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Economic development head Melissa Hughes looks to take agency in new direction
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Economic development head Melissa Hughes looks to take agency in new direction

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The Wisconsin Economic Development Corp.’s fourth CEO, Melissa “Missy” Hughes, said Monday her first four months have been spent developing a new direction for the state’s top economic development agency.

The shift in direction, which Hughes and Democratic Gov. Tony Evers have said entails a greater focus on small businesses and rural communities, rather than on controversial deals like the one for the massive Foxconn project, is reflective of Hughes as a departure from previous leaders of the embattled WEDC since its 2011 creation.

In a Monday interview with the Wisconsin State Journal, Hughes gave credit to her predecessor Mark Hogan, who she said established many of the department’s processes and procedures, many of which were in response to annual audits from the nonpartisan Legislative Audit Bureau.

“He did a terrific job setting the stage for me,” Hughes said, adding that part of that entailed assuring the public that the department, which came under criticism for being influenced by political considerations during former Gov. Scott Walker’s administration, is operating independently.

“It’s really critical that decisions that are made through WEDC are not political,” Hughes said. “I’ve actually learned that really well from the staff — that we’re not making political decisions, that we’re very cautious to be making the best decisions for Wisconsin and to avoid worrying about how something is going to look, but rather making the right decision to start with.”

WEDC’s first CEO, Paul Jadin, who left the job amid reports of problems at the agency and behind-the-scenes disagreements with Walker, and at the time served as chairman of the agency’s board of directors, said he knows firsthand about political influence in the department’s early years.

“I think WEDC was intended to be apolitical, and I think it’s slowly but surely getting there, and I think Gov. Evers can be a major factor in realizing its objectives,” Jadin, who became head of Dane County’s regional economic development agency in 2012, said Monday.

Jadin said he has had more conversations with Hughes in her first four months than he can recall with Hogan in all of the former secretary’s four years. He added it’s apparent the organization has shifted toward entrepreneurial innovation and start-up projects and “away from the big deals, the Foxconn-type deals.”

Jadin’s replacement, Marshfield Clinic’s retired executive director Reed Hall, departed the agency in 2015 amid reports of mishandled loans and discontent among employees. He was replaced by retired banking executive Hogan, one of Walker’s longtime political supporters, who resigned last September.

A 2018 law passed by Republicans and signed by Walker prevented Evers from making a WEDC appointment until September. The full Senate has not yet voted on Hughes’ appointment.

“Her confirmation is still working its way through the committee process,” Senate Majority Leader Scott Fitzgerald, R-Juneau, said in an email. “We’re continuing to have discussions as a caucus as to who to put on the floor this spring.”

Hughes joined La Farge-based Organic Valley in 2003 as chief mission officer and general counsel. The cooperative of organic livestock, dairy and vegetable farmers was created in 1988. It includes more than 2,000 family farms and has annual sales exceeding $1 billion.

Hughes said she plans to use that experience to help launch Evers’ recently announced Office of Rural Prosperity within WEDC, which could open up access to financial incentives for the state’s small businesses and rural communities.

“It’s definitely never meant to be us versus them, rural versus urban,” Hughes said. “If any part of the state is weak, so goes the rest of the state.”

Evers also has called on WEDC to create a committee on entrepreneurship and innovation.

“Successful economic development isn’t just about job numbers,” Evers spokeswoman Melissa Baldauff said in an email. “That was definitely something missing from WEDC and we are excited to see even more of a focus on small-business owners and entrepreneurs.”

Foxconn update

Hughes said communication continues with Foxconn Technology Group regarding the state’s contract with the company for a $10 billion, 20-million-square-foot campus in southeast Wisconsin and 13,000 jobs over 15 years.

However, in December, Evers’ administration told the Taiwan-based electronics manufacturer the company was no longer eligible for the $3 billion in state tax credits pledged to the company in the 2017 agreement championed by Walker.

Officials have argued that multiple updates to the company’s plans — including downsizing from a manufacturing facility making TV screens to a facility that would manufacture small screens for tablets or phones — have resulted in a vastly different project.

“The current project, the current construction that’s happening at Foxconn is different than what the contract was negotiated for and entered into,” Hughes said. “As Foxconn’s business plans are evolving … we’re standing ready to work with them on an amendment to their process so that the contract and the project are aligned.”

Hughes declined to comment in any more detail on the status of the project.

State officials have been vague on specifics when it comes to what a new contract could look like, but Evers said it’s possible the amount in tax incentives could be amended. Officials have said they cannot unilaterally change the contract without Foxconn’s participation.

In a Monday statement, the company said discussions with the state are ongoing.

“Foxconn will continue to comply with the reporting requirements as prescribed in the agreement for employees hired and capital expenditures during the 2019 reporting year,” the company said.

Foxconn is required to provide WEDC with an update on its progress and how many jobs have been created by April 1 to determine whether the company qualifies for state tax credits.

“I’d just as soon not guess about where that’s going to be and we’ll hear on April 1 where that’s at, if not before,” Hughes said.

The company, which fell 82 jobs short of the minimum required to claim state tax credits in 2018, has said it intends to have its manufacturing facility up and running by the end of 2020.

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