Apple confirms Reno, Nevada as the site of its next U.S. data center pending tax break deals

“Apple today confirmed it is considering Reno as the site of its next data center,” John Paczkowski reports for AllThingsD.

““We hope to build Apple’s next data center in Reno to support Apple’s iTunes Store, App Store and incredibly popular iCloud services,” Apple spokeswoman Kristin Huguet told AllThingsD,” Paczkowski reports. “‘If approved, this project would expand our presence in Nevada and create hundreds of construction jobs over the next year, plus permanent jobs at the data center which will add to our existing total of nearly 400 employees in the state.'”

Paczkowski reports, “If the deal is approved, Apple could break ground on a new data center as soon as August. Once it’s finished and online, the company will have major data facilities in Newark, Calif.; Maiden, N.C., and soon Prineville, Ore., as well.”

Read more in the full article here.

Brian Duggan reports for The Reno Gazette Journal, “Apple is planning on opening a data center to house its cloud computing service east of Sparks as well as a business and purchasing center in downtown Reno, part of a $1 billion investment the company plans to spend in Northern Nevada over the next 10 years.”

“The deal includes $89 million tax abatements from the city, county and state over the next decade, effectively reducing the company’s tax burden by 79 percent, according to an analysis of the project by Phoenix-based Applied Economics,” Duggan reports. “About 82 percent of those tax breaks will come from local governments and the rest from the state. Those tax breaks include a reduction on 85 percent of the personal property tax for 10 to 30 years. If all local governments approve the deal today and tomorrow — including the Washoe County School District and the Reno City Council — Apple’s effective sales tax rate will be less than 1 percent. In all, local and state governments would collect about $16 million in tax revenue from Apple over the next 10 years.”

Duggan reports, “Meanwhile, Applied Economics estimated the overall economic impact of the project to be $343 million, which includes up to 41 full-time jobs at the data center and 200 contract employees. About 580 construction jobs are planned for the project — an estimated $103 million economic impact on the region. Greg Ferraro, who runs a Reno public relations firm, told county commissioners on Tuesday: ‘This is the most significant economic news we’ve had in our region in over 15 years.'”

“The Reno City Council will consider its portion of tax abatements on Wednesday, pledging 75 percent of its share of sales taxes to the company,” Duggan reports. “The downtown business park and purchasing center that Apple plans to build in Reno will be located in the so-called Tessera District, which has the ability to issue sales tax-backed STAR bonds. ‘Certainly (Apple) is a seed to the Tessera project itself and a seed maybe for a larger Apple presence,’ said Steve Polikalas, one of the principle developers behind the project. ‘But even if it facilitates the Tessera project, which it will, it should we expect, it’s just absolutely exciting and transformative.'”

“Today, the Washoe County Board of Commissioners approved its share of abatements for Apple’s planned data center in the Reno Technology Park, located east of Sparks along Interstate 80. The Washoe County School District will vote on the item this evening and the Reno City Council tomorrow,” Duggan reports. “The next step is for state economic development officials to screen those tax breaks, a process that is expected to take about a month with construction starting as early as August.”

Much more in the full article here.

MacDailyNews Take: Voting for tax abatement to entice Apple is a no-brainer. Anyone who doesn’t is either playing politics or needs to take/retake Economics 101. Reno voters should keep a close eye on this and remember which of their representatives, if any, vote against enticing Apple to the area and punish them accordingly at the ballot box.

Related articles:
Travis County approves tax incentives for Apple’s Austin campus expansion – May 2, 2012
Apple gets 15-year property tax exemption for $250 million data center in Prineville, Oregon – April 20, 2012
Apple confirms plans for Prineville, Oregon data center; deal signed after state senate passed tax legislation – February 22, 2012
Apple lobbies Obama for tax holiday, wants to bring overseas bounty home – August 24, 2011
U.S Senate Democrat Schumer allies with Apple, other multinationals on repatriation tax talks – June 21, 2011
Governor signs tax break, Apple confirms it will build NC data center, investing at least $1 billion – June 3, 2009
North Carolina Senate approves tax law change for Apple Inc. in 40-8 vote – June 2, 2009
North Carolina lawmakers OK tax incentives for Apple Inc. – May 27, 2009

32 Comments

  1. reno is a beautiful place. no kidding they need the jobs there, just like other places in the country. maybe the union picketers can set up camp early so they can get stoned by the people applying for jobs.

    transformative is a pretty good word to use. this is not the traditional NV or reno industry.

    waiting to jump on the comments about apple avoiding taxes.

  2. The tax thing is a two edged sword.

    Nobody wants to tax business so heavily that it becomes a burden upon the business, yet they benefit from community amenities and infrastructure and should shoulder a fair part of the burden.

    Big business has gotten addicted to local and state governments giving away the store to lure investment to the point that many communities lack the revenue to maintain the very things that make the place livable and desirable.

        1. No you would be brainwashed.

          Redistribution of wealth has done nothing to end poverty and ruined the US. Period.

