Apple Inc. (AAPL): How Arizona Charmed Its Way To A Mesa Plant

Apple Inc. (AAPL): How Arizona Charmed Its Way To A Mesa Plant
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Apple Inc. (NASDAQ:AAPL) is preparing to open its Mesa plant by the end of this month. The facility will be producing sapphire glass, and will employ 700-full-time workers. The Mesa plant is also expected to create 1,300 temporary construction jobs. In 2012, Arizona lost the race to Texas when the iPhone maker was planning to build a new facility in an attempt to bring some of its manufacturing back to the U.S.

The beginning of Apple’s Project Cascade

But this time, the state pulled out all stops to woo the world’s most valuable company. Mainly because it was the need of the hour. Scott Smith, the mayor of Mesa, says that the region lost more than 300,000 jobs since the 2007 housing crash. But only about half of those jobs have come back, Smith told Adam Satariano of Bloomberg. When Apple Inc. (NASDAQ:AAPL) began looking for a place to build its sapphire glass factory, Mesa fast-tracked building permits, built power lines and offered tax incentives. The Cupertino-based tech giant will operate the factory with GT Advanced Technologies Inc (NASDAQ:GTAT).

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Apple Inc. (NASDAQ:AAPL) began exploring the vacant facility of the solar panel maker First Solar Inc. in September 2013. The tech giant began inquiring about the vacant space as an anonymous electronics company. So, Mesa officials had no idea it was Apple. What worked in Mesa’s favor was that the plant had been built over the past few years, and it could start operations in just a few months. The Cupertino-based company revealed itself later and made city officials sign a non-disclosure agreement to keep the discussions secret. It had code named the operation as “Project Cascade.”

Arizona poured multiple sweeteners upon Apple

Arizona officials were nervous. Mesa didn’t want other states to trump its bid, and it had only a few days to respond. A crucial point was power. Apple Inc. (NASDAQ:AAPL) wanted to operate the plant using 100% renewable energy. It had told the state and the Salt River Project about how to do it. Today, they are building new geothermal and solar projects because of Apple’s facility. The company also negotiated with state officials to build a new power substation for its Mesa plant. Arizona issued all the construction permits in less than 30 days, and most of them happened in just 24 hours.

Arizona offered a number of other sweeteners. The Arizona Commerce Authority awarded the company a $10 million grant to improve the buildings. The state also designated the area around the manufacturing facility a foreign trade zone. It will reduce property taxes by more than 70%. By early November, Apple Inc. (NASDAQ:AAPL) had signed the deal with Mesa. On November 4, 2013, the tech giant officially announced its deal with GT Advanced Technologies Inc (NASDAQ:GTAT). Since then, many other companies have expressed interest in starting operations near Apple’s plant.

Apple Inc. (NASDAQ:AAPL) shares ticked up 0.30% to $521.25 in pre-market trading Monday.

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