Iowans respond to delayed project giving Apple $200 million in public incentives: 'It's just welfare'

Des Moines suburb residents slam government's secretive deal with Apple

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Residents of a Des Moines suburb criticized a government agreement with Apple that gave the tech giant $200 million in public subsidies for a project that's years behind schedule.

"It’s not fair. They don’t give me anything," a Waukee man told Fox News. "I go there as a citizen, as a single person, they’re not going to listen to me."

Apple reached an agreement with state and local officials in 2017 that gave the tech giant $213 million in public subsidies in exchange for 50 permanent jobs at a data center it would build in Waukee. Residents have criticized the agreement for lacking transparency and for its perceived unfairness. 

"I just don’t think it’s right," a Waukee resident told Fox News. "The small businesses in Waukee should get that type of a break and not the super huge conglomerates."

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Apple, which reached a market value of $3 trillion in January, planned to open the data center in 2020, according to the company's initial announcement. Apple now plans to complete the project in 2027, according to the Des Moines Register.

Waukee Assistant City Administrator Brad Deets described Apple as a "great corporate partner for our community." He repeatedly directed Fox News to Apple for specific questions about the agreement.

Apple declined to comment on how the agreement would help Waukee residents. The company also declined to comment on questions related to the deal's financial incentives, the negotiation process and promises to the city.

"We are proud to be part of the community in Waukee, and of our many contributions to the city, including contributing more than $5.5 million to local projects like the new Triumph Park," Apple representative Rachel Wolf Tulley told Fox News. She said the project would add hundreds of construction jobs and that the company hopes to break ground in the coming months.

Apple’s contributions represent about 2.6% of the subsidies it received. It had promised to donate up to $100 million to the city's public improvement fund.

Apple CEO Tim Cook's 2021 compensation package of $98.7 million was larger than Waukee's entire budget last year

Apple CEO Tim Cook

Apple CEO Tim Cook (Getty Images/iStock)

Questions surrounding the agreement

The negotiations regarding the agreement are still shrouded in secrecy more than four years after the announcement.

The state released the agreement's details just 90 minutes before a board meeting to approve the plans, the Des Moines Register reported. The meeting allotted 10 minutes for public comments.

The 2017 agreement gave Apple a 71% reduction in property taxes for 20 years, valued at $188 million, according to the Des Moines Register. The city and state also agreed to pay for the water and sewer infrastructure that the data center will require.

Deets said he couldn't provide details of the financial incentives provided to Apple.

"That’s really probably a question that needs to be directed toward Apple," Deets told Fox News. "Apple has been that go-to person in terms of explaining those incentives."

Apple refused to answer those questions. 

Dave Swenson, an economic research scientist at Iowa State University, called the agreement a "political decision." He told Fox News that it was a way for public officials to "pat themselves on the back and pretend they’re instrumental in economic growth."

'It’s just welfare'

"These data centers get extraordinary tax breaks," Swenson said. "Tax breaks that aren’t available for other types of businesses, tax breaks that don’t apply to existing businesses that are already in business and paying their taxes."

One citizen told Fox News: "It’s just welfare. Waukee probably would've been just fine without it."

Residents also criticized the agreement, saying that 50 jobs wasn't enough to justify $200 million in public subsidies.

"For 50 people that will work in that facility … it just doesn’t make any sense," a local hardware store employee told Fox News.

Waukee residents at the Heartland Co-Op criticized the agreement.

Waukee residents at the Heartland Co-Op criticized the agreement.

Critics and advocates alike have pointed to Iowa's natural resources and landscape as big draws for data centers. Opponents have said subsidies are unnecessary with such inherent incentives.

Iowa’s energy costs, land prices, natural climate and lack of earthquakes contribute to Silicon Valley’s investment in the state, according to state Sen. Joe Bolkcom. 

"We have natural incentives in place," Bolkcom told Fox News. He called financial benefits "giveaways to these super wealthy corporations."

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Swenson said: "The evidence suggests that roughly 70 to 75% of all public money that has been dedicated towards incentivizing businesses was unneeded and unnecessary. It did not affect the location decision at all." 

Iowa State University Research Scientist Dave Swenson

Iowa State University Research Scientist Dave Swenson

Swenson also said corporate subsidies harm public resources.

If Apple is not "paying its fair share of taxes … then everyone else – all things being equal – must pay more, or everyone else must satisfy themselves with fewer public goods," he told Fox News.

Deets said the city's population has increased by 75% over the last 10 years, and Waukee Community School District Superintendent Brad Buck said he expects enrollment in local schools to increase by 24% in the next five years. 

Waukee schools had a $70 million deficit in 2021, and Iowa accumulated nearly $800 million in debt, according to its most recent budget summary.

Waukee Assistant City Administrator Brad Deets

Waukee Assistant City Administrator Brad Deets

Deets hopes Apple's project will attract similar companies.

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"We always see development breeds other development, and we fully anticipate as Apple begins to build out, there will be other like-minded businesses that will locate in the city," he told a local CBS affiliate.

Swenson said that attraction may cost Iowans. He called the subsidies a "standing offer" that Iowa will have to meet for future corporate agreements, suggesting that big tech companies would expect to receive at least as much public funding as Apple did to build a data center in the state.

"The hole that they’ve dug, the public will never get paid back," Swenson said. "This is a pure, unadulterated subsidy."