          Commie!

          Schools in a totally different way.

          Fire Departments, police, are basics. That would be it.

          Ban the unions throughout government.

        1. Why do you believe it’s about not paying taxes? It’s about the situation reaching the point, literally, where we’re touching on the 50% tax bracket again. Do you believe it is moral to tell someone that the state is owed half their income? Do you really believe that?

          When all is said and done I pay the city, state, and Federal govt. 40% of my income.

          That means that 40% of my work life is spent working for the government. Is that acceptable to you? Should I work 60% of my life? 90%?

          When 50% of the people in this country pay no taxes at all, and 10% pay 70% of all Federal taxes, I think people are being plenty Christ like.

          Your pathetic Bible approved of slavery, even sex slavery, but even it said a slave can go free at a certain point. Well the men, not the women.

          Jesus my ass.

        2. And another thing. I’m happy to pay taxes. I’m not happy to feed an out of control deficit. I not happy to pay for a 17 billion dollar a month interest payment on the debt. I’m not happy to pay exorbitant salaries and retirement plans for government workers. They are supposed to work for me, not the other way around. I’m not happy to pay for waste, fraud, abuse, and Michelle Obama trips. No, she is not the first to take advantage, but the most rhetorically hypocritical I think I’ve ever seen.

          I’m happy to pay taxes, but not happy to pay $150,000 an hour for Air Force One to fly the President to fund raisers to pick up $38,000 per plate gifts from actors and others for loser Presidents.

          I’m even happy to pay for freaking socialist medical care. I AM NOT HAPPY TO PAY FOR 2000 PAGES OF CONFUSING AND ABSURD LEGISLATION THAT NO ONE HAS READ, CAN UNDERSTAND, OR EVEN ASKED FOR.

          I’m not happy to pay for gun smuggling scams and attempts to rob me of my 2nd amendment rights.

          Infrastructure. HA! I don’t see anyone fixing a goddamn pot hole around here. They’re too busy painting TOTALLY EMPTY BIKE LANES all over the freaking place. No, I’m not happy to pay for blatant stupidity.

      1. Why is taxation being equated to “stealing?” The time was when patriotic Americans looked down on fellow citizens who attempted to shirk their duty to country. Are you really so dense that you can only parrot what you hear without considering what it actually means? If you despise taxation so much, then stop accepting government benefits including public parks, roads, bridges, dams, libraries, museums, etc. While you are at it, go fight in some wars because the U.S. Military does not qualify as “infrastructure.”

        The day that your preferred political party actually practices fiscal conservatism rather than just talking about it is the day that you can legitimately talk about cutting taxes. But tax cut-and-spend has brought this country to the brink in just a decade, promising services for free because the tax cuts would stimulate growth so much that tax revenues would magically increase even though rates decreased (for some). It did not work. It can only work if the tax rate is currently above the ideal tax rate that maximizes revenue, and I am quite certain that you have absolutely no idea what the ideal tax rate is…

        My personal finances prove that I am a true fiscal conservative. No major political party can legitimately make the same claim.

        1. KingMel, don’t waste your time talking to those who can’t hear, can’t think, and don’t care — they believe ignorance is their right. The Tea Party “conservatives” long ago announced they put a bankrupt ideology over the welfare of the country; they purposely reject “E Pluribus Unum.” They are proud to be anti-intellect, ignorant of science, and mindlessly dogmatic in the face of facts. Washington, Jefferson, and Franklin all warned us of the dangers this group brings. Fortunately, they are likely to quickly self-combust. Endeavor to persevere.

          1. Socialism doesn’t work. Here’s the proof:

            Study: Obama Increased Welfare Spending 41%; Poverty Rate Unchanged from LBJ: More Than Half a Trillion Dollars Spent on Welfare – But Poverty Levels Unaffected

            Since President Obama took office [in January 2009], federal welfare spending has increased by 41 percent, more than $193 billion per year. Federal welfare spending in fiscal year 2011 totaled $668 billion, spread out over 126 programs, while the poverty rate that remains high at 15.1 percent, roughly where it was in 1965, when President Johnson declared a federal War on Poverty.

            The study faults the way poverty programs are designed, saying that the increase in spending and largely unchanged poverty rate showed that the issue is not a matter of money, but a matter of what the programs aim to achieve.

            “The vast majority of current programs are focused on making poverty more comfortable – giv­ing poor people more food, better shelter, health care, and so forth – rather than giving people the tools that will help them escape poverty.”

            Instead, the study recommends refocusing anti-poverty efforts on keeping people in school, discouraging out-of-wedlock births, and encouraging people to get a job – even if that job is a low-wage one.

            “It would make sense therefore to shift our anti-poverty efforts from government programs that simply provide money or goods and services to those who are living in poverty to efforts to create the condi­tions and incentives that will make it eas­ier for people to escape poverty.

            Now, I care very much about really helping the poor, unlike some Dems and some Canadians who seem to think that “programs” that accomplish nothing but keep the poor around forever are some sort of “solution.” Generation after generation. Guaranteed votes for their Democrat masters, of course. Some solution that is.

