Apple to Build Iowa Data Centre, Get $207.8 Million in Incentives

Apple Inc will build a $1.375 billion (roughly Rs. 8,813 crores) data centre in Waukee, Iowa, Apple and state officials said on Thursday, with $207.8 million (roughly Rs. 1,332 crores) in incentives approved by the Iowa Economic Development Authority and Waukee city council.

Apple will purchase 2,000 acres (8.09 square km) of land in Waukee, about 20 miles (32km) west of Des Moines, to build two data centres. The company will receive a $19.65 million (roughly Rs. 126 crores) investment tax credit for creating 50 jobs.

Apple said the project will generate more than 550 jobs in construction and operations, but did not specify how many of those jobs would be long-term positions.

Speaking alongside Iowa Governor Kim Reynolds, Apple Chief Executive Tim Cook said the facility "will create hundreds of jobs for people in Iowa from construction to engineering."

Cook said Apple will contribute up to $100 million (roughly Rs. 641 crores) towards a "public improvement fund" for the city of Waukee, adding the first project supported by the fund will be a youth sports complex that "will be open to all."

The bulk of the subsidy is a planned $188.2 million (roughly Rs. 1,206 crores) property tax abatement of 71 percent over 20 years provided by the city of Waukee, according to economic development officials.

State subsidies to technology employers have become a key issue in Midwestern states such as Wisconsin, where Foxconn, formally known as Hon Hai Precision Industry Co Ltd, is seeking $3 billion in subsidies for a $10 billion (roughly Rs. 64,090 crores) LCD panel plant. The incentive package passed Wisconsin's Republican-controlled state Assembly last week by a 59-30 margin.

Foxconn is a major Apple supplier, but is not expected to make any Apple products at its proposed US plant.

The Iowa data centre will join Apple facilities in California, Nevada, Oregon and North Carolina, which also host services such as iCloud, Apple Music and the App Store.

"This new data centre will play a very important role in the App Store's continued success," Cook said. "As the App Store grows, we look forward to growing in Iowa."

Facebook Inc, Alphabet Inc's Google and Microsoft Corp also maintain data centres in Iowa.

Apple will spend $110 million (roughly Rs. 705 crores) to acquire and prepare the land for its data centres in Iowa, according to economic development officials.

The bulk of the costs, $620 million (roughly Rs. 39,74 crores), will go towards construction. Apple will spend $600 million (roughly Rs. 3,845 crores) on computer equipment, with $45 million (roughly Rs. 288 crores) going towards other equipment.

© Thomson Reuters 2017