A few of us are having some laughs as the media says the Apple Reno data center is a billion dollar data center.
Here is one example from GigaOm.
Apple looking to build $1B Nevada data center by year’s end
Apple’s North Carolina data center
Apple’s taking a billion dollars and heading to Reno, but it’s going to avoid the slots: it plans to invest the money in a data center and a separate shipping and receiving office.
I've been waiting for the public disclosure to get the numbers closer to what would not get us laughing. Las Vegas Sun has what makes sense.
Construction of the data center just east of Sparks is expected to generate a one-time $103 million economic impact, and Apple has said it will invest $1 billion in equipment for the storage center.
The Las Vegas Sun provides details on the tax incentives passed.
Here’s how it will work: The state can waive all but 2 percent of the sales tax rate for the server equipment Apple purchases for the data center. But by opening a second location in a special tourism improvement district in downtown Reno — an office meant simply to receive shipment of those servers — Apple is eligible to be reimbursed 75 percent of the 2 percent sales tax it still owes.
That piece of the deal is up for City Council approval today.
After all of its abatements and reimbursements, Apple would pay only 0.5 percent sales tax — instead of 7.5 percent — on the $1 billion in server equipment it’s expected to buy over the next 10 years.
Personal income from the local construction is estimated to be $15 million.
An economic impact analysis — named “Project Jonathan” after the medium-sized sweet apple to hide the company’s identity — estimates it will generate 329 direct and indirect jobs for the community with a total personal income of $15 million.
When you see all these facts, you can see why a $1B data center is a hype to get people to think it is a big deal.
This is a $100 million data center with 0.5% tax rate on $1B of IT equipment purchased over 10 years. Would you be excited by the $5 mil in sales tax collected over 10 years from Apple's presence? Apple got a great deal.