Wednesday, June 27, 2012

Does That Apple Still Look Rotten?

All hail Apple! The tech giant is now planning to open its iCloud data storage facility in Washoe County. And already, Governor Sandoval and a multitude of Northern Nevada politicians are hailing this as economic salvation for Reno.

Apple's comment on bringing the data center to Reno is as follows:

"We hope to build Apple's next data center in Reno to support Apple's iTunes Store, App Store and incredibly popular iCloud services. If approved, this project would expand our presence in Nevada and create hundreds of construction jobs over the next year, plus permanent jobs at the data center which will add to our existing total of nearly 400 employees in the state."

Steve Hill of from the Governor’s Office estimates the plant would bring 500 construction jobs in August. 230 direct jobs and 90 indirect jobs coming upon completion. [...]

Washoe County chairman Bob Larkin commented, saying:

"The Washoe County Board of Commissioners recognizes that, as a leader in the global economy, Apple has many choices worldwide for where they can locate and invest hundreds of millions of dollars, and the Board is extremely proud to endorse this project and be in the running to partner with them on such a prestigious economic development project. Having Apple in our community would put us on the global economic development map for other related industries.” Larkin continued, “This proposed high speed data center could bring hundreds of much needed construction jobs to our area in the coming months. In addition, Apple promises the investment of $1 billion dollars in our region over the next 10 years. The agreement to move forward with this project represents a watershed moment for our region's economic future."

Well, it's better than nothing. I just find it funny how this comes on the heels of an explosive report of Apple setting up a shell company in Reno to avoid paying California taxes. In April, there was huge outrage over Apple (mis)using us for tax evasion. But now, all of a sudden, Apple becomes this heroic figure swooping in to rescue Northern Nevada's economy? I smell something fishy here.

Indeed, the fact that it was Apple seeking the tax breaks wasn’t publicly known until 8 a.m. Tuesday, less than three hours before the Washoe County Commission unanimously signed off on a deal worth $89 million in tax abatements over 10 years.

Apple won the county commission’s endorsement in a hearing that lasted a scant 20 minutes, during which no one testified in opposition or even rose to question the tax breaks.

Instead, the developer, Apple executives and lobbyists sung the praises of the project, and commissioners almost giddily endorsed the tax incentives before posing for a photo in the commission chamber with the businessmen who brokered the deal. [...]

[Reno City Council Member Dave] Aiazzi said Apple is striking at the right time, offering a recession-stricken community the prospect of high-paying jobs.

“If everything was good and the economy was great, we may not think this is such a good deal,” Aiazzi said. “But for the people who get the jobs out there, who are saying, ‘I need the money,’ for them it’s worth it.”

Let's be real here. If this were an everyday working class Nevada person getting a sweetheart deal like this, many if these same politicians would be aghast in horror as they'd be taking their queues from teabaggers screaming, "WELFARE!!!! WELFARE!!!!!" Well, where are the teabaggers to call out the corporate welfare that the State of Nevada, Washoe County, and City of Reno are about to bestow upon Apple? So "WELFARE!!!!!" is evil if it's a working poor family trying to survive in this rough economy, but it's A-O-K for a multinational corporation like Apple? Sorry, but this is the most blatant and disgusting double standard I've ever seen!

Let's be honest here. Apple struck while the iron was hot and took advantage of Brian Sandoval's willingness to cut any kind of deal to save face and show Nevada that "he means business". Apple wins in opening a new data storage facility and paying hardly any taxes on it, while California continues to lose in not being able to collect the corporate income tax it's otherwise owed. Nevada, meanwhile, continues to be satisfied with mere economic crumbs.

Now I can't completely blame local electeds in Washoe County for taking this deal. As I said earlier, something is better than nothing. And as long as our state's "leaders" continue to pursue these "quick fix" deals instead of taking the necessary long term action to secure long-term economic health, this may actually be the best we can get for now.

But looking forward, we must demand better. Think about it. While Sandoval's office is gushing over a data storage facility, where is the real tech innovation happening? Where is the real job creation happening? Where are the exciting tech start-ups happening? Oh yeah, that's right. Maybe California isn't that much of a loser, after all? And maybe Nevada will finally consider properly investing in our future?

1 comment:

  1. Author, author!

    Was talking to Guy Rocha one day about the dreary sate of Nevada's economy, and he used the term Banana Republic. Where and when does it end? Setting this precedent with Apple invites every other unhappy California business, not manufacturing or R&D mind you, to get in line and follow suite. As observed above, quick fix vs long term? Apparently the decision has been made.