Apple May Have 35 Million Reasons to Branch Out in Austin

With a reported $100 billion cash on hand, Apple Inc. has enough money to bail out the state of California or buy up nearly all of its competitors in phone sales. But the tech giant is poised to receive up to $35.5 million in various state and local incentives if it expands its operations in Austin.

The state plans to invest $21 million from its Texas Enterprise Fund over 10 years as Apple meets certain requirements. An additional $8.5 million in tax abatements could come from the city of Austin, and Travis County could provide $6 million in real estate abatements.

Critics of the tax deal with Apple question why the uber-rich company should get breaks to move its operations to Austin, particularly when it seems there was little competition from other locations. 

Travis County Commissioner Sarah Eckhardt said Apple would probably move to Austin without the tax abatements and fee waivers if that was the best decision for the company. Apple officials could not be reached for comment.

The Austin City Council will hold a public hearing on the issue today and is expected to vote on the plan. If the city of Austin and the Travis County commissioners don’t agree to their part of the tax breaks deal, the whole thing could evaporate. 

Matt Parkerson, a spokesman for councilman Chris Riley, said the only public concerns he has heard came from a group worried about working conditions in Apple facilities. Other council members contacted for this story did not return phone calls. 

In a recent news release announcing the Enterprise Fund award to Apple, Gov. Rick Perry said the California-based company’s expansion in Austin would more than double its Texas workforce. 

“Texas’ economic climate is a perfect fit for their future, thanks to our low taxes, reasonable and predictable regulations, fair legal system and skilled workforce,” Perry said. 

For a company to be eligible for Enterprise Fund money, there must be competition with another state for the project. In the application paperwork for the project, Apple said Phoenix was in competition with Austin for the new site.

For 20 years, Apple has had an operation in Austin, and it plans to build its new facility across the street from its current campus in Northwest Austin. A spokesman for Gov. Jan Brewer of Arizona said in a March 15 news report that the state was unsurprised that Apple would move to Austin because of the existing site. 

Still, Perry spokeswoman Lucy Nashed said that the governor was convinced that the Enterprise Fund incentives package was the deciding factor between Phoenix and Austin.

An Austin report recently estimated that the expansion would bring 650 new jobs by 2015, with another 2,985 by 2021 — all new and full time with an average wage higher than the Travis County average, as stipulated in the eligibility requirements for Enterprise Fund benefits.

Travis County Judge Samuel Biscoe signaled that the county would wait until after the City Council votes on the project Thursday before the Commissioners Court takes up its incentives package at its meeting Tuesday.

Commissioner Eckhardt said that in a meeting with Apple officials, she asked them to put in a provision to hire economically disadvantaged individuals and hire as much from Travis County and the city of Austin as possible. 

“When you rebate the taxes for the largest corporate taxpayer in the area over a period of 10 years, someone is going to have to pick up the tab,” she said.