How Many Apples for $8.6 million?

Full week's work for City Council, including Apple incentives

How Many Apples for $8.6 million?

City Council has had a full public schedule this week, with work sessions on both Tuesday and Wednesday as well as Thurs­day's regularly scheduled meeting. Wed­nes­day's session was dedicated to the ongoing Austin Energy rate case, but Tuesday's was in principle open to discussion of the entire regular agenda, with a few lagniappes: 1) the recently received Charter Revision Com­mit­tee recommendations (and potential staff direction), 2) possible action on hiring a "consumer advocate" for the AE review (the draft ordinance also adopts a schedule concluding May 24 and directs the city manager to base the new rate schedule on 2011 data), and 3) notice (by Chris Riley) of an April 2 Austin visit by UCLA economist and parking guru Donald Shoup (author of The High Cost of Free Parking) – just as Down­town parking issues are expected to return to council.

Although Thursday's agenda formally ends following Bobby Whitlock's 5:30pm guest performance and a half-dozen proclamations, it's doubtful anybody at City Hall is making early dinner plans. There's a Green Water Treatment Plant redevelopment briefing in the morning that could easily drag past Citi­zens Communication into the afternoon, a couple of returning Municipal Utility District proposals that didn't slide through on first round (expect more MUD-flinging), and 15 or so zoning cases that always threaten to derail the festivities.

Any one of these would normally be featured items, but the likely headliner this week is Item 89, the proposed economic development agreement with none other than Apple Inc., under which Apple plans to expand its North Austin campus with a new "Americas Operations Center" on West Parmer Lane, roughly doubling the company's current Austin workforce. The state has already offered $21 million from Rick Perry's Texas Enter­prise Fund; the city is being asked to contribute a 100% rebate of all city property taxes on all new construction or new machinery and equipment – estimated by city staff at $8.6 million over 14 years – in return for Apple investing $282.5 million in the project and creating 3,635 new, full-time jobs in addition to the 3,100 existing jobs. Council heard the basics last week at a specially called meeting and closely questioned staff and Apple reps about the scale of the company investment, the nature and permanence of the projected jobs (a majority expected to be local hires), and the company's willingness to work with local organizations on diversity in recruitment as well as construction job safety. (Travis County is also reported to be considering its own incentives.)

After factoring in related costs, city staff report a "net benefit" to Austin of $14.6 million over 15 years. Staff also told council last week that Austin is competing with Phoenix for the Apple facility, but in the days since, there have been reports out of Arizona that Phoenix is out of the running. Phoenix Mayor Greg Stanton told The Arizona Republic last week that "there was no Phoenix site reasonably in contention." Expect that question to arise Thursday as well as a simpler, more naive one: What does a company sitting on $100 billion in cash need with Austin's paltry $8.6 million?

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KEYWORDS FOR THIS STORY

City Council, Apple Inc.

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