NC nearly landed an Apple campus in 2018. Details of the incentive offer remain secret
For more than two years, Gov. Roy Cooper’s administration has refused to release a single page of records related to the state’s attempts to land a new Apple campus in Research Triangle Park — a potential deal worth millions of dollars in incentives for one of the world’s wealthiest companies.
North Carolina was widely rumored in 2018 to be in the running as the location for Apple’s new facility, which brought with it the prospect of thousands of high-paying tech jobs and millions in investment.
Cooper, a Democrat, reportedly met with CEO Tim Cook early that year. And Republican leaders in the state legislature over the summer pushed through changes to North Carolina’s incentive programs ahead of a “major jobs announcement” they declined to specify.
On Dec. 13, 2018, Apple announced its new campus would go to Austin, not RTP.
But the details of what North Carolina offered the tech giant remain shrouded in secrecy. Officials from the governor’s office and the state commerce department say recruitment of Apple remains an “open” project, and they’ve used that designation to deny related record requests for two years straight.
Their stance concerns open government advocates and watchdog groups, who say the state’s position runs counter to the spirit of transparency and undermines public trust. And they also raise doubts about whether North Carolina really is in the running for a new Apple expansion on the scale of its site in Austin.
“The law seems to be pretty clear that once a project is no longer viable, the interest in privacy or confidentiality subsides,” said Brooks Fuller, director of the N.C. Open Government Coalition at Elon University. “I think we’ve reached that point.”
‘No change’ in project’s status
During negotiations, at least, details of economic incentive offers to companies looking to relocate or expand in North Carolina are largely off-limits from disclosure under state law. But that secrecy is not indefinite.
Once government officials or company leaders announce a commitment in the state — “or the business has made a final decision not to do so” — North Carolina’s open records law makes related documents public.
Such records provide insight into the public funding and resources state and local officials offer up to companies, some of them the largest and most well-capitalized on the planet.
After North Carolina lost its high-profile bid for Amazon’s second headquarters, for example, documents obtained by The News & Observer revealed state and local governments were willing to pay the corporation $2.2 billion in incentives over two decades if the company added 50,000 jobs to Triangle region.
Responding to renewed requests for documents related to Apple, though, Cooper spokesperson Ford Porter told The News & Observer this week that he had no new information to share.
“The Department of Commerce has not closed a project and does not comment on open project recruitment efforts,” Porter wrote in an email.
Department of Commerce spokesperson David Rhoades said there was “no change in status to report at this time,” and did not respond to a request to interview Commerce Secretary Tony Copeland. Copeland recently announced he would leave as head of the agency in 2021.
Neither the governor’s office nor the commerce department provided any additional information on the status of the project. And neither offered any legal justification for the secrecy.
They also left unexplained what — if any — active recruitment is actually ongoing in the negotiations between the state and Apple.
“The Governor and Department of Commerce will continue to work aggressively to bring good new jobs to North Carolina,” Porter said in response to follow-up questions. “While Commerce policy is to not comment on ongoing recruitment efforts, the state will continue to release records when projects are either announced or closed.”
Not just Apple; Amazon also recruited
It’s unclear what triggers a project to “close.” Amazon’s new location announcement, much like Apple’s Austin decision, came directly from the company. And Copeland told the N&O in 2018 that Amazon never formally told state officials they wouldn’t land the project.
“We don’t comment on ongoing recruitment efforts,” Rhoades said. “But in general, we deem a project to be closed when a company informs the Department that a decision has been made or if the Department is able to determine that a project is no longer active.”
He also pointed to an article from The Triangle Business Journal, which reported earlier this month that 180 projects are active across the state.
There’s been little public activity on the Apple matter at all since about a week after company’s Austin announcement, when a firm called Acute Investments LLC acquired seven parcels totaling more than 280 acres straddling Highway 540 in Research Triangle Park. Listed in the deed information is Bruce Thompson, an attorney at Parker Poe registered to lobby for Apple in North Carolina.
Both Thompson and representatives from Apple did not return calls and emails seeking comment.
Officials in Wake County, where the properties lie, also denied requests for records related to any local efforts to recruit the company. Spokesperson Alice Avery said, “this is still classified as an open project at the Department of Commerce, so the county’s position has not changed.”
Cities and counties, which often grant additional incentives on top of state programs, are also subject to North Carolina public records law.
NC’s explanation ‘doesn’t pass the laugh test’
In Texas, meanwhile, construction on Apple’s new campus has been ongoing since the company broke ground in December 2019.
And it’s lately accelerated, says Nate Jensen, a professor of government at the University of Texas at Austin who studies incentives and economic development across the country.
“That deal is done, just in case there’s any question about that,” Jensen said.
He said he’s seen a similar lack of transparency around other big offers and deals in communities that have tried to lure major headquarters for both Amazon and Apple. Although he’s not surprised by North Carolina’s position, he said the secrecy is particularly troubling given the tech giant’s power.
“I do worry that it’s a slippery slope,” Jensen said. “You can claim every incentive to a major company is ongoing.”
When public officials promise economic incentives in North Carolina, it can mean millions in rebates companies can earn back if they hit hiring targets. The deals also allow state and local leaders to claim credit for the jobs created.
But Good Jobs First Executive Director Greg LeRoy, whose watchdog group tracks subsidies and is often critical of state and local incentives, said there’s an imbalance with these programs weighted heavily in favor of large businesses.
“They have too much power, and we need public officials to have a stronger hand at the poker game,” LeRoy said. “The way they have more power is if there’s more public information available.”
The Cooper administration’s explanation regarding the new campus deal “just doesn’t pass the laugh test for us,” he said.
“Whether there’s something else Apple might want to do later in North Carolina, we have no way of knowing,” LeRoy said.
How JDIG funds can lure large companies
Kasia Tarczynska, a research analyst at Good Jobs First who focuses on North Carolina and other southeastern states, said economic development here has experienced a radical shift in strategy over the last three decades.
It started in the 1990s, when then-Gov. Jim Hunt lost a high-profile bid for a new Mercedez-Benz plant to Tuscaloosa, Ala. What followed were several iterations of tax incentives and discretionary programs aimed at enticing relocation and expansions big and small. Most recently in 2018, state legislators revamped one of North Carolina’s largest funds — the Job Development Investment Grant.
Their changes lowered the threshold for so-called “transformative projects,” allowing more companies to qualify. And if companies hit their hiring targets under the terms of those transformative deals, they stand to recoup nearly every cent their new employees pay in state income taxes for up to four decades.
Commerce departments under multiple administrations — Democratic and Republican — have defended the JDIG program as necessary to compete with other states for jobs. And when those jobs are high-paying, quality ones at big manufacturing plants or tech headquarters, they can have positive impacts that ripple through the larger state economy.
But the quests for bigger projects, Tarczynska said, have come at a cost.
“Now North Carolina has been all about getting at least one giant deal,” Tarczynska said. “The process doesn’t matter, and the consequences don’t matter.”
To Fuller at the Open Government Coalition, the Apple case highlights a weakness in North Carolina’s public records law. And if the stakes of these intrastate battles for jobs continue to climb, he said it might be time for the General Assembly to boost transparency as well.
“We clearly have a piece of the public records law that, because of the rhythm of business, actually doesn’t work,” Fuller said. “Maybe we should take a look at it.”
This story was originally published December 16, 2020 at 6:00 AM with the headline "NC nearly landed an Apple campus in 2018. Details of the incentive offer remain secret."