Apple will build new data center in Iowa, get $200M in tax breaks

Apple is building a $1.375 billion center near Des Moines, Iowa, after having secured more than $200 million in tax credits from local government.

The Iowa Economic Development Authority (IEDA) said today that Apple will soon purchase 2,000 acres of land in Waukee, a fast-growing suburb of Des Moines. That land will hold two data centers that will serve North American users of iMessage, Siri, the App Store, and other Apple services.

The data center will support 157 jobs paying $7.8 million in wages, according to IEDA. The facilities will run entirely on renewable energy, as do other Apple data centers. (Wind energy is big in the Hawkeye State.)

As a sweetener for the deal, Apple will get a rebate of $19.6 million in state sales taxes and a $188 million break on property taxes from Waukee, according to reports in Reuters and The Associated Press. It amounts to a 71-percent abatement on property taxes over 20 years.

Apple will spend $110 million to acquire and prepare the land, economic development officials told Reuters. Then it will spend about $620 million on construction, $600 million on computer equipment, and $45 million on other equipment.

Facebook, Google, and Microsoft all maintain data centers in Iowa already. In addition to generous tax breaks, the state offers crop land that can be developed, high-speed fiber optics, inexpensive wind-generated electricity, and relative safety from natural disasters.

The Des Moines Register published certain details of the deal yesterday and said the Waukee City Council will consider the matter today, as will the IEDA (PDF).

"This announcement further solidifies Iowa as a hub where innovation and technology flourish and demonstrates this is a place where world-class companies can thrive," said Iowa Governor Kim Reynolds.

The Apple deal is strictly tax breaks, unlike a controversial deal for Foxconn currently being debated in Wisconsin. That deal, which has not yet been approved by the legislature, promises Foxconn as much as $2.85 billion in cash payments from Wisconsin taxpayers in return for building a liquid-crystal display plant.