North Carolina, Apple negotiating deal on Triangle campus
Posted May 16, 2018 3:32 p.m. EDT
Updated May 16, 2018 6:11 p.m. EDT
Raleigh, N.C. — Apple is close to announcing a deal that would bring as many as 10,000 jobs to North Carolina, including a major investment in the Research Triangle Park, according to multiple sources with knowledge of the deal.
The investment would be between $1.5 billion and $2 billion, and the jobs would pay on average around $130,000 a year. Many of the jobs would be high-tech research and development jobs. One government source said this is "by far the biggest project this state's ever seen as far as average salaries, number of jobs."
Republican legislators planned to meet Wednesday afternoon to hear details of a state incentives package that would allow Apple to hold onto a portion of the taxes generated by the project.
"It's a done deal," one source said, "as soon as we pass this bill."
Another source hedged, saying something can always come up to derail the deal, particularly until the General Assembly and Gov. Roy Cooper formally sign off on the incentives package. A formal announcement had been scheduled for early June, but that is subject to change due in part to media reports about the negotiations, one source said.
Apple did not respond to requests for comment.
WRAL News has also confirmed from four sources that Apple leadership canceled a meeting last month with Cooper, who was in California for a multi-day trip. Cooper and company Chief Executive Tim Cook did meet Friday while Cook was in town to speak at Duke University's commencement on Saturday. Two government sources said the deal had been hammered out by then by high-ranking legislative officials.
WRAL News has seen an incentive schedule that initially grants Apple about 56 percent of the employer's share of withholding taxes that the company would generate in North Carolina for the first six years of the deal. That grows to 90 percent as the total jobs grow after the first six years. Withholding money also would flow into a state account intended to boost rural development.
At first that would be nearly 19 percent of the withholding amounts, falling to 10 percent.
A source involved in the deal put the floor for new jobs at 3,000, but multiple sources said the expectation is between 5,000 and 10,000 jobs long-term.
Because of the high-paying jobs and faster ramp-up, the project was described as a bigger prize than Amazon, which is looking for a second headquarters to house as many as 50,000 jobs and named the Triangle as a finalist in its quasi-public search.
Three sources said the state's economists, who ran numbers on incentives and returns, love the Apple deal.
"Our economists have basically told us that the only way this doesn't work is if you let them leave," one source said.
There's no upfront grant money from the state in the proposed incentives package, the two government sources said. The agreement also includes 30 years of property tax abatements from Wake County, the sources said.
"They want 30 years of stability," one source said.
Apple would initially land in or near Cary, leasing space off Weston Parkway for roughly 1,000 employees, four sources said. The company would build up and transition to 300 acres in the southernmost portion of RTP, all on the Wake County side, government sources said.
Scott Levitan, president and chief executive of the foundation that runs RTP, declined to discuss any talks with Apple. "I really can’t," he said when asked about Apple.
In addition to the initial landing Cary and development in RTP, the company also plans to invest in new infrastructure, likely near Hickory in Catawba County, where it already has a data center.
A source who has seen a portion of a presentation made about the Apple project said about $900 million would be spent to build the new data center. Last December, media reports said Apple planned to invest an additional $1 billion in the sprawling Catawba County campus, where it has already invested $4 billion since 2009.
According to another source, the Cary Chamber of Commerce briefed some of its members Wednesday on economic development issues and noted that the Triangle is believed to be on a "short list" and "had a good shot at this."
The Greater Raleigh Chamber of Commerce said it would not comment about the Apple project, noting that it is an ongoing project.
David Rhoades, communications director for the North Carolina Department of Commerce, also declined to discuss Apple.
"We talk to a lot of companies," Rhoades said, adding that no comments would be made "until a site decision has been made public."
Apple has announced plans to invest some $30 billion in the United States, build an additional campus and hire some 20,000 people over the next five years. A North Carolina investment would be part of that, but the state apparently has not been alone in being considered for the project. According to The Washington Post, "Apple has quietly explored the idea of opening a campus for 20,000 employees in Northern Virginia."
Two North Carolina sources said Wednesday that they believed this state was Apple's favorite from the start.