Apple (AAPL) won final approval Tuesday from the Cupertino, Calif., City Council to build its new 2.8 million square-foot "spaceship" campus seven-and-a-half years in the planning, but it took a unanimous vote of those same officials to shave 15 percent from the vendor’s annual local tax break to get the deal done.

DH Kass, Senior Contributing Blogger

November 20, 2013

2 Min Read
Apple Wins Final Approval for New 'Spaceship' Campus

Apple (AAPL) won final approval Nov. 19 from the Cupertino, Calif., City Council to build its new 2.8 million square-foot "spaceship" campus seven-and-a-half years in the planning, but it took a unanimous vote of those same officials to shave 15 percent from the vendor’s annual local tax break to get the deal done.

Cupertino has granted Apple an annual tax break since 1997, when the company was in dire financial condition and its future uncertain. As detailed by the San Jose Mercury News, at that time, the city agreed to refund to Apple 50 percent of taxes generated each year from its sales to businesses as an incentive for the company not to relocate. Tuesday’s city council vote pares Apple’s annual tax break to 35 percent, which means that the 60,000 person community will pay the vendor—whose cash storehouse could hit $170 billion in 2013—about $4.5 million this year to stay in Cupertino based on current sales figures. This year’s deal saves the city of Cupertino slightly less than $2 million, according to figures compiled by the Mercury News.

"There will be short-term and long-term impacts from this new development,'' said Cupertino Mayor Orrin Mahoney. "And, as part of our negotiations, this change was just one way that Apple could continue to help us out in the long term,” he said. “This will give us some additional revenue, which will be nice to have.''

The centerpiece of Apple’s new campus project is the four-story ringed main building, which has been described in a variety of ways, from a “Ferris wheel sheathed entirely in curved glass,” as the Mercury News put it, to a massive donut to, well, a spaceship. The building will house some 14,200 Apple employees under one roof. Renderings of the new facility are available here.

Because the Cupertino City Council officially approved the project in a mid-October meeting, Tuesday’s vote merely filled in the remaining blanks on the deal’s final details. Apple already had pledged to pay for a number of roadway improvements to relieve roadway congestion from the new facility and promised that one-third of its employees will use public transportation or its shuttle buses to get to work at the new campus.

Apple first began buying land in the Cupertino area in 2006 with a new campus in mind and five years later, Steve Jobs proposed the idea to the Cupertino City Council. Apple previously has said it expects to break ground on the project this year and to finish it in mid-2016.

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DH Kass

Senior Contributing Blogger, The VAR Guy

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