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Incentives to lure Apple plant to Mesa revealed

By Peter Corbett
The Republic | azcentral.com
Tue Nov 19, 2013 9:51 PM
http://www.azcentral.com/business/arizonaeconomy/articles/20131119incentives-lure-apple-mesa-revealed.html?nclick_check=1

The Arizona Commerce Authority wooed Apple Inc. to Mesa with the assistance of a $10 million grant, the largest sum ever distributed by the group’s business-development fund, according to documents released Tuesday.

Most of the previous grants handed out from the $25 million deal-closing Arizona Competes Fund, established in 2011 to lure businesses to the state, have been closer to $1 million. General Motors Co. received $1.3 million from the fund this year to establish an innovation center in Chandler with 1,000 jobs.

The Commerce Authority agreement for what is being called Project Cascade would create an estimated 1,300 construction jobs over two years at the Apple site and at least 700 full-time manufacturing jobs over five years with an average wage not less than $45,000.

“Apple’s commitment to locate its newest manufacturing facility in Arizona represents a $1.5 billion capital investment for our state,” said Sandra Watson, Commerce Authority president and CEO.

Two weeks ago, the state announced that Apple’s business partner, GT Advanced Technologies, would establish a high-tech manufacturing plant in the former First Solar Inc. factory in Mesa.

State officials had previously touted the deal for the new factory and the jobs it will bring, but until Tuesday the authority had declined to provide details about the incentives being given to Apple and GT, citing privacy agreements.

Apple bought the First Solar building for $113 million and will lease it to GT Advanced Technologies, a New Hampshire-based company that makes specialty glass and optical components.

It has not been disclosed what existing or new Apple product will be served by the Mesa plant.

Apple, based in Cupertino, Calif., has declined comment on the plant and did not return calls on Tuesday, but Apple and GT announced a deal this month for GT to produce sapphire glass for Apple products at the Mesa plant.

Steven Zylstra, Arizona Technology Council president and CEO, praised the state’s investment in Apple and suggested it could attract other companies that would be part of the supply chain.

“To me, this deal epitomizes the fact that Arizona has finally come into its own,” Zylstra said. “A bunch of us have been trying to build the innovation ecosystem here for about 10years.”

On Monday, the Gilbert Public Schools’ governing board approved a tax break for Apple, clearing a hurdle for the company to proceed with its plans.

The school district was the last of eight governing entities to approve the tax break.

The Commerce Authority said that a third-party economic study estimated Apple’s investment will generate more than $102million in tax revenue over five years.

The 700 manufacturing jobs are also expected to indirectly create 800 unrelated full-time jobs as the plant begins operating and spending money in the local economy.

The manufacturing plant would operate in a specially designated foreign-trade zone that could give Apple property-tax savings of up to 74percent.

The Commerce Authority is also offering assistance in recruiting, hiring and job training.

Project Cascade would also include development of at least one “solar farm” to generate electricity at locations throughout Arizona, according to the documents released Tuesday.

Salt River Project spokesman Scott Harelson said the utility is in negotiations with Apple to offer a discount on its electricity, which SRP also did for First Solar Inc. when it intended to operate the factory. SRP also is negotiating how to provide Apple with enough energy from renewable sources to cover its needs, he said. He could share few details because of a non-disclosure agreement with Apple.

The First Solar plant, which never opened, will have to be retrofitted for use by GT Advanced Technologies. The plant, which is 1.3 million square feet, is southwest of Elliott and Signal Butte roads.

Republic reporter Ryan Randazzo contributed to this article.

http://www.azcentral.com/business/arizonaeconomy/articles/20131119incentives-lure-apple-mesa-revealed.html?nclick_check=1