By the BF Staff
From the May/June 2021 Issue
Apple has chosen Research Triangle Park as the location of its first East Coast campus, a $1-billion project that will create 3,000 new jobs in North Carolina with an average annual salary of $185,000.
The focus of the campus will be machine learning, artificial intelligence and software engineering, the tech giant said. Governor Roy Cooper said that once Apple creates the jobs, the tech giant will be eligible for incentives he considers “transformational.”
Under an agreement approved by a state incentives panel, Apple would get $846 million in cumulative cash payments over the next 39 years if the company meets job-creation and investment thresholds. The payments are calculated based on the income tax the state withholds from paychecks of the new workers.
The state Commerce Department estimates the project will generate nearly $2 billion annually in additional state revenues through 2061.
Cooper said the Apple project will encourage other companies to move to North Carolina and have a positive ripple effect on local businesses in the Raleigh area.
Groundbreaking on the new campus is expected this fall. A summary of the incentives agreement notes the 3,000 jobs will be created from 2023 until 2032.
“This is an important milestone that strengthens our position as a tech hub,” said Michael Haley, executive director of Wake County Economic Development.
Apple also said it plans to establish a $100 million fund to support schools and community initiatives in the Raleigh-Durham area. The incentives agreement also means $112 million will go to a state account designed to help rural areas improve infrastructure to attract companies.
“Apple’s global name recognition and the scale of its new presence in the Research Triangle will elevate North Carolina’s already strong reputation for producing highly skilled tech workers as well as having the quality of life and affordability that attract more of the same,” said Christopher Chung, chief executive officer of the Economic Development Partnership of North Carolina, which was among the state and local partners that helped attract the Apple investment.
“We expect other businesses―particularly in Silicon Valley and even globally―to take notice of this major announcement. And that will definitely boost our future recruitment efforts,” Chung added.
Chung pointed out that the Apple announcement is the latest in a trend of diverse companies with California roots locating operations in North Carolina. So far in 2021, companies investing in North Carolina have included Silicon Valley companies Google, Robinhood, Adverum Biotechnologies and Invitae, as well as Pennymac and Gilead Sciences. In total, these companies are expected to create more than 2,500 jobs in North Carolina.
Apple recently announced an acceleration of its U.S. investments, with plans to make new contributions of more than $430 billion and add 20,000 new jobs across the country over the next five years.
Over the past three years, Apple’s contributions in the U.S. have outpaced its original five-year goal of $350 billion set in 2018. The company is now raising its level of commitment by 20 percent over the next five years, creating economic benefits in every state. This includes tens of billions of dollars for next-generation silicon development and 5G innovation across nine states.
“At this moment of recovery and rebuilding, Apple is doubling down on our commitment to U.S. innovation and manufacturing with a generational investment reaching communities across all 50 states,” said Tim Cook, Apple’s CEO. “We’re creating jobs in cutting-edge fields—from 5G to silicon engineering to artificial intelligence—investing in the next generation of innovative new businesses, and in all our work, building toward a greener and more equitable future.”
INVITAE PLANS LAB FOR MORRISVILLE
Invitae Corp., a leading medical genetics company, plans to build a major testing and laboratory facility in Wake County, creating 374 jobs and investing $114.6 million in Morrisville over the next decade.
“Biotechnology companies continue to choose North Carolina as a trusted and reliable location to grow their companies,” said Gov. Cooper. “From specialized workforce training programs to world-class research infrastructure, companies like Invitae appreciate the advantages our state delivers.”
San Francisco-based Invitae follows a mission to bring comprehensive genetic information into mainstream medicine to improve healthcare for billions of people. Invitae’s goal is to aggregate the world’s genetic tests into a single service with higher quality, faster turnaround time and lower prices. The company’s project in Wake County will establish an advanced genetics testing laboratory on the east coast of the United States, to support Invitae’s fast-growing business. The Morrisville lab is expected to initially ramp up capacity to volume levels similar to Invitae’s flagship San Francisco laboratory facility, with additional growth projected in future years.
“As we continue to expand to support our rapid growth in the U.S., we were eager to identify a location on the East Coast that would improve our ability to serve our customers, improve our operational leverage and build a talented team with connections to a vibrant life sciences community. We have found the ideal location in North Carolina,” said Ken Knight, chief operating officer of Invitae. “Our mission is to make genetic information affordable and accessible for billions of people. Our new location near the Research Triangle Park will help us bring that mission to reality.”
The average salary of the specialized new positions will reach $91,176, although specific wages will vary depending on job role. The regional economy is expected to eventually benefit from more than $34.1 million in total payroll impact each and every year, and salaries for technical and specialized jobs at the facility are expected to be significantly above the average wage in Wake County which currently stands at $63,966.
Invitae’s project in North Carolina will be facilitated by a Job Development Investment Grant (JDIG) approved by the state’s Economic Investment Committee. Over the course of the 12-year term of this grant, the project is estimated to grow the state’s economy by $1.07 billion. Using a formula that takes into account the new tax revenues generated by the new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $6,767,250, spread over 12 years. Over those 12 years, new state tax revenues generated by the new jobs will exceed $20 million.
State payments only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets. JDIG projects result in positive net tax revenue to the state treasury, even after taking into consideration the grant’s reimbursement payments to a given company.
Invitae’s JDIG agreement could also move as much as $2,255,750 into a fund that helps rural communities across the state attract business in the future. When companies select a site located in a Tier 3 county such as Wake, their JDIG agreements move some of the new tax revenue into the state’s Industrial Development Fund – Utility Account. Local communities in more economically challenged areas of the state use grants from the Utility Account to build public infrastructure projects, which can improve a community’s ability to attract companies to their regions.
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