Apple’s massive new spaceship-style headquarters in Cupertino is not on-budget or on schedule, according to a new report at Bloomberg Businessweek. The article provides an inside look at what exactly the project requires, down to specific standards around the perfection of surface finishes put in place by Steve Jobs. Blowing past budgets with building projects is pretty much guaranteed, but Apple’s has reportedly added an additional $2 billion to an already high $3 billion projected spend.
The new Cupertino HQ has been in development for a while, after originally being shown off at a city council meeting in June 2011, where Jobs announced his plans to local government officials and community stakeholders. The campus design has undergone some minor revisions since then, but remains largely intact with the original vision shown off in renders nearly two years ago. But Apple’s particular requirements mean that its budget has ballooned, at a time when as Businessweek notes, investors in the company are looking closely at what Apple is doing with the cash pile it’s sitting on.
Investors are looking to unlock more of Apple’s cash by way of dividends, and the stock price itself has fallen 38 percent since last September. Still, the company has massive cash reserves, which hit a high of $137.1 billion when Apple reported its quarterly financial results back in January.
The Businessweek profile details Apple’s plans and why they might be so expensive: Apple isn’t, for instance, adhering to the standard level of quality for fit and finishes. Even for structural elements like concrete supports, it’s requiring that things have unbroken surfaces and hide juncture points, reflecting its practices with regards to electronics. The report suggests that some of these particulars around the finer details might be where Apple turns to start cutting back, in order to peel back $1 billion from the current $5 billion budget before beginning construction.
The good news is that once it does get underway, construction should move along at a fairly rapid pace, thanks to the decision to use pre-fab modular components. This will allow builders to truck in fully-finished office units, bathrooms, closets and more, which are built offsite and then slotted into place in the final complex. That should cut total build time to two years, down considerably from the three to five it would taking using traditional building methods. Still, Apple also appears to be asking contractors to work for less money than the standard going rate for big projects like this according to Businessweek’s sources, something it suggests could keep potentially labor and trade supply away.
Apple’s spaceship looks to be one of the most ambitious building projects ever undertaken, especially for a corporate HQ, but based on this report, it’ll still be a while before we say it take off.