, approved by the Wisconsin Department of Natural Resources in 2018 and affirmed by an administrative law judge, originally supporting Foxconn and now servicing the Microsoft campus. This is the highest-leverage Wisconsin analytical variable for any water-intensive project: out-of-basin sites in southern Waukesha, Walworth, western Racine, and western Kenosha counties cannot be served by Lake Michigan water without a Compact-compliant finding, return-flow infrastructure, and a DNR water-supply service area plan, and a straddling-county diversion such as Waukesha's requires unanimous approval of all eight Great Lakes governors plus Ontario. No other regional water regime in the country imposes a multistate veto on industrial siting, and an out-of-state SBA 7(a) or 504 lender that treats water as a routine utility hookup in southeastern Wisconsin will misjudge both the timeline and the binary approval risk on any industrial or processing deal.

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• Second, the Manufacturing and Agriculture Credit. Enacted in 2011 and fully phased in by 2016, the credit is computed as 7.5 percent of qualified production activities income derived from Wisconsin property classified as manufacturing or agricultural, applied against the state's 7.9 percent flat corporate rate or the 7.65 percent top individual rate, which reduces the effective state tax on that income to roughly 0.4 percent at the corporate level and roughly 0.15 percent for individuals at the top bracket. For a Wisconsin manufacturer pencilling a $50 million expansion, the credit routinely converts what would be a 7 to 8 percent effective state corporate tax burden into a sub-1 percent burden, materially shifting after-tax internal rate of return. For any SBA 7(a) or 504 manufacturing or agricultural-processing target, the credit is the single most important state-level variable in a debt-service-coverage projection, and eligibility ties directly to the Department of Revenue manufacturing or agricultural classification of the underlying property. The 2025-27 biennial budget (2025 Wisconsin Act 15, signed July 3, 2025) left the credit intact.

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• Third, the Microsoft Mount Pleasant Fairwater AI data center, the single most consequential commercial real estate event in the state. Microsoft's Fairwater campus in the Village of Mount Pleasant (Racine County) is the largest single private capital investment in Wisconsin history. Phase 1 spans 315 acres, three buildings, 1.2 million square feet, and roughly 400 megawatts of peak Phase 1 demand, with commissioning ahead of schedule for an early-2026 launch. In September 2025 Microsoft announced an additional $4 billion for a second identical facility, bringing the announced spend past $7.3 billion, and in January 2026 the Village unanimously approved 15 additional buildings that could expand the campus toward 9 million square feet and a taxable value north of $13 billion. The site sits on land Foxconn acquired under the 2017 contract that promised a $10 billion display plant and up to $2.85 billion in incentives, a deal renegotiated in April 2021 down to an $80 million Electronics, Information Technology and Manufacturing Zone ceiling and amended again on November 25, 2025 to add $16 million in credits tied to a $569 million Foxconn expansion and AI server manufacturing, raising the Foxconn ceiling to $96 million through December 31, 2029. The roughly 3,921-acre Tax Incremental District No. 5 now anchors both Microsoft (which committed to drive incremental property value of at least $1.4 billion by January 1, 2028 or pay the differential) and Foxconn. American Transmission Company has roughly $2 billion of transmission projects in the queue to serve Mount Pleasant, Port Washington, and Beaver Dam data centers, and any southeastern Wisconsin industrial deal in the I-94 corridor must analyze the Fairwater anchor effect explicitly.

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• Fourth, the Wisconsin tax architecture: the Act 12 personal property tax repeal, the central manufacturing assessment, and the levy-limit regime. 2023 Wisconsin Act 12, signed June 20, 2023, repealed the business tangible personal property tax effective January 1, 2024, with the state appropriating $173.8 million in aid to hold local governments harmless. Buildings, improvements, and fixtures on leased lands, exempt lands, forest croplands, and managed forest lands that were previously assessed as personal property are now assessed as real property, materially changing the analysis for leasehold-heavy properties such as cell towers, billboards, marinas, and ground leases. Act 12 also authorized Milwaukee County to raise its sales tax to 0.9 percent and the City of Milwaukee to impose a 2 percent city sales tax, both effective January 1, 2024, the only city sales tax in Wisconsin and a direct operating-expense variable for downtown Milwaukee hospitality and retail. Wisconsin's real property tax remains structurally high, with an effective rate on owner-occupied housing around 1.32 percent, well above the national average and among the top ten states. Manufacturing real property is uniquely assessed by the Department of Revenue rather than local assessors under Wisconsin Statute 70.995, and that classification is the gate to Manufacturing and Agriculture Credit eligibility. Municipal and county levy limits tied to net new construction structurally constrain local property tax growth and elevate reliance on tax increment financing on nearly every Wisconsin development deal.

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• Fifth, America's Dairyland and the manufacturing-intensive economy. Wisconsin's $73.7 billion manufacturing sector is among the most concentrated in the country, and the dairy and food-processing axis is its defining cluster. Wisconsin produced 3.59 billion pounds of cheese in 2024 (25 percent of the U.S. total), including a record 1.02 billion pounds of specialty cheese, across 116 cheese plants and more than 1,200 licensed cheesemakers, the only U.S. jurisdiction with a Master Cheesemaker program. The state is number two in milk production behind California, with roughly 1.26 million milk cows on 5,336 dairy farms as of early 2025, down from more than 13,000 farms in 2009, a consolidation that has driven sustained capital investment in larger-scale processing capacity frequently financed through SBA 504, USDA B&I, and USDA REAP programs. Wisconsin is also the world's largest cranberry producer, harvesting 6.01 million barrels in 2024 (more than 60 percent of the U.S. supply) across more than 25,000 acres in 19 counties, the 31st consecutive year as national leader. Beyond food, the industrial base spans the Fox River Valley paper cluster (the highest concentration of paper mills in North America), capital equipment (Caterpillar and the former Bucyrus in South Milwaukee, John Deere in Horicon, Oshkosh Corporation, Mercury Marine in Fond du Lac, Harley-Davidson, Generac, Kohler, Snap-on, Briggs and Stratton), controls and automation (Rockwell Automation headquartered in Milwaukee), medical imaging (GE HealthCare in Waukesha), and the Milwaukee water technology cluster anchored by the Global Water Center.