Updated to include result of commissioners' vote

By a 4-1 vote, Travis County Commissioners approved the final contract outlining a tax incentive for Apple Inc. on May 1. The Cupertino, Calif.–based company is proposing to build a $282.5 million, 1 million-square-foot operations center at Parmer Lane and Delcour Drive and hire 3,635 new employees at an initial average salary of $54,000.

In exchange for meeting certain requirements, Apple will receive a 60 percent base rebate on property taxes each year for the first 10 years and then a 40 percent rebate in the last five years of the agreement.

Apple could receive an additional 5 percent rebate for achieving Leadership in Energy and Environmental Design status of the building and another 5 percent if 50 percent of the new employees hired reside in Travis County. The total incentives could total $5.4 million to $6.4 million over the 15-year period, depending on the terms Apple achieves.

Commissioner Sarah Eckhardt said she voted against the contract after Apple declined to disclose information about where its existing employees reside in the county and would not commit to a program to hire economically disadvantaged people who are qualified for the jobs.

"When an employer asks they receive preferential tax treatment from a taxing entity, I think it's entirely appropriate for the taxing entity to demand conditions with regard to employment and that those conditions include employment for individuals who are within that taxing entity and are most in need of the type of employment that the employer provides," she said.

Concerns over wording

During the last two court meetings, commissioners discussed the language of other terms in the contact, including land ownership. Bill Aleshire, a former Travis County judge who served from 1987 to 1998 and who now works as an attorney, said during the commissioners' April 24 meeting that he has concerns about Apple not yet owning the property it is proposing to build on and how that could affect the property tax rebates.

The contract now states that Apple must own the property where it plans to build its Americas Operations Center.

Another section that received revised language concerns wages for employees. The county added a liveable wage term for the lowest 10 percent of new employees that salary must be more than $35,000 and hourly wages must be more than $11 per hour.

Commissioner Ron Davis said he wanted more assurance that Apple would seek assistance with hiring people from impoverished areas from local organizations, such as the African American Men and Boys Harvest. Jason Lundgaard, Apple's manager of state and local government affairs for the Western United States, said Apple has reached out to every organization the county suggested.

Ownership of the land

Riata Vista LP owns the nearly 40-acre plot broken in to three tracts at Delcour Drive and Parmer Lane, according to Travis County records. Riata Vista LP is an entity of Rosemont, Ill.-based McShane Corporation, composed of four companies that focus on the areas of development, construction and health care solutions. The McShane companies are headed by James McShane.

McShane partnered with MetLife Real Estate Investments to buy the property in February 2007 from Sun Microsystems Inc., now owned by Oracle, according to a news release dated September 2008. The current estimated appraisal of the land is $17.9 million.

Gary Farmer, president of Heritage Title Company of Austin and vice chairman of economic development for the executive committee of the Greater Austin Chamber of Commerce, is listed as trustee for Bank of America on the deed of trust to the property. Farmer has been a proponent of Apple's proposed expansion.

In an email to Community Impact Newspaper, Farmer said every deed has a trustee appointed, often without the trustee's knowledge, in case the lender needs to foreclose on the property.

"Please understand that I have no interest in the land or the note," he said in the email. "My name was simply inserted as a place holder."

After purchasing the property, McShane had intended to construct a 650,000-square-foot office park, Riata Vista Business Park, using its own Cadence McShane Construction company. The site would have featured four three-story office buildings with retail, banks and restaurants, according to its website. McShane had hired Austin-based Aquila Commercial to lease the space.

A representative from McShane's Austin office said the company is not at liberty to say anything regarding the status of the property or the project. The marketing agents from Aquila assigned to project did not return messages.

As it stands, there are no buildings located on the property, which is mainly full of trees and other foliage.

Local and state incentives

Austin City Council unanimously approved an economic development agreement with an $8.6 million tax incentive with Apple Inc. on March 22. If Travis County and Apple can reach an agreement as well, Apple is eligible to receive a $21 million state investment over 10 years. That money would come from the Texas Enterprise Fund, which is used to attract businesses to the state.