Members of the Williamson County Commissioners Court on Tuesday officially signed off on a financial incentives package that helped lure Apple Inc. to expand its operations.
Cupertino, Calif.-based Apple Inc. last week announced its would invest$1 billion on a new campus in North Austin, creating up to 5,000 jobs with potential to eventually add 15,000 workers to the site. The 133-acre expansion site lies primarily in Williamson County in Robinson Ranch, prompting officials there to craft a financial incentives package to further entice the tech giant to grow its operations there.
The inducements package was hammered out in secrecy, as county officials discussed the matter during the executive session portion of public meetings to obscure machinations from public view. In the wake of the Apple announcement — which served as confirmation the financial terms of its expansion were amenable — county commissioners made quick work in approving the tax breaks deal in about 30 minutes’ time.
According to its website, the Texas Enterprise Fund awards “deal-closing” grants to companies considering a new project for which one Texas site is competing with other out-of-state sites. “The fund serves as a financial incentive for those companies whose projects would contribute significant capital investment and new employment opportunities to the state’s economy,” state officials explained on the website.
Those eligible for such grants: “Companies planning a new project including a facility opening or expansion, with significant projected job creation and capital investment, where a single site in Texas is actively competing with at least one viable out-of-state option.”
Yet lacking details of closed-door discussions that led to the incentives deal, it’s unclear if Apple Inc. had even considered another state in which to expand. The company’s strong ties to Texas would suggest otherwise: Apple Inc. is well-ensconced in Austin, where it’s had a significant presence off Parmer Lane since 1992. All told, the company employees some 7,000 workers at its area operations.
In response to a list of questions from Patch, county spokeswoman Connie Odom identified the various taxing entities within the tax-abated acreage: Williamson County ESD (Emergency Service District) #1, Williamson County, Williamson County Road & Bridge, Round Rock ISD, Austin Community College and Upper Brushy Creek WCID (Water Control and Improvement District).
Odom noted the county would reap some $8 million in property taxes from Apple, despite its trimmed bill. Patch sought to learn how much each taxing entity would have received at full taxation versus the fraction of taxes Apple would be required to pay as part of the agreement.
“The real comparison is how much each taxing entity receives under the current ag exemption (the county’s portion is approximately 59 cents per acre) versus the 65 percent of developed land under this agreement,” Odom noted. “We estimate that over the 15-year term of the contract that the county will receive nearly $8 million.”
She attached a “…rough, conservative estimate as to what the agreement equals in dollars for Apple and the county” in response to questions from Patch:
As if sensing the inevitable backlash from critics of corporate tax breaks, an Apple executive who addressed commissioners ahead of the deal’s approval suggested the financial incentives were “absolutely essential” for continuing its Texas operations. “It felt totally natural that we’d continue to grow here in the Lone Star state,” Tony Ross, senior director of Americas operations at Apple, said. “We are so excited that Williamson County will soon become an important part of our story.”
Read the full agreement between Apple Inc. and Williamson County
The corporate tax break come on the heels of the county’s adoption of a new tax rate for homeowners that was structured to raise more taxes for maintenance and operation than last year’s version. To that end, the tax rate will effectively be raised by 1.72 percent and will raise taxes for maintenance and operations on a $100,o00 home by about $4.25.
Still, Apple’s receiving the financial incentives is contingent on a set of conditions set by the county. Among those requirements is a minimum investment of $400 million at the expansion site during the life of the agreement, and a commitment to employ at least 4,000 workers by the 12th year of operations at the planned campus.
Area civic boosters praised the deal.
“On behalf of Opportunity Austin, I want to want to offer our congratulations and gratitude to everyone involved for making today a possibility,” Austin Chamber Board Chair Phil Wilson said in a prepared statement. Opportunity Austin is a five-year, regional economic development initiative aimed at fostering job-creating investment in Central Texas’ five-county region, according to chamber literature.
“It has taken months of hard work and leadership from a lot of people at Williamson County and Apple to get us here today,” Wilson continued, singling out Williamson County Judge Dan Gattis “…for his leadership and for being a driving force behind turning possibility into reality.”
Apart from the abstraction of taxation, Wilson framed the incentives deal in real-world terms: “The potential for up to 15,000 good paying jobs across all skill levels represents new opportunities for someone to get a job, advance their career, pay their bills and provide for their families. Up to $1 billion of investment is a number that speaks for itself and is an influx of capital that will provide other jobs as the new campus begins construction. Once again congratulations, and thank you to Judge Gattis, the commissioners, Apple, and all who made this possible.”