Steve Jobs, the late founder and CEO of Apple Inc. (NASDAQ:AAPL) had always aimed for the best. Four months prior to his death, Jobs presented his plan to build the company’s futuristic headquarters that would accommodate 12,000 employees in a single, circular building to the Cupertino City Council.
Jobs described the future headquarter of Apple Inc. (NASDAQ:AAPL) as a little spaceship. The big four-story ring measures 2.8 million square feet, which will be set on 176 acres of trees.
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In June 7, 2011, Jobs told the Cupertino City Council, “It’s a little like a spaceship. We have a shot at building the best office building in the world. I really do think that architecture students will come here to see it.”
He was unable to submit the final plans of the project to city, but he emphasized that the project would be expensive. During his presentation with the city council, Jobs said, “there isn’t a straight piece of glass on the whole building?…?and as you know if you build things, this isn’t the cheapest way to build them.”
Jobs highlighted that the plan for the curved exterior walls of the main building requires an unprecedented 40-foot, floor-to-ceiling panes of concave glass from Germany. It will have plenty of cafeterias including one with a 3,000 maximum seating capacity. The company will plant 6,000 trees to hide all the roads and parking spaces.
According to the article by Peter Burrows of Bloomberg Businessweek, the cost of the project is approximately $5 billion. He obtained his information from five people who have knowledge about the project but were unauthorized to talk about it. Based on their estimate, the new Apple headquarters would cost more than $1,500 per square foot, three times higher than the cost of the majority of the top-of-the-line corporate towers in New York. It would surpass the amount of money spent building the World Trade Center at $3.9 billion.
Another source said that prior to Jobs’ death, he hoped to do the ground breaking in 2012 and to move in to the new headquarter by the end of 2015. During the previous annual meeting of the company last February 27, Apple CEO Steve Jobs announced that the move-in date will be in 2016.
Three people familiar with issue said the date was pushed backed because the company is negotiating with Foster + Partners, the lead architect of the project to reduce the price of the contract by $1 billion before they can proceed with the construction.
Apple Inc. (NASDAQ:AAPL) hired DPR Construction as the general contractor. Its agreements with subcontractors are not yet finalized as some contractors will still submit their proposal by May.
The iPhone and iPad maker has abundant cash to fund the project. Apple Inc. (NASDAQ:AAPL) has $137 billion available cash. Many people in the investment community were asking; What will Apple do with its money? One thing is for sure, to fund Jobs’ spaceship headquarters.
Some investors, particularly David Einhorn of Greenlight Capital is asking Apple Inc. (NASDAQ:AAPL) to return capital to shareholders. He called for the issuance of a new class of preferred shares. Other investors call for higher dividend payments, and an increase in its share buyback program. The stock price of the company plunged from its peak at $705 per share to its current trading price at around $428 per share.
Keith Goddard, CEO of Capital Advisors and owns 30,537 shares commented, “It would take some convincing for me to understand why $5 billion is the right number for a project like this. This is rubbing salt in the wound, to spend at a level that most anyone would say is extravagant, at a time when they’re being so stingy on dividends.” According to him, if Apple’s stock price continues to underperform, the construction of Job’s dream spaceship headquarters would carry a negative story.
Apple Inc. (NASDAQ:AAPL) has the capacity to build the headquarters envisioned by Jobs. However, Cook hinted that the project will not be built as Jobs planned it.
“Steve put a lot of love and attention into this before he passed away. Hopefully, we’ve made it better during the design phase. We want to do this right,” said Cook.
Jobs plan was to make only six structures visible including the headquarters, the lobby to an underground auditorium, a a four-story parking garage, a fitness center, and two research and development labs housing testing facilities. He told the Cupertino City Council, “The overall feeling of the place is going to be a zillion times better than it is now.”
The rooftop of Jobs spaceship headquarters will be installed with 700,000 square feet of solar panels to achieve his goal of a “net-zero energy” campus. Apple Inc. (NASDAQ:AAPL) is currently negotiating contracts for solar and wind energy installation for the project.