Apple pausing plans for East Coast hub at Research Triangle Park, still 'deeply committed' to area

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Tuesday, June 25, 2024
Apple pausing plans for East Coast hub at Research Triangle Park
Wake County officials and business leaders expressed confidence the project would eventually come to fruition.

RESEARCH TRIANGLE PARK, N.C. (WTVD) -- Apple has reportedly paused plans for its East Coast hub at Research Triangle Park.

In 2021, Apple announced its plans for a $1 billion East Coast Hub at RTP.

In May, ABC11 learned that the project appeared to be in a holding pattern.

"Apple has been operating in North Carolina for over two decades, and we're deeply committed to growing our teams here," the company said in a statement to ABC11. "In the last three years, we've added more than 600 people to our team in Raleigh, and we're looking forward to developing our new campus in the coming years."

The new campus is supposed to be located along Little Drive in Morrisville.

Our newsgathering partners at the News & Observer reported on Monday that Apple paused development of its $552 million RTP campus as it seeks to push back the construction timeline in the state. Apple has asked the state to push back the timeline of its incentive deal by four years, according to an N&O source.

"I think the time is always good, but sooner than later because I think the revenue you get, the jobs you create, the ripple effect in the economy is going to put the dollars in the coffer for our towns," said Morrisville Council Member Steve Rao.

Rao acknowledged his disappointment at news of Apple's delay, a feeling that contrasts with his overall excitement of attracting the blue-chip company to Research Triangle Park.

"When you have a market leading company like Apple coming in, that's going to spur innovation," said Rao.

Apple's push to pause its development at the site could impact further investment in the short-term.

"I am concerned that their delay could affect a startup from wanting to move their operations here," Rao explained.

"I have spoken with officials at Apple and they emphasized their commitment to build this transformative campus here in North Carolina," Gov. Roy Cooper said in a statement to ABC11. "Apple has already hired more than 600 people in the Triangle for this project and continues hiring for what will ultimately be among the company's most significant campuses."

The project is expected to create at least 2,700 jobs.

Wake County officials and business leaders expressed confidence the project would eventually come to fruition.

"Wake County has proven time and again to be a great destination for businesses of all sizes, and we're delighted that Apple is expanding its teams and building a new campus here," Wake County Commission Chair Shinica Thomas said. " Apple's commitment to our state, and the job creation and investments already underway, will deliver long-term economic benefits across our community."

"My expectation would be since Apple is delaying, if there had been plans already set by supplier firms related firms, etc., for investments in RTP or around RTP, those would probably be put on hold," said Dr. Michael Walden, a Professor Emeritus of Economics at NC State.

Walden believes the move by Apple is not a reflection of Research Triangle Park's attractiveness, but rather an instance of the company's respective business strategy.

The project is expected to create at least 2,700 jobs.

"It seemed to me that RTP is becoming more attractive because they're now expanding, allowing some retail and residential development. You drive out I-40, you can see all that," said Walden.

Instead, he believes the growth of AI, and the difficulty of fully grasping the size, scale, and speed of the market, are more likely behind the request.

"My explanation is that this is internal to Apple and their decisions about how fast to move on AI, where they want to go with AI, how successful they will be with AI and apparently the answers to some of those questions, at least temporarily or negatively, that they perhaps are not going to be able to move as fast. They are trying to assess the competition, trying to figure out where things are going. In that sense, this is not unusual," said Walden.

"The technology uncertainty is one thing that's a driver. Another thing that's a driver is regulatory uncertainty," said Steven Allen, an Economics Professor at NC State's Poole College of Management.

Allen pointed to the general trend in the tech industry which saw major hiring in the immediate aftermath of the COVID-19 pandemic, a pattern which has largely dissipated.

"I think clearly the people who are in charge of the real estate part of this deal and the people who were counting on the employment projections are pretty upset. We're not talking about a 60-day delay because permitting in Wake County is a little bit slow. As you said, we're talking about a significant four-year delay," Allen explained.

While emphasizing the region's strengths, from business climate to local talent, Allen agreed that Apple's presence alone would be a key tool in future efforts to draw other companies.

"The area is going to be fine, but it would be a lot easier for the Governor to recruit more tech companies if he knew Apple was coming in a year-and-a-half instead of four years (later), we hope," said Allen.

Paperwork that ABC11 obtained in December 2023 suggested that construction would start in 2026.

"Research Triangle Park is a great home for so many companies, and we're thrilled that Apple will be among them," RTP CEO Scott Levitan said. "Having a company of Apple's stature investing here is a great endorsement of everything RTP offers."