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Apple to Develop $1.4 Billion Data Center in Iowa

Planned $208M in Tax Breaks and Other Incentives Draws Criticism as Apple Joins Facebook, Microsoft and Google in Locating Data Center Projects in Hawkeye State
August 28, 2017
In the latest move by a Silicon Valley tech giant to establish a presence in the rural state of Iowa, Apple, Inc. has announced plans to build a $1.38 billion, 400,000-square-foot data center in the Des Moines suburb of Waukee.

Cupertino, CA-based Apple plans to purchase 2,000 acres of land in Waukee, with the first phase of the project to include two proposed data center facilities, which like all Apple data centers will run entirely on renewable energy. The center will provide cloud-based support for Apple's App Store, Siri and other services.

Iowa state, regional and local officials have been working with Apple for the past 20 months to find a suitable location for the facilities, with the company opting for a site on the west side of Waukee to build the first two buildings, according to a state released by the office of Iowa Gov. Kim Reynolds. Once Apple's project team narrowed its Iowa search to one site, the Iowa Economic Development Authority (IEDA) worked with the Greater Des Moines Partnership and Waukee city leaders to develop a government incentive package.

Apple, which will also contribute up to $100 million to a newly created public improvement fund dedicated to Waukee community development and infrastructure, said the data center project will create "at least 50 jobs at a qualifying wage of at least $29.12 per hour."

Waukee voted to support the project Thursday morning with a local tax abatement and infrastructure improvements, followed by approval of the IEDA board of tax incentives available through the state's High Quality Jobs program. The combination of state and local sales and property tax breaks and refunds totaling nearly $210 million is not being received with universal acclaim by political leaders and community groups in Iowa, who claim that the agreement is in effect a giveaway of public funds to one of the world's largest and wealthiest companies.

"Take it from me: this is a better deal for Apple than it is for Iowa's taxpayer's," tweeted Fred Hubbell, a Des Moines Democrat and former CEO of Equitable Life Insurance Co. who officially entered the race for Iowa governor last month. announced

According to the statement released by Gov. Reynolds, however, data center projects have an economic impact "well beyond the permanent jobs created and the initial capital investment made." Reynolds' office cited a recent study released by the U.S. Chamber of Commerce’s Technology Engagement Center estimating that a typical data center development and construction project employs 1,688 local workers, provides $77.7 million in wages, produces $243.5 million in output throughout the local economy’s supply chain and generates $9.9 million in revenue for state and local governments.

Microsoft, Google and Facebook have already built data centers in Iowa over the last several years, capitalizes on the abundance of wind and other renewable energy in the state. Apple expects to begin construction next year and bring the data center online in 2020.

Every year after a data center project is operational, it supports 157 local jobs paying $7.8 million in wages, injects $32.5 million into the local economy and generates $1.1 million in revenue to state and local governments.

Iowa's relative safety from hurricanes, earthquakes and rolling blackouts, coupled with affordable electric rates and high percentage of electricity generated by wind, make the state well-positioned to continue attracting data center investments in the future, state and local officials said.
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