Apple Valuation Correction

Property Valuation Correction on Apple Property

The City of Waukee has an economic development incentive agreement with Apple for data centers that was signed in 2017. The economic development agreement includes a 20-year tax abatement for property taxes on the buildings only. That means that Apple's property tax bill is based upon a minimum taxable value of $52.2 million per data center for the first 20 years. When Dallas County calculated the valuation for Apple’s property for this fiscal year, it did not apply the abatement to reduce the valuation of the buildings.

How does this affect Waukee?

That valuation error for Apple’s property made the valuations for the City, County and School District higher than they should be, which affects projected revenue from property taxes. The valuation was corrected to include the tax abatement. This means the actual revenue for City of Waukee, Waukee Community School District and Dallas County from property taxes will be lower than we planned for this fiscal year.

It’s an unusual and unfortunate situation, but we are thankful that Waukee is in a good financial position and will be able to adjust. The City will have $3.4 million less than planned, but this will not affect our operating budget and the services and programs you get from the City. It is making us re-evaluate timing for infrastructure projects in our Capital Improvement Plan. We review this plan annually to make adjustments for funding, changing priorities and other factors. We don’t yet know exactly which infrastructure projects, such as road improvements, might be pushed out or changed.

This will not affect future budget years, and we will continue to work with Dallas County to ensure a similar valuation error does not happen again.

Why do economic development incentives matter?

Economic development packages matter to all taxpayers. Incentive programs draw big investments that expand the commercial tax base for Waukee. It helps a developer or company choose Waukee over locating in another community or state. The projects that come from economic incentives come with long term benefits to the community, such as commercial property tax revenue, job creation, infrastructure improvements and/or public amenities. Widening the tax base, especially with commercial properties, helps offset the tax burden for residential property taxpayers by spreading out the costs of running a city.

How does the Apple agreement benefit Waukee?

The City of Waukee signed an economic development incentive agreement with Apple for data centers in 2017. The City and Dallas County then signed a minimum assessment agreement with Apple in 2023 to establish the minimum valuation for each data center for the abatement period. The development agreement also involves Apple’s commitment to creating at least 50 high quality jobs that meet the requirements for a state incentive program. In addition, building the data center structures themselves brings construction-related jobs to our community. Each data center will be taxed on full valuation once the tax abatement period ends, so this project will be an important contributor to property tax revenues that fund many important services for the Waukee community long into the future.

In the shorter term, Waukee has benefited from the Public Improvement Fund established as part of the development agreement. This helped us fund major projects, like creating Triumph Park, which is an economic driver with all the tournaments it hosts in addition to being a frequently used community amenity for residents to walk, bike, fish and play on the huge inclusive playground.

While this valuation error is a notable fiscal concern for the school district this year, the Apple project will have long term benefit for students. Commercial valuation benefits the school district with added valuation and property tax revenue that doesn’t add more students to serve. Today, this agreement adds more than $50 million in valuation when calculating property tax revenues, but it may become a higher valuation when the incentives expire, which would bring more dollars to the school district.