Apple plans to open $1B campus in Austin
Calif. company also to expand to cities known as technology hotbeds
AUSTIN, Texas — Apple plans to build a $1 billion campus in Austin that will create at least 5,000 jobs, ranging from engineers to call-center agents, while adding more luster to a Southwestern city that has already become a bustling tech hub.
The decision, announced Thursday, comes 11 months after Apple CEO Tim Cook disclosed plans to open a major office outside California on the heels of a massive tax cut on overseas profits, which prompted the company to bring about $250 billion back to the U.S.
The company said it will also open offices in Seattle, San Diego and Culver City, Calif., each employing at least 1,000 workers over the next three years. Apple also pledged to add hundreds of jobs each in New York; Pittsburgh; Boston; Boulder, Colo.; and Portland, Ore.
“They are just picking America’s most established superstar cities and tech hubs,” said Richard Florida, an urban development expert at the University of Toronto.
Apple’s scattershot expansion reflects increasing competition for engineers in Silicon Valley, which has been the world’s high-tech capital. Bidding for programmers is driving salaries higher, which is catapulting average home prices in many parts of the San Francisco Bay Area above $1 million. Many high-tech workers are thus choosing to live elsewhere, causing major tech employers such as Apple, Amazon and Google to look in new places for the employees they need to pursue their future ambitions.
“Talent, creativity and tomorrow’s breakthrough ideas aren’t limited by region or ZIP code,” Cook said in a statement.
Cities nationwide offered financial incentives in an effort to land Apple’s new campus, but Cook avoided a high-profile
competition that pitted them against one another, as Amazon had before deciding to build huge new offices in New York and Virginia.
Amazon could receive up to $2.8 billion in incentives in New York, depending on how many it ultimately hires there, and up to $750 million in Virginia.
Apple will receive up to $25 million from a jobs-creation fund in Texas in addition to property-tax rebates, which still need approval. The figure is expected to be a small fraction of what Amazon received.
The government incentives offered to Apple seem “more in the line of normal business site selection” compared with Amazon’s public “shakedown,” said Mark Muro, a senior fellow at the Brookings Institution’s Metropolitan Policy Center.
“There’s a growing backlash in the country against the entire process of subsides and relocation inducements,” Muro said. “That said, the Apple numbers for a very significant increase in jobs are much less eye-popping than the Amazon numbers.”