The Travis County Commissioners Court held a public hearing April 3 on a proposed economic development agreement with Apple Inc. The county is considering offering Apple up to $7 million in tax rebates over ten years if the Cupertino, Calif.–based company meets certain job creation and retention benchmarks, among other criteria.
Apple plans to add 3,635 employees and build a $243 million, 1 million-square-foot Northwest Austin operations center in 2 phases. Gary Farmer, vice chairman of economic development for the Austin Chamber of Commerce, said the City of Austin could would see a $14.6 million net benefit to the city—"a real return." He added that Apple will generate tax revenue for Central Health, Austin Community College and the Round Rock Independent School District.
While many speakers at the hearing supported Apple's expansion, they wanted the company to be held accountable if it did not reach predetermined goals, such as the amount of workers hired.
Some speakers described the incentives as "corporate welfare" and lamented offering benefits to attract one of the world's most successful companies.
Following the hearing, the Commissioners Court planned to discuss the issue in executive session and have staff continue negotiations with Apple.
Local economic benefits
County staff said average salaries for the new positions will range from $54,000 to $73,500 and Pflugerville City Councilman Victor Gonzales said he estimated the deal would create $2 billion in payroll over 10 years.
"A growing number of individuals are out of the work force," said Alan Miller, executive director of Workforce Solutions–Capital Area. "I hope we can marry these new jobs with the increasing number of people who find themselves unemployed."
Gonzales said workers may not live near the proposed facility on Parmer Lane and Delcour Drive and encouraged commissioners to ask Apple to consider locating the new campus on the east side of I-35.
In a March 29 statement, Eckhardt said she asked Apple to guarantee that the 3,600 new jobs would be predominately filled by Travis County residents; that the company reach out to, hire and train economically disadvantaged residents; and that it help pay for a stop on the Lone Star Rail line that would service the new campus.
In reference to whom Apple would hire for its new positions, Eckhardt said the county did not receive a demographic breakdown of Apple's current 3,100 employees.
Commissioner Ron Davis said Precinct 1 had the highest poverty level and unemployment in Travis County. He said he wanted to make sure all eligible people were considered for job opportunities and did not want anyone to be left behind.
Central Health board member Clarke Heidrick said he did not think Apple employees would qualify to use the health care district's services, but they would help pay for the services through their taxes.
"I hope we do not use Apple's success against it," the Austin Chamber of Commerce board chairman said. "We want to recruit the most successful companies we can find. Those are the companies that make the capital investments and have the opportunities to be good corporate citizens."
Heidrick also noted that Apple has a policy in which it matches employees' charitable donations up to $10,000.
Jimmy Flannigan, vice president of the Austin Gay and Lesbian Chamber of Commerce, praised Apple's corporate culture as being a "shining star" for gay, lesbian and transgender acceptance. He reiterated county staff's statement that no county money would going to Apple; Apple would receive its own tax money back and grow the local economy.
Resident Laura Pressley told the court that if it was serious about Apple hiring local and economically disadvantaged residents, it should make it a requirement and not a preference in the contract. She also suggested giving residents a 2 percent return on investment tax rebate if the county was confident about the deal. Commissioner Sarah Eckhardt said the county could give rebates to corporations but not to residents.
Resident Ed Wendler, a self-described "Apple nut" who has "already paid for half of [Apple's] expansion through iTunes purchases alone," advised the court not to act like swooning consumers when dealing with the influential computer company.
He referenced the real estate joke, "You set the price, I'll set the terms," to illustrate how the terms of the Apple deal may erode the benefits. Wendler said people were too focused on the end numbers and not as focused on the project's first phase.
Wendler also said if Apple gets a tax break for meeting its first year hiring goals but does not in year two, it still gets to keep that first year's tax breaks. Wendler advocated a clawback provision that would allow the county to take back tax rebates.
Debbie Russell, Del Valle Independent School District board member, urged the court to take its time in working with Apple despite the pressures that come with such high profile deals.
Correction: An earlier version of this article incorrectly stated that Apple owns the 36.1-acre plot of land adjacent to its exisiting campus at Riata Vista Circle that the company is proposing to develop.