            I keep waiting for the majority of U.S. African Americans to wake up. Slavery by another name (government dependency) is still slavery.

            The more people doing well on their own, the better.

            I’d be very happy to put my taxes to work for real progress for a change, not just keeping the disadvantaged and their offspring treading water and checking the mailbox for the subsistence living check/foodstamps forever.

            That’s right, I want hope and change and progress, but real hope and change and progress, not an empty campaign slogan devised for an empty suit spouting a tired ideology that’s a proven failure everywhere it’s been tried.

            1. Fact is, socialism (as you define it, which is NOT real socialism) does work. The European experience proves it. Poverty is at a rate there that is lightyears lower than the US rate, and health care is easier to obtain and cheaper overall.

              The reason such programs have not worked as well here is due to conservative intransigence towards spending real money to actually, you know, make it work. They ALWAYS underfund these programs, then bitch when they fail to show full success. Europeans have proved such things to work very well, IF funded properly.

              How can we pull people out of poverty when Conservatives have not only refused to fund education in this country, but have fought tooth and nail to DEfund it at every opportunity?

              You can’t cut spending at all governmental levels and expect government programs to work. Which, of course, has been the Conservative program – defund everything they don’t like to the point where they fail, then point to that failure as proof of the necessity to kill it outright.

              Face it, Obama is NOT a socialist. Europeans are laughing at American Conservatives over this – you guys wouldn’t know a real Socialist if one bit you on the ass. Even that health care program you derisively call Obamacare is a duplicate of a REPUBLICAN program enacted in Massachusetts by Mitt Romney – a fact he has tried to run away from for months.

      2. Meg

        Well if the Condumbs in the Congress would pass the Transportation act we could build infastructure and put people to work. But they have refused to pass it. So take your mesage to them.

    1. If the communities don’t want the jobs and the investments, they’re free to either reject the proposal or make a counteroffer. The REAL problem is that government has become addicted to a seemingly endless supply of money, and have thus become irresponsible in their spending.

      1. And you believe that only the government has that problem?

        The REAL problem is that U.S. citizens have accepted benefits in excess of the taxes that they are willing to pay. But they re-elect the bozo that borrows money to push the pain down the road while voting out the responsible legislators who are willing to make the hard decisions and take the difficult stands rather than pandering to various special interests.

        There has been lots of talk about cutting spending. The main problem is that most people want to cut spending on *other* people while protecting their own interests. That is true at the local, state, and federal levels of government. And constituents regularly reward the legislators who deliver the money to their districts – witness Byrd’s long reign in WVa.

        Quit blaming the “government” and start looking in the mirror. Because the problem starts with each and every U.S. citizen who fails to take action against the insanity of our current political system. Support candidates who will actually *do* something constructive.

    1. Don’t you see the personal and sales taxes for the project and the workers far outweigh the tax credits they will not get?

      Why let them go to some other location and lose all that new tax money?

  3. Giving away services doesn’t work in the long run ask Google, Pandora, Facebook, or Amazon in the end you have to pay, Jackass Mario, ask yourself why after about sixty years of building sport buildings none of the local governments are falling for the sport teams con games anymore to build them, in about 10 years most state and local governments won’t going for this latest con by big business. Tax payers, and local business are going to pay in the short term however.

  4. I remember when Intel and other chip makers got huge tax breaks to locate in Oregon, and then brought in most of the high paying jobs from out of state, and the influx of families with kids required local citizens to vote for and major school bond to build new schools, pay for new streets and sewer to all the new subdivisions, and other increased services… all stuff which I suppose was a fair trade-off where the average guy pays much more to make up for all the increased costs and lack of tax collections from multi-billion $$ market cap corporations… at least Intel stuck around, but many of the other companies, many of them Japanese or Taiwanese, just closed up shop during the first dot com bust… but the local taxpayers are still paying off the bill…
    …then there was the infamous South Texas Nuclear project that Texas ratepayers are still paying for 30 years later, with not a single watt of electricity in return… but Kellogg Brown and Root are still in business… all this is some form of redistribution of wealth, but it’s from the average citizen to the big boys, not the other way around…
    …I’m not expressing an opinion, only remembering how some of these huge taxpayer subsidized projects have turned out, not all, but definitely some. I do think Apple is a well run company that won’t just skip town, and they do have a long-term plan, but these data centers won’t really employ very many people in the end, all the economic boom will just be during the construction phase, then mostly minimal economic impact from jobs created. But, better than nothing, I guess…

  5. Back to the reality of a Reno-based operation – east of Reno out toward Lockwood and Fernley there are acres and acres just waiting for someone like Apple to build. Trouble is, it’s so hot that the a/c bill will be a huge killer. The upside is that I-80 is right there as well as the WP railroad. Easy to transport material there.

    And for the musically-minded, Sparks is just Ottorino, as Leland Stanford told composer Respighi over a hundred years ago.

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