It's Official: Apple to Build Massive Data Center

My colleague Michael Hickins discussed the rumors that North Carolina was going to cut a huge tax break deal for Apple, which was planning a server farm in the state. Now it's a go.

The first part came Monday, when the state's legislature approved the deal on a 40 to 8 vote. Then today, Governor Bev Purdue announced that Apple had chosen her state as the location for the data center, which will employ at least 50 people full-time. Here are some of the details:

  • If Apple hits the $1 billion level of investment within nine years of starting, it gets a tax break of $46 million over the next decade.
  • If the server farm is active for 30 years, the company could save more than $300 million in taxes.
  • Apple will have to meet various investment and wage targets and provide health insurance to employees. (This last part seems like an attempt to score easy political points, as I've yet to hear of full-time IT people willing to work for a company that didn't have healthcare coverage.)
  • The facility will have to be in an area officially designed as economically distressed.
  • The governor is also counting on needed services -- maintenance and repair, HVAC, landscaping, and security -- to pump an additional $5 million to $6 million into the region annually and create upwards of 250 jobs. However, the way the information reads, it may be that none of these jobs will have to meet any wage or benefit tests, because they will be outsourced to local firms. If you add construction and other potentially temporary work, the total number of jobs, though clearly not ongoing, would be an estimated 3,000, according to the state's Department of Commerce.

    It's not the first time the state has tempted a tech investor. When Google built a data center in western North Carolina, it got a package worth an estimated $260 million over three decades. (Does this mean that Apple has better negotiators?)

    And there's still no word from Apple on what it's planning to do with the data center. It could be for extending such things as the iTunes and iPhone apps stores, though I offered some other potential uses last week.