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June 3, 2009 4:11 PM PDT

Apple confirms North Carolina facility

by Jim Dalrymple
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After weeks of speculation, Apple on Wednesday confirmed its plans to build a server farm facility in North Carolina. Gov. Bev Perdue officially welcomed Apple to North Carolina after signing a bill giving the company a state tax credit worth $46 million.

"We're looking forward to building a new data center in North Carolina, and we appreciate the efforts of Gov. Perdue and state lawmakers who helped make it possible," Apple representative Susan Lundgren told CNET. "Our teams are getting started right away to acquire a site for the data center, and we plan to begin construction soon."

Changes in the tax laws were not without opponents. Last week when the House voted in favor of the tax credit by a vote of 80-34, House Minority Leader Rep. Paul Stam was clearly upset with the incentives.

"They're playing us," Stam said. "And they're going to keep playing us as long as you agree to be played. They'll either come or they won't come, but whether they come I can virtually assure you it will not depend upon whether you pass this bill."

North Carolina said the Apple server farm will have about 50 full-time employees. One of the regulations that Apple has to follow is that the average wage in the facility exceed the wage standard in the county where it's located.

Overall, when all job types (like maintenance) are factored in, the state expects the Apple facility to create up to 250 jobs. The Department of Commerce estimates that with a $1 billion investment, more than 3,000 jobs could be created in the regional economy.

"North Carolina continues to be a prime location for growing and expanding global technology companies," said Perdue in a prepared release. "We welcome Apple to North Carolina and look forward to working with the company as it begins providing a significant economic boost to local communities and the state."

The site has not been finalized yet, but Catawba and Cleveland counties are said to be potential sites for the facility.

Jim Dalrymple has followed Apple and the Mac industry for the last 15 years, first as part of MacCentral and then in various positions at Macworld. A guitar player for 20 years, Jim also writes about the professional audio market, examining the best ways to write and record songs on a Macintosh with Logic Pro and Pro Tools. Jim is a member of the CNET Blog Network and is not an employee of CNET.
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by monkeyfun14 June 3, 2009 4:27 PM PDT
Tax incentives for a company only promising 50 jobs? Honestly? And these are jobs the average person won't be able to do anyways. Its not the people with education who need the jobs its the laborers.
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by MadLyb June 3, 2009 5:01 PM PDT
First off, realize I hate corporate welfare, especially since I live in NC and the primary milestone for this incentive package is to exceed the average wage in the county the facility is located. For the two counties mentioned, that would be about half of the going IT wage for an entry level Sys Admin. Fortunately/Hopefully the market will drive these salries much higher.

But, you really should read the article before commenting. The headcount of 50 is for direct Apple employees, when you factor in all the other workers that will work at or support the facility in state, it is quite larger.
by kcotham June 3, 2009 5:22 PM PDT
You have to factor in the ancillary jobs created. Jeesh monkeyfun, you need to go back to school and learn how to read. There will be a lot of people put to work just building the facility. Then, as the article stated, the facility will employ closer to 250 people.

The reality is that EVERYONE, educated or not, needs employment.
by schmand1231 June 3, 2009 8:13 PM PDT
Oh My!

Does kcotham need a new thinking cap or is he/she a shill for Apple? Building the place is a one shot deal. After that it'll be dead weight on the tax rolls.

250 jobs? Those are really expensive janitors. Or are people dump enough to think that Apple will have skilled techies on site?!? It'll be a lights out place and they'll have admins from India login to administer it.

This sort of think will just make the state poorer. Sitting there consuming real estate and paying no taxes.

I know! they can build a GM dealership for every employee to buy a car and subsidize that as well.
by kcotham June 4, 2009 4:51 PM PDT
I'm not a "shill for Apple" and my thinking cap fits just fine.

Granted, it isn't the best investment in the world that North Carolina could have made, but it's better than the 50 jobs some people were assuming. As for outsourcing to India, Apple has a good track record for avoiding that 21st century blunder. So I doubt they will do it here. The tax incentive they got at first is not a permanent thing. Eventually the taxes they pay will be a source of revenue for the state.

Just for the record, I'm personally against tax incentives, but some times they are a necessary evil.
by websterphreaky June 3, 2009 4:42 PM PDT
"facility" ????

Don't you mean an "Overpriced Gadget and Less Than 5% Market Share Chinese Computer Outlet"

how is this story REMOTELY News ... instead of the OBVIOUS - Apple Pimp Pandering???

[CNET editors' note: Personal attack deleted]
Reply to this comment
by technewsjunkie June 3, 2009 5:21 PM PDT
You need to be taller than "this line" to post here.
by kcotham June 3, 2009 5:27 PM PDT
TROLL alert!
by Perry_Clease June 3, 2009 5:37 PM PDT
"technewsjunkie June 3, 2009 5:21 PM PDT
You need to be taller than "this line" to post here."

It isn't the physical height, there are mature and intelligent individuals who are "little people." However, we get your point, a person should be in charge of their "faculties" if they are going to troll.
by esteven4 June 3, 2009 5:47 PM PDT
Now, I'm just your average guy who speaks English natively, but I believe the words "server farm" mean something entirely different than "retail store."

A retail store could be described as a "Overpriced Gadget and Less Than 5% Market Share Chinese Computer Outlet," assuming that the products sold inside qualify.

A server farm can not be.
by MyRightEye June 3, 2009 5:16 PM PDT
5% Market share? I guess some of are still using Commodore 64s too.
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by gikeda June 3, 2009 6:11 PM PDT
This just doesn't sound like a good deal for North Carolina. Yes, there will be construction jobs, but those are temporary. Yes, there will be an exponential effect from this investment; however, that materializes through additional business for restaurants, hair dressers and dry cleaners. They should only count the jobs that are directly created from the server farm which is 300.

