Can an Apple datacenter deliver local jobs?

Can an Apple datacenter deliver local jobs?

Summary: Trading multi-million dollar tax breaks for a small number of low paying jobs doesn't seem like a good long-term economic plan.

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Apple's second large datacenter, being built in Prineville, Oregon, comes with something that major datacenter projects rarely include; an actual numerical guarantee of local jobs. In response to the local community voting to give tax breaks to Apple, the size of which will be based on the total Apple investment in the area, Apple released a statement in which they promised to invest no less than $350 million and hire at least 35 permanent employees (staffing unrelated to the temporary construction jobs created by the building project).

With a local 14% unemployment rate, the addition of even 35 jobs to the local community of less than 9500 is an important addition to the employment base, but in a 10,000 square foot modular datacenter, the need for skilled technicians is minimal, and I would be unsurprised if the fewer than a half-dozen skilled technical jobs will be among those Apple offers. This number could go up if Apple decides to base other technologies in the area, such as construction similar to the solar power array being added to their first datacenter complex in North Carolina, but otherwise a datacenter on this scale simply doesn't require a significant on-site technical presence.

Given the probable nature of the majority of the jobs  that the datacenter will provide, the local employment benefits will likely never come anywhere near the dollar value to the local government of the tax breaks that were conceded to get Apple to build in the community. Prineville still sees these large datacenter projects as import to the future of the community, with City Manager Steve Forrester being quoted in an article on the oregonlive.com website as saying that he sees this second major Prineville datacenter project (Facebook was the first)  as a ‘huge step  of developing our diversified economy."

Attracting additional datacenter projects to their local area may well improve the bottom line in a small rural community, but unless they can actually attract different types of technology businesses, they won't be diversifying their economy anytime soon.

Topics: Storage, Apple, CXO, Data Centers, Hardware, IT Employment

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9 comments
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  • Tax breaks conceded?

    The city wasn't getting ANY taxes from an Apple data center before, so even if they charge ZERO taxes, they are ahead of the game by having 35 new taxpayers in the local economy.
    baggins_z
    • Ok. and if those taxpayers just switched jobs to Apple's center

      then the local economy really didn't make anything new.

      And are you saying that these local taxpayers make such an unbelievable amount of money that it would off-set the tax breaks, and the added load to the local infrastructure ?
      William Farrel
      • Then the jobs they switched from need to be

        filled, so the end result is the same.

        What additional load to the infrastructure? Utilities payments cover electric, water and sewage. Apple has to build their own roads connecting to the thoroughfare. Gasoline taxes cover the road maintenance for the increased traffic. The state has done a very good job of programming you into thinking all taxes it collects are absolutely vital to its existence.
        baggins_z
  • Don't you mean "Prineville"?

    Using tax breaks to bring in new business, hey that's how certain areas are growing their economies and more "fair-minded" areas are chasing jobs away. But it's not the absolute number of jobs directly created, it's that outside money will be coming in to pay for those jobs, and the support jobs in delivering power etc. Given the velocity of money, NEW money... oh wait...this is an IT board... Nevermind.
    oncall
    • If it was anything other than a datacenter

      I would likely agree about the collateral issues.

      But they are still betting the local economy on potential monies, not actual.
      David Chernicoff
      • Betting the local economy?

        They don't really have one to bet is my understanding which is why they would make such a deal. But even so, I see this as a gain for a town like this. You don't need to support a data center with expensive social services and such. It's going to sit there humming, consuming large amounts of local electricity and pumping out "extrinsic" dollars into the community. What the heck is the downside?
        oncall
      • Bull hockey

        The local economy wasn't getting any new money before, and they are getting new money now. There's no betting involved at all. Let's just cut to the chase. You want Apple to pay lots of taxes because they are rich, and you want to feel good about yourself by having the state take that money and give it to someone you think deserves it more. That way you can pat yourself on the back for being compassionate without actually enduring any real sacrifice.
        baggins_z
  • Tax breaks

    Is your recommendation then to not provide tax incentives to a company and let them move onto another locale? How would that would be more beneficial to the long term economic viability of the area?

    Tax incentives for companies looking to build are par for the course in development. This to me is really a non-issue. There is a town not far from me that has given numerous tax abatements to developers and companies building distribution centers in their town and that specifically has not hurt their economy. Distribution centers are a different animal employee wise than data centers, but the draw of a community willing to work with companies can't be underestimated and I think that's what you are doing.
    dchase@...
  • compare to reality, not speculation

    Skipping the other technologies, there is a real example of the positions actually employed at the North Carolina facility. The Oregon gov't agency could/should have asked for this specifically. Also, multiple data centers will require power and telcom support, providing more jobs.
    kxharmon