Don't Let the Tree Fertilize the Soil

On Thursday, April 26th, Kirk Ladendorf and Farzad Mashhood of the Austin American-Statesman reported that a much ballyhooed deal to increase Apple's presence in Austin was again uncertain in their article, "Official: Apple deal 'in peril' over delays in approving incentives."  Austin's courtship of Apple has been in the news for months.  In the current economic environment, it would seem that a municipality would be well-served to roll out the welcome mat for a high-technology powerhouse like Apple.  Apple is an economy unto itself.  As Apple goes, so goes the NASDAQ.  Given evidence of Apple's willingness to take advantage of overseas partners, however, Austin and Travis County should brace themselves for the possibility that Apple is not their savior.

My wife and I have recently been scouring the Austin real estate market for our first home.  We gravitated toward areas that turned out to be near the proposed Apple expansion.  It seemed that buying in an area where new Apple employees might relocate was a good idea.  Buy a home during a housing slump and watch your property value increase as tech workers flock to the neighborhood with fists full of dollars. 

Big businesses steer our world.  I have watched this for the 13 years I've been in Austin.  CSC got a sweetheart deal downtown.  Round Rock prostrated itself to IKEA.  These are only two examples.  Austin, admittedly like every other municipality, recognized that bringing in business was the road to growth.  Give a company massive tax breaks, and that company will bring jobs.  The people that get those jobs will buy homes and products, providing tax revenue to offset the corporate incentives. 

The issue with this model, as I see it, is that companies become more and more brazen in their demands.  Businesses are conceived to make profit.  Demand is a major driver of profit.  If a business knows that a city is willing to cut innumerable keys to its gates in order to lure that business and its attendant carnival to town, why not ask for the moon? 

Apple, like any successful profit-driven enterprise, seeks deals when it makes capital investments.  I understand this.  That is capitalism.  Austin needs to be just as resolute in ensuring that the incentives it offers have reasonable expectations of garnering real gains for the city, its residents and their futures.  Apple expansion in Austin under mutually beneficial terms would be welcome.  Apple expansion with Apple lining its pockets while Austin laments unrequited adoration seems to be the more likely outcome.