Apple Getting a Cool $10 Million From State Fund for Mesa Manufacturing Facility

Apple Getting a Cool $10 Million From State Fund for Mesa Manufacturing Facility
JoshSemans via Flickr

The state incentives for Apple to open a manufacturing facility in Mesa could total more than $10 million.

An Arizona Commerce Authority spokeswoman says there's an agreement for a $10 million grant to Apple from the "Arizona Competes Fund," plus possible grants and tax credits for the company that's actually going to do the manufacturing at the facility, GT Advanced Technologies.

See also:
-Apple to Open Manufacturing Facility in Mesa

This is the deal that was kept secret for some time, which didn't make everyone, namely the Goldwater Institute, happy.

This $10 million grant is a pretty good chunk of the $25 million "Arizona Competes Fund," which the agency has defined as so:

This has also been labeled the "Deal Closing Fund." To qualify, a company will need to achieve certain performance measures, average employees' wages above the county's average wage, and other requirements similar to the existing Job Training program. The Arizona Competes Fund will generate dollars for investment in business projects that stimulate and promote industries that provide stable, high-wage jobs. The program will be funded through increases in corporate income tax withholding, and capped at $25 million.

State budget documents (page three) show that fund gets most of its funding from the state's general fund, through income-tax withholding, but also gets a few million from lottery revenues.

Arizona's had this fund for a few years, although other states (Texas' "Enterprise Fund" comes to mind) have had these things for much longer.

As we've reported earlier, Apple entered a $578 million deal with the other company, GT Advanced Technologies, to produce some sort of "sapphire material," for its products. Neither company explained exactly what's going to be made at the Mesa facility.

Although it seems obnoxious to have to pay a company to make things here, the Arizona Commerce Authority paints a positive picture of the deal (obviously).

The Commerce Authority expects more than $100 million in tax revenue from Apple's investment in five years.

Here's much of the information we got today from the Commerce Authority:

Apple's commitment to locate its newest U.S. manufacturing facility in Arizona represents a $1.5 billion capital investment for our state and will bring 700 new permanent quality jobs for Arizonans, as well as approximately 1,300 construction jobs. Based on these project parameters, the Arizona Commerce Authority has agreed to extend an Arizona Competes Fund grant to Apple in the amount of $10 million. Payments under the Competes Fund agreement will be performance based and contingent upon job creation and capital investment requirements.

A third-party economic impact study indicates Apple's investment will generate more than $102 million in tax revenue in the state over a five-year period (not including corporate income tax). This same economic impact study also indicates that the creation of 700 jobs will produce more than 800 additional indirect and induced full-time jobs in Arizona. Apple's manufacturing partner, GT Advanced Technologies, may qualify for Qualified Facility income tax credits and Job Training grants.

See details on the Commerce Authority's funding on the next page:

Arizona Commerce Authority Appropriations

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Follow Matthew Hendley on Twitter at @MatthewHendley.

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