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Apple Inc. will collect almost $20 million in investment tax credits and $188.2 million in property tax abatements from Iowa as part of its plan to develop 2,000 acres for a data center in Waukee, Iowa, officials announced Aug. 24.
The Iowa Economic Development Authority (IEDA) will provide $19.6 million in credits over five years, calculated against Apple’s projected $1.375 billion investment and projected creation of 50 full-time jobs. An IEDA project report confirmed the City of Waukee will provide a property tax abatement of 71 percent over 20 years, valued at $188.2 million. The report pegged total state and local tax benefits available to Apple at $207.9 million.
IEDA spokeswoman Tina Hoffman told Bloomberg BNA the authority’s board approved the incentive package Aug. 24. Later in the day, Apple CEO Tim Cook announced the data center initiative together with Iowa Gov. Kim Reynolds (R).
“Our new data center in Iowa will help serve millions of people across North America who use Siri, iMessage, Apple Music and other Apple services—all powered by renewable energy,” Cook said in a statement. “Apple is responsible for 2 million jobs in all 50 states and we’re proud today’s investment will add to the more than 10,000 jobs we already support across Iowa.”
Cupertino, Calif.-based Apple, known for its computers, iPhones, iPads and other electronic devices, is one of a growing group of tech companies using Iowa as a base for vast data centers. Google (Alphabet Inc.), Facebook Inc. and Microsoft Corp. have all made hefty investments in data facilities in the Hawkeye state.
Reynolds said Iowa is happy to provide incentives to another well-known player in the tech sector.
“This announcement further solidifies Iowa as a hub where innovation and technology flourish and demonstrates this is a place where world-class companies can thrive,” she said in a statement.
Apple said it plans to purchase 2,000 acres of land in Waukee, west of Des Moines, and construct two data facilities covering 400,000 square feet. The first building is scheduled for completion in April 2020, and the second building will be completed in April 2021. Both facilities will operate on 100 percent renewable energy.
The IEDA report shows Apple will spend $110 million for land acquisition and site preparation, $620 million for construction, $45 million for equipment and fixtures, and $600 million for computer hardware.
Hoffman said the state is providing benefits under its High Quality Jobs Program. The program provides companies seeking to locate or expand in Iowa with a suite of tax credits and direct financial assistance to offset development costs. Packages frequently include loans, tax credits, exemptions, and refunds.
Hoffman said businesses must meet certain job-creation and investment targets to win tax benefits from IEDA. The jobs must provide wages and benefits higher than local standards. The watershed wage for the West Des Moines/Waukee region is currently pegged at $24.27 per hour.
“The High Quality Jobs Program is driven by the number of jobs created at the qualifying wage for the area, which is over 120 percent of what is the laborshed wage in the area, $29.12 per hour, and their overall capital investment,” Hoffman said. “So the jobs and the capital investment are what drive the incentive program.”
According to the IEDA report, Apple’s investment tax credit will be amortized over five years beginning with Fiscal Year 2017. If all terms of Apple’s agreement with the state are met, the tech giant would be able to claim credits valued at $3.93 million per year through Fiscal Year 2021.
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