Fifty-four Fortune 500 companies make their corporate headquarters in Texas.
From AT&T and ExxonMobil to Clear Channel and Texas Instruments, they’ve chosen to grow their business in Texas because of all the things that the Lone Star State affords them: no corporate income tax; no individual income tax; one of the lowest overall tax burdens in the nation; and — as of 2008 — a reformed margins tax that lowered the primary franchise tax rate to 1 percent on gross receipts for most taxable entities, and 0.5 percent for retailers and wholesalers.
This means that every time a business puts a Texan to work, pays for health insurance, or invests into a pension plan, the tax liability of that business decreases.
Factors like this are a big reason why the readers of Site Selection magazine consistently rank Texas as having the most favorable business climate in the US.
They’re also why companies, workers and entrepreneurs keep relocating to Texas. According to data from the Internal Revenue Service, the number of Californians leaving the state and moving to Texas is at its highest level in nearly a decade. Some 33,626 Californians moved from California to Texas between 2013 and 2014, taking $2.19 billion in adjusted grow income with them.
In addition, four of the top 20 fastest-growing large cities in population in the US are Texas metro areas: Austin, Houston, Dallas-Fort Worth and San Antonio.
With credentials like this, it’s no wonder that companies continue to expand their headquarters in Texas. Recently, Texas Wide Open for Business caught up with four of them: Farmer Brothers in Fort Worth; Conifer Health Solutions in Frisco; and First Data TeleCheck and Schlumberger in Sugar Land.
All four of these firms have either expanded their headquarters recently or are in the process of expanding. When we asked executives representing each firm to explain their decision, here is what they had to say:
Mike Keown, CEO of Farmer Brothers: “We are investing $65 million to establish a 540,000-sq.-ft. headquarters in the City of Northlake next to Fort Worth. It will house marketing, sales, accounting, our coffee-roasting R&D and a distribution center. The Fort Worth Chamber has been incredible to work with on this deal. They went above and beyond. This project began when we set out to explore leaving Torrance, California. We asked ourselves, how do we attract the talent we will need to grow in the future? We needed access to a great airport and a great port. We wanted a reasonable cost of living where it would be affordable to raise a family. We narrowed our search down to eight to 10 locations in Texas and a few other states. Incentives were not that important. The workforce was very important. We are thrilled with the quality of workers in the Fort Worth area. Upon completion, we will employ 300 to 350 people here. We plan to be open by the end of the year.”
Sharon Lakes, Senior Director of Communications for Conifer Health: “We have made our headquarters in Frisco since we were formed as a company in 2008. We employ about 1,500 people in Frisco, and we moved into our new headquarters building here in March 2014. We chose this location because it is very easy to navigate here with great highways and really great access to DFW Airport. There is a well-educated workforce in this community, and the city itself is very desirable. Proximity to great schools and shopping is a plus. We feel like Frisco is living a charmed existence. It is enjoying high-quality growth with high-quality companies. A lot of other healthcare companies are located along this Platinum Corridor north of Dallas. We add to our total employee count almost daily, and we plan to keep on growing right here in Frisco for a long time to come.”
Michael Lateur, Duff & Phelps LLC (site consultant for Schlumberger): “The new headquarters project in Sugar Land was the result of a unique partnership and collaboration between the company and the City of Sugar Land. Their ability to respond to our needs and a great existing site sealed the deal. It is a terrific site just off Highway 59 South, and it includes more than 500 jobs. We met with other communities in the Houston area, but the city and the county here were tremendous in their efforts to work with us. Sugar Land offers a highly educated and diverse workforce. We also looked at economic development incentives in our analysis. In the end, it made the most sense for Schlumberger to build its new headquarters right here in Sugar Land.”
Randy Ly, Vice President of First Data TeleCheck Risk Management: “We were looking at a number of competitive locations in the Houston area. We looked at commuting pathways, amenities on site, and several other factors. The City of Sugar Land offered us a very competitive incentives package to relocate our corporate headquarters from downtown Houston in the Galleria District. We had initially looked in a 15-mile radius factoring in Zip Code plots for all of our employees. We took into account the inventory of real estate and its price point. We ultimately chose the Southwest Freeway site in Sugar Land. We moved into 85,749 sq. ft. of space there about a year ago. We have over 500 employees there today. Sugar Land offered a well-educated and available workforce and demographics for our business, plus excellent parking. Sugar Land has been very welcoming to us. All of our interactions with the city have been positive.”