California is arguably one of the most anti-business states in the country. The high taxes and high cost of living are why many business owners have flocked to neighboring states, like Texas and Arizona. There's no point in staying in a hostile environment when a business can set up shop elsewhere and not have the regulations and stifling taxes the Golden State does.
Speaker Nancy Pelosi's (D) home district in San Francisco is losing one of its oldest and largest employers, Charles Schwab. The company is merging with TD Ameritrade, currently headquartered in Omaha, in a $26 billion deal. And part of the merger includes relocating the Charles Schwab headquarters to the Dallas-Fort Worth area, the San Francisco Chronicle reported.
Although neither company is based in the Dallas-Fort Worth area, the high cost of doing business in San Francisco is one of the largest driving forces behind the relocation.
The company said Monday that “a small percentage of roles may move from San Francisco to Westlake over time, either through relocation or attrition. The vast majority of San Francisco-based roles, however, are not anticipated to be impacted by this decision. Schwab expects to continue hiring in San Francisco and retain a sizable corporate footprint in the city.”
Charles Schwab's new Fort Worth location will eventually have 1.2 million square feet once multiple phases of construction are completed, Dallas News reported. The campus will span 70 acres of land and house roughly 6,000 employees.
Dallas Regional Chamber President and CEO Dale Petroskey has continually encouraged the company to relocate to the area.
"We’ve visited Schwab’s headquarters in San Francisco while on California corporate recruitment missions, and provided strategic support to Schwab in 2016 as the company considered a major campus at Circle T Ranch,” Petroskey said in a statement. “We’re confident that Schwab’s positive experience here since the 2016 campus announcement contributed greatly to its decision to choose D-FW for its headquarters."
Not only is San Francisco losing jobs, but it's also missing out on the tax revenue from the company.
“We’re deeply disappointed about it,” Jay Cheng, public policy director at the San Francisco Chamber of Commerce, told the Chronicle. “We probably will lose significant taxes.”
According to Cheng, the city's "unpredictable tax policy, high housing and office costs, transit problems, and challenges around homelessness and crime are driving away businesses."
Charles Schwab is the most recent long-established company to pack its bags. McKesson, one of the largest medical distributors, moved to Texas last year, and the engineering firm Bechtel relocated to Virginia.