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Reno mulls tax breaks for proposed Apple project

Wed, 06/27/2012 - 5:50pm
The Associated Press

The Reno City Council is considering tax breaks meant to coax Apple Inc. to open two facilities in northern Nevada as part of a $1 billion investment over 10 years.

At a meeting Wednesday, councilmembers were set to consider their portion of a deal that includes $89 million in county, city and state tax abatements. Analysts say that's a 79 percent reduction in the Cupertino, Calif., company's tax burden.

Apple is proposing a 350-acre data center east of Sparks to house servers for its cloud computing service, and a business and purchasing center in Reno's Tessera District, a blighted area on the northeastern side of downtown.

A report on the so-called "Project Jonathan" said the data center would eventually employ up to 41 full-time employees and 200 long-term contract employees. Construction is estimated to create 580 temporary jobs, according to the Reno Gazette-Journal.

Analysts predict Project Jonathan would generate $343 million in economic activity over the next decade.

But of the $105 million in tax revenue the project is expected to produce during that period, state and local governments would see just $16 million of it after various tax breaks and endorsements, according to the Las Vegas Sun.

Steve Hill of the Nevada Office on Economic Development said the tax breaks are critical for Nevada to compete with other potential Apple sites, including sales-tax-free Oregon, where the company bought 160 acres earlier this year.

"They've got lots of options," Hill said. "The Prineville, Ore., area remains more competitive than Northern Nevada."

Washoe County commissioners signed off on their end of the bargain Tuesday, which gives Apple an 85 percent break on its personal property taxes. The City Council will decide whether to pledge 75 percent of its share of sales taxes to the company for the downtown business center.

Hill said the project will go through a monthlong approval process with the governor's economic development office, and if all goes as planned, construction could begin as early as August.

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