Even before Apple Park opened its doors this spring, the massive new headquarters loomed large over the economy of its hometown.
A recent story by the New York Times noted that housing values in surrounding neighborhoods have been rising as the campus prepares for an influx of some 12,000 residents over the next few months. But the city’s Comprehensive Annual Financial Report released in the spring reveals even more insight into Apple Park’s impact.
This most recent CAFR is for the fiscal year ending June 2016. The report showed that total assessed value of property in the city increased more than $1.7 billion for 2015-16, of which $820 million was attributed to the new Apple campus. That means Apple was also responsible for about half of the $2.4 million increase in property taxes the city collected that year.
And that was a year before Apple Park opened. Cupertino is headed toward an even bigger windfall.
“The total construction value of the campus so far, totaling $1.6 billion, represents only a fraction of the anticipated full market value when the campus is completed,” the report reads.
Cupertino also enjoyed a mini boom of sorts in the second quarter of 2015 when it says construction was at its peak. Business activity jumped 33.5 percent that quarter, compared to Q2 2014. It has cooled since then, dropping 19.4 percent in Q2 2016, a decline the city says “reflects a correction to normalcy after a large increase in second quarter 2015.”
The report noted that Apple paid the city $23.7 million in FY 2014-15 to acquire a section of Pruneridge Avenue that would have cut through the heart of the new campus. Apple also paid a $900,000 construction tax to the city in FY 2016.
All of this does leave one question on the minds of city leaders: Is Cupertino too dependent on Apple?
The report doesn’t provide numbers, but it does say Apple is the city’s largest employer, which is no surprise.
Between Apple’s old headquarters, other properties, and the new campus, the company accounts for 17.15 percent of all assessed property value in the city. That’s up from 8.93 percent in 2011. Not counting Apple Park, the value of the company’s other property in Cupertino still more than doubled in value during those five years.
The report repeated a warning that city officials have heard before:
“With the expanded Apple presence, the City’s revenue base will remain concentrated among its top companies and top economic sector, the volatile business-to-business area. Past recessions and the historic departure of a major tax provider, Hewlett-Packard, demonstrates the need for diversification of the City’s revenue base and a long-term balance of revenues and expenditures.”
Among other things, the city would like to emphasize the idea of attracting more startups and incubators as part of a plan to diversity its revenue base.
Of course, Apple seems like a pretty solid bet for the long haul, with its stock trading at all-time highs and anticipation building for the next iPhone this fall. It’s safe to say that wondering whether Apple is too big is the kind of problem that 99.99 percent of all economic development directors on the planet would kill to have.