Texas is out-competing every state in the race for California company relocations

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According to a study published Tuesday by Spectrum Location Solutions of McKinney and the Hoover Institution of Stanford University, Texas claims California headquarters more than four times as much as its nearest competitor.

The Lone Star State won 114 California corporate relocations from January 1, 2018 to June 30 this year, 89 more than Tennessee, which had the second-highest number of wins during that period.

Forty-one of these companies planted corporate flags in North Texas. The Austin area claimed 57, Houston got nine, and the San Antonio area attracted six.

The study authors Joseph Vranich and Lee Ohanian named high taxes, strict regulatory policies and rising energy and utility costs as factors contributing to the exodus of California.

“Moving a company to Texas feels calm and secure,” said Vranich, a longtime critic of the California business environment who moved his own company out of the state in 2018. “The rules themselves aren’t bad. But with some stability knowing what they are and how much they could change, that stability is evident in Texas. “

North Texas has welcomed dozens of high profile companies from major West Coast metropolitan areas over the past few years, including engineering giant AECOM, which last week announced the relocation of its headquarters from Los Angeles to Dallas.

Other recent moves from California to Dallas include military-grade eyewear maker Wiley X, financial services company First Foundation Inc., and mobile infrastructure consulting firm MD7 LLC.

The COVID-19 pandemic provided an ideal exit for companies looking to leave expensive cities like LA, San Francisco, and New York City. According to data from the Dallas Regional Chamber, there were almost 70 relocation and expansion announcements in the D-FW area in the past year. So far this year there have been 50.

This trend shows no signs of slowing down. In the first six months of 2021, the number of headquarters relocated from California was twice as fast as in previous years.

According to the Spectrum study, high energy prices have proven to be important for businesses. While Texas ranks 29th in the midfield for commercial energy prices, it far surpasses California, which ranks 48th. California’s average commercial energy price was $ 17.20 per kilowatt hour in March, compared to the average price in Texas of $ 10.41.

“For certain facilities, you’ll likely cut your electricity bill in half,” Vranich said.

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