If they split the $45 million between the 300 workers, that is $150,000. If they gave $150,000 to 300 random people in North Carolina, that would have had a larger effect than this Apple deal.
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by darussian12 June 3, 2009 8:12 PM PDT
you do realize paying the salaries of the people is prob going to be one of apples lower expenses...the city/county/state will be raking in all sorts of tax money from property taxes to whatever business/corp taxing policy nc has..just .the property taxes on a facility like this arent going to be in the ballpark you toss away each year.
by jlopezcnet June 3, 2009 7:59 PM PDT
Ok all you guys bickering fail to see the BIGGER question here. That is quite a facility Apple is investing in. What in the world does Apple have up its sleeve.

A major push online? Are they going to buy Yahoo! or AOL and build a web services environment? Maybe they are going to really buy twitter and start tweeting video and music?

Seriously that's pretty big news.
Reply to this comment
by schmand1231 June 3, 2009 8:17 PM PDT
Apple does not touch anything with < 30% margins.

Apple never did like to share. My guess would be a direct assault on RIM. iPhones, iPods the alleged iPad and come to think of it who needs AT&T?!?
by kelmon June 4, 2009 7:43 AM PDT
Indeed. I see all the numpties are out in force (again) and yet only one comment addresses something interesting - what's the damned server farm for? It'll be interesting to find out but I guess that is going to take a while.
by knowles2 June 4, 2009 2:35 PM PDT
Not really I do not see any new services appearing any time soon.
I do how expect expect huge rises in people downloading and watch films, tv series, music from Apple services over the next few years. This facility is likely design just to increase capacity's in there systems and may be build in some redundancies for the current systems to meet this new demand appearing, especially as broadband speed increase and the availability of broadband is extended.
by ikramerica--2008 June 3, 2009 8:14 PM PDT
Server farms also tend to expand over time.

Not to mention, the more tech jobs and tech companies NC brings to it's state, the more people will think of NC as a tech savvy state. Tech is the future, not smoking cigs.

As for "corporate wellfare"...

Since when is cutting taxes for ANYONE welfare. There is no defacto right to tax the crap out of everyone, and it's not a "gift" when you can negotiate lower taxes.
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by schmand1231 June 3, 2009 8:24 PM PDT
How is a big server farm with a couple of people walking around replacing the odd blade going to do NC any good?

Say did they mention who's going to pay to have all of the utilities run out to the place? I bet NC going to pay to get power to the place as well. Naturally Apple will be wanting nC to pay for the UPS's as well.
by TheForestFloor June 3, 2009 8:17 PM PDT
Some of the jobs and benefits to NC will be temporary, to be sure, but even if Apple has $46M in initial *income* tax breaks, they'll still be paying sales tax for water, power, construction equipment, transportation, payroll taxes for the 250+ workers, workers compensation, etc, which will feed directly into the state and local government coffers. Not to mention the (admittedly small) number of businesses that will sprout to feed, house, entertain and transport the new employees. I think that makes it more likely that more money will be generated for NC in the long run than the $46M Apple gets up front.

Besides, that's $1B less than the Mets and the Yankees have received from NYC for FOUR different stadiums... The city hasn't even come close to recouping any of that money, and it becomes less and less likely that they ever will. $46M is small potatoes when big cities are doling out billions and the US is doling out trillions. Even if the $46M would cover the costs of building the facility and paying all of the workers for a year (which it won't), these facilities can't just pick up and go... Unless Apple were to suddenly cease to exist (zeus forbid) NC and the target county will make their money back.
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by schmand1231 June 3, 2009 8:31 PM PDT
Another Apple spy sneaking about. I can't imagine how the math works this. Why does not one of the glorious NC reporters follow the money and see what the subsequent breaks are over the years?!? I presume Apple is not going to pay market rates for utilities.

Wake up people. NC been played for a fool.

NYC shot itself in the foot so NC should as well? Last time I saw a Yankee game on TV there were a lot of empty seats where the high end was supposed to be. Ih yeah and they cut the ticket price in half.
by dascha1 June 4, 2009 4:44 AM PDT
It's all politics... that's all. Never will Apple have any heart or sole of its core in NC or VA or anywhere in those parts. When that day comes, hades will have frozen.
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by whclevelandjr June 4, 2009 7:25 AM PDT
Well if NC doesn't want Apple, then AL will welcome them. Apple would be another jewel in our research park...
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by shycelticwitch June 4, 2009 10:08 AM PDT
I can see only good coming from this venture. Apple must have something pretty spectacular up their sleeve (as always), and this is just the groundwork. Let's review some of the rather inane comments made here a year from now, and see how many of them are eating their words.
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by aintnorainbowdorothy June 4, 2009 1:32 PM PDT
A server farm is a repository of information, not a manufacturing facility. Where did it say anythng about manufacturing in the article? Someone reads something and assumes the best whereas there will be only 50 direct jobs, with a hoped for 250 total? That's a ton of janitors kids. It doesn't take many people to change blades on a server. And it doesn't take many people to keep the place clean. Seems that N.C. has really been had to me. I live in South Carolina and it upsets me when we have to pay a company to locate here. That's what N.C. did, and S.C. has done the same. If they want to come here, they don't need to be paid to do so. Otherwise I think they just want the incentive and after the useful life of the facility is gone, the jobs are too.
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by Mikem704 July 4, 2009 3:29 AM PDT
Apple has been here before, in Charlotte with a bigger presence than they will have this time. Charlotte was a regional hub and training center. They pulled out, don't know why.

Rest assured they will have as my contract employees as possible. There are lots of kids out there who know about computers and advanced IT systems. The IT field isn't as good as it used to be.
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