New Apple Campus "In Peril," Says Austin Chamber Official

By : Subscribe to Dave's | April 27, 2012 9:21 PM IST

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Apple's plans to build a sprawling new campus in Austin, Texas, looks to be in trouble. After several delays in approving an incentives deal by the Travis County Commissioners Court, the Cupertino, Calif.-based computer maker is getting very frustrated. Dave Porter, the senior VP for economic development at the Greater Austin Chamber of Commerce, said Apple's plans are currently up in the air as the county continues to deliberate on the conditions of the incentives deal.

"This deal is not done," Porter said. "It remains in peril. And Apple is frustrated."

On April 17, Travis County approved an initial incentives package offer from the state and local government, which was estimated between $35 million and $36 million spread over 10 to 15 years. The total offer was comprised of $21 million from the Texas Enterprise Fund, $8.6 million from the city of Austin, and between $5.4 million and $6.4 million from Travis County.

Even though approval was granted on April 17, the Commissioners Court brought up the plan during its last meeting on Tuesday, and decided to put off a final vote on the incentives contract. Specifically, former Travis County judge Bill Aleshire and Austin-area developer Ed Wendler were the ones to pick through Travis County's final draft of its contract with Apple, pointing out the parts of the offer they believed would let Apple fall short of its requirements by the Commissioners Court.

Aleshire wanted a chance to address Porter's comments that "Apple is frustrated."

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"I'm not sorry that Apple is frustrated," Aleshire said. "That's a sorry contract. [Apple] had it rigged so they could not comply with the contract yet end up with county staff basically renegotiating the terms taht they would have to comply with. I just throught that was a major flaw. It showed up in several ways in several places."

Porter hopes the Commissioners Court and Apple can reach a deal by the first week of May.

"We were disappointed (the deal) wasn't finalized this past Tuesday, but we were hopeful this next Tuesday that Apple and the county can complete the negotiation process and have that behind us," Porter said. "We remain hopeful that will take place and there will be a positive vote on Tuesday."

Apple has had operations in Texas for about 20 years, but an expansion in Austin would double the size of its support team there and create more than 3,600 new jobs in the city -- many of them for entry-level help desk employees. Mayor Lee Leffingwell, echoing other Austin city officials' sentiments, recognizes Apple's wishes as a great opportunity to create good jobs that pay, especially for all of the college students, mainly from nearby University of Texas. 

Apple would also invest more than $304 million into Austin over the next decade. It's all part of Apple's plans to build a major center for its North and South American business operations.

"Apple is known for its bold innovation and game-changing designs, and the expansion of their Austin facility adds to the growing list of visionary high-tech companies that have found that 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" said Gov. Rick Perry. "Investments like this further Texas' potential to become the nation's next high-tech hub."

Austin is already home to some of Apple's competitors, including ARM, Intel and Samsung, which currently owns a sprawling 1.6 million square-foot factory in Austin -- the size of nine football fields -- that took a whopping $3.6 billion to build. Austin's Chamber of Commerce says Samsung's total investment is actually much higher than that, falling short of just about $9 billion. Samsung's factory, which actually builds several components for Apple like its A4 and A5 processors, is the largest foreign investment in the state of Texas.

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