Gilbert school board vote could create hurdle for Apple Mesa deal - East Valley Tribune: Gilbert

Apple vote Gilbert school board vote could create hurdle for Apple Mesa deal

8 local entities asked to sign off on projected tax break

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Posted: Sunday, November 17, 2013 5:24 am | Updated: 6:20 pm, Tue Apr 8, 2014.

The deal that would bring Apple to Mesa has hit a snag due to a decision by the Gilbert Public Schools Governing Board to hold off on an agreement that would provide incentives to the company and provide the district millions in tax revenue.

At heart is the requirement for the board to sign a letter of no objection that would give Apple a tax incentive to move into its location near the Phoenix-Mesa Gateway Airport. Apple announced it would revamp the First Solar facility and build it up to produce sapphire material through an agreement with GT Advanced Technology.

The plant is expected to add 700 jobs to the region after its completion and 1,300 construction jobs prior to that. At the Gilbert Public School Governing Board’s Nov. 12 meeting, consultant Curtis Spencer said the total investment is expected to be approximately $1.5 billion.

Eight government entities — among them Maricopa County, Mesa Community College, the East Valley Institute of Technology and the City of Mesa — have to sign the letter in order for Apple to receive the tax break, and seven of them have already done so. Gilbert Public Schools — whose boundaries reach into Mesa meaning it receives taxes from the property — would have been the eighth had it agreed to sign the letter at the Nov. 12 meeting.

During the meeting, Mesa Director of Economic Development Bill Jabjiniak said the district would receive $3.5 million in revenue annually if the plant comes to Mesa. He said the property currently provides the district $1 million a year.

“You’re looking at a net revenue gain here, and for the all the other entities, they all looked at it as a big boon,” he said, calling it a “win/win” for all parties involved.

Part of the boon is based not just on the money the entities would receive, but from the rarity of the situation in the first place.

“In my career, you’re only going to see two or three of them, if we’re lucky. You’re not going to get another crack at the opportunity,” he said.

Spencer said it’s more akin to a “once in a lifetime” scenario and called the project a “game changer” for the region, comparable to Intel’s move to Chandler.

Jabjiniak couldn’t say the property involved was Apple’s due to a non-disclosure agreement, although the board members referenced it as the Apple plant frequently.

However, Jabjiniak told the board failure to sign the letter could stop the progress — including work and employment opportunities —the company has made at this point. That, he said, could also dissuade the company from moving into the property.

“They might decide not to invest here, so you’d lose the $2.5 million increase you’re looking at,” he said.

While he conceded the company might not move in if the board approved the letter of no objection, Spencer said not signing the letter opens the gates for Apple to reconsider other offers. Even though the agreement was announced, Spencer said the other contenders have not been told they are out of the running.

Board members Lily Tram and Jill Humpherys both strongly supported signing the letter of no objection due to the positive revenue effects it could have on the school district and the surrounding region.

“I certainly don’t think we should stand in the way of what the City of Mesa has worked out; I think they’ve worked out a great economic plan,” Humpherys said.

Board clerk Julie Smith agreed with her colleagues about the economic benefits, and said it would be good for the area.

“However, I do not believe it’s appropriate for government to pick winners and losers. Providing deals to some mega companies when we have all these entrepreneurs, we have mom and pop shops,” she said, “They’re not being given a break like this company is being offered to come in and stimulate the economy. And based on my principles, I do not support this for that reason.”

Spencer, however, said the incentive Apple would receive for moving to Mesa is not exclusive to large businesses, as smaller operations can receive similar incentives.

Board member Daryl Colvin sided with Smith, saying a discussion he had with a representative from the Goldwater Institute created concerns about what he considered the clandestine nature of the discussion between Apple and the state.

“None of us on this board have been brought inside any of those disclosure agreements, and yet we are supposed to approve that which we are shielded from knowing and everything we should know about,” he said.

Colvin requested the board table the vote so he could have more time to consider the decision, although Tram countered by saying the board knew about the situation well in advance and had enough time to consider it.

The discussion became heated among the board members for approximately half an hour until board president Staci Burk agreed with Colvin to table the item. The vote to table passed with Tram and Humpherys voting against it.

The board decided to schedule a second meeting for Nov. 13 to vote on the issue, but Burk said the meeting was cancelled out of concern that it would violate open meeting law. The meeting is now scheduled for Monday, Nov. 18 at 7 p.m.

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