Apple to receive $213M in tax breaks for 50-job data center

Apple is receiving more than $213 million in state and local tax incentives to build a proposed data center that will employ 50, the fourth-major tech company to build these high-tech warehouses in the state.

Documents released Thursday morning by the Iowa Economic Development Authority show Apple plans to spend $1.375 billion to build two "state-of-the-art" data centers on 2,000 acres in Waukee, Iowa. The company plans to power the buildings with 100% renewable energy. Jobs must pay a minimum of $29.12 per hour, per the state incentive program.

The Cupertino, Calif.-based maker of iPhones, computers and iPads joins Google, Facebook and Microsoft, which have built expansive data centers in the state as they seek more power and capacity to support cloud computing and smartphone use.  But while local communities get an economic jolt from the construction, the highly automated centers don't provide demand for the fast-growing, highly paid engineering and analytics jobs that have created booms in coastal hubs such as San Francisco and Seattle.

The Iowa Economic Development Authority Board awarded $19.65 million in investment tax credits to Apple at a specially called meeting Thursday morning. State documents say that total is "negotiated as the amount of sales tax refund."


The appointed board unanimously approved the incentives. "We think this is a great banner day for Iowa," said Debi Durham, director of the Iowa Economic Development Authority. "It’s a great day to celebrate."

State incentives require matches from local governments. For its part, the Waukee City Council approved a 71% property tax abatement over 20 years for Apple ― an incentive worth  $188 million state records show. The city's match, including tax abatement and water and sewer infrastructure improvements, will total $194 million.

In exchange, Apple will provide $500,000 per data center building per year to a public improvement fund for use by Waukee "until certain maximum contributions are made." That total has not been announced.

Data power

In recent years, tech companies have invested billions in new Iowa data centers, lured by plenty of available crop land, access to high-speed fiber optics and a low risk for natural disasters.

Plus, Iowa is known for its relatively cheap energy and a large and growing portfolio of power derived from wind energy, a favorite selling point among Silicon Valley executives.

Google has invested some $2.5 billion in its Council Bluffs data center.

Facebook announced in May that it was breaking ground on its largest building yet in Altoona, ballooning the price tag of its Iowa data center to about $1.5 billion.

And last year, Microsoft announced a third phase of its West Des Moines data centers, bringing the company's investments in the suburb to about $4 billion.