Apple Inc. March 2012
Summary Background An economic development proposal is being submitted to City Council that includes a proposed economic development agreement between the City of Austin and Apple Inc. Apple Inc. – Company Overview Publicly held company, 34 years in business, headquartered in Cupertino, CA. Apple Inc. is a leading designer, manufacturer and marketer of mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. Apple Inc. currently employs 3,100 employees in Austin, TX, which is one of its two US locations. Economic Development Proposal EGRSO used the City Council approved Economic Development Matrix and WebLOCI Fiscal Impact Analysis to assess the economic development proposal. Economic Development Matrix total actual score = 100. The Economic Development Matrix score reflects the following: o Apple Inc. is proposing to build 200,000 – 1,000,000 square feet of new office space within the Desired Development Zone. o Apple Inc. will create between 650 - 3,635 new full-time jobs as a result of establishing its Americas Operations Center in Austin. These jobs will be created at the new location over the next 14 years with an average annual wage of $63,950. This will provide a broad range of job opportunities for Austin residents with an estimated 93% of the jobs hired locally. WebLOCI Fiscal Impact Analysis o Phase I & II Combined Total Direct Benefits over a 14-year period = $89.8 million Total Direct Costs over a 14-year period = $75.2 million which includes a proposed estimated economic development grant of approximately $8.6 million (based on 100% of new incremental real and personal property City taxes generated by the project after certificate of occupancy is received) Total Net Benefit ($89.8 million - $75.2 million) = $14.6 million Overall Benefits Positive financial benefit to the City according to WebLOCI
Between 650 and 3,635 jobs created in Austin Between $56.5 million and $282.5 million investment in real and personal property Employees are offered health insurance benefits, job training, career paths, and other benefits
Proposed Economic Development Agreement – Apple Inc. Locate its Americas Operations Center in Austin Phase I o $56.5 million investment in real and personal property by 12/31/15 o Create and maintain 650 new full-time jobs with an average annual wage of $63,950 Phase II o Additional $226 million investment in real and personal property by 12/31/21 o Create and maintain an additional 2,985 new full-time jobs with an average annual wage of $63,950 Locate within the Desired Development Zone Work with local organizations to expand pool of diverse candidates in recruitment efforts Abide by a supplier diversity policy Comply with the standards and principles of the City’s M/WBE Program Ordinance in the design and construction of leasehold improvements Comply with all City Code regulation, including applicable water quality regulations Contractual Obligations if approved by Council Phase I and II: Provide performance-based economic grant equal to 100% of the new incremental real and personal property City taxes generated by the project for the tax years 2015 – 2024. The proposed economic development agreement is performance-based, meaning the City is not obligated to make a grant payment for any year in which the City has determined that Apple Inc. has failed to fulfill an obligation or condition of the contract applicable to Apple Inc.