Nevada approves local deal for Apple server farm
updated 12:58 am EDT, Thu August 2, 2012
Tax breaks exchanged for $1 billion in investments
The Nevada Board of Economic Development has endorsed a state-sponsored deal brokered by the Nevada City Council to entice Apple to build a data center in Reno. The deal springs from a state law giving the economic development agency's executive director free rein to negotiate deals with qualifying companies. The approved deal grants Apple $89 million in tax breaks in exchange for an iCloud data center and support facilities. After construction, the combined facilities will employ a minimum of 35 full-time workers and up to 200 contract workers.
In exchange for the tax breaks, Apple has agreed to invest $1 billion in the region over ten years. The agreement can be continued twice more, each with a ten-year extension -- assuming the company meets the criteria for continued investment and the tax breaks. Should Apple fail to meet benchmarks such as hiring targets and investment thresholds, Apple is responsible for paying back the waived taxes.
Governor Brian Sandoval called the deal good overall, and said that Apple's commitment to the state will generate interest from other businesses eager to cash in on the tax credit and Nevada's pro-business environment. Secretary of State Ross Miller questioned if the tax breaks were in the state's best interest for the whole 30-year period. Governor Sandoval noted that data centers were specifically named in the state economic development plan as a desired industry to diversify Nevada's economy. "These are the deals we're going to have to make," he said.
Apple has a similar deal with the town of Prineville and Crook County for the placement of its Oregon data center. The deal in Oregon gives Apple a 15-year property tax exemption, with a requirement to invest $250 million in the upcoming data center and promise 35 jobs at 150 percent higher wages than the county average.
The agreement with North Carolina for the Maiden data center requires $1 billion in investments from Apple over nine years in order for to qualify for $46 million in breaks on real estate taxes and $10 million a year savings in property taxes over 30 years. The NC bill doesn't have provisions mandating local hiring, and local businesses and residents claim to see little benefit from the presence of the data center.
