If you were wondering why Apple chose Mesa, Arizona, as the location of its latest manufacturing plant in the U.S., a story today from Bloomberg explains that Apple, not shy about going after tax breaks, has taken advantage of many perks put in place by the suburb’s mayor:
So last year, when Apple was searching for a place to house a factory that makes a stronger glass for its gadgets, Mesa pulled out the stops. The city, which was ravaged by the 2007 housing crash, offered tax breaks, built power lines, fast-tracked building permits and got the state to declare a vacant 1.3 million-square-foot facility that Apple was exploring a foreign trade zone. With unemployment high, such are the lengths that towns are willing to go to to lure the world’s most valuable company.“Any time you have a company like Apple come in and invest in your area, especially with this type of operation, it’s significant,” said Smith, who triumphed late last year when Apple spent $114 million to buy the factory. The mayor celebrated by placing bowls of green and red apples in City Hall.
Smith added that original preparations were done before the city even knew it was Apple, but later Apple requested additional perks before moving in and even got construction permits expedited. Among the other advantages of choosing Mesa for Apple was a $10 million building grant from the Arizona Commerce Authority and an agreement with the city’s power company to build solar and geothermal installations and a new power substation for the plant:
“It’s not like getting an extension cord and plugging it in,” Smith said. “These deals live and die many times before they come together.”
The end result for Mesa will be around 700 full-time jobs and 1,300 construction jobs, a small dent in the roughly 300,000 jobs that mayor Smith estimates the area has lost since 2007.
Earlier this month we reported that Apple’s deal with GT Advanced for sapphire manufacturing at the new Mesa plant could result in displays for future iPhones and not just the smaller components the material is currently being used for. We reported that Apple could use the plant to build more than 100 million iPhone displays per year, a number cited in Bloomberg’s report today by analyst Eric Virey.
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It is still job creation and better economy. Although apple has money to spare, doesn’t mean they need to be taxed everywhere. It is investment. It is help for everyone and the community. I wish more mayors understood that raising taxes just downward spirals the community.
It may be job creation but elected officials need to consider the bigger picture.
It’s not unusual for all private businesses to get whatever government subsidies they can. These companies pit one town against each other.
And every tax break the companies get means the tax burden shifts or tax base shrinks, which can mean less funding for services.
Areas that are economically depressed are really at a disadvantage, and political leaders use this so called job creation to score political points, but it’s not always so rosy.
Look at what’s happening in San Francisco- lots of tech jobs but the people with strong ties to the area can’t afford to live there. That really destroys the family structure.
Will the income from newly created jobs be worth it? That’s something that always remains to be seen.
Or check out what Cupertino has given Apple. Have they yet figured out a way to mitigate traffic around the new campus?
It’s important for the media to get the whole picture, so voters and taxpayers can make informed choices.
Yep.