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Charles Schwab, TD Ameritrade to move combined companies' headquarters to Texas

KETV Omaha logo KETV Omaha 11/25/2019
a sign on the side of a building: Online brokerage TD Ameritrade is celebrating its new $250 million headquarters building in Omaha that's making it easier for employees to collaborate and keeping the company's energy bills manageable. © Provided by Hearst Television, Inc. Online brokerage TD Ameritrade is celebrating its new $250 million headquarters building in Omaha that's making it easier for employees to collaborate and keeping the company's energy bills manageable.

Charles Schwab announced Monday it would acquire rival stock brokerage TD Ameritrade in an all-stock deal worth $26 billion.

As part of the transaction, the combined companies expect to move their headquarters to the Dallas-Forth Worth area.

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Charles Schwab has been headquartered in San Francisco since its founding in 1971, while TD Ameritrade is based in Omaha, Nebraska.

“We're deeply disappointed about it,” said Jay Cheng, public policy director at the San Francisco Chamber of Commerce. “We probably will lose significant taxes.”

Schwab has been building a massive campus in Westlake, a northern suburb of Fort Worth, with room for up to 7,000 employees.

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.”

Founded by Sacramento native Charles Schwab, the company joins a wave of older corporate titans fleeing San Francisco. Medical distributor McKesson, one of the largest companies in the world by revenue, moved its headquarters to Irving, Texas. in the past year. Bechtel, the engineering firm that built BART, also left San Francisco.

Cheng of the Chamber of Commerce said San Francisco's unpredictable tax policy, high housing and office costs, transit problems and challenges around homelessness and crime were driving away businesses.

Company founder Charles Schwab personally donated $100,000 to oppose 2018’s Proposition C, which raised the city’s gross receipts tax on large companies’ revenues above $50 million to help fund homelessness services. The measure passed. Another major Prop. C opponent, payments processor Stripe, said last month it will move its headquarters to South San Francisco, citing the lack of office space.

California's corporate tax rate is 8.84%, and San Francisco has additional gross receipts and payroll taxes, while Texas has a 1% gross receipts tax on corporate income over $1 million. Westlake, where Schwab is moving, has no additional corporate taxes, said Ginger Awtry, the town’s director of communications and community affairs. Texas also doesn't have personal income taxes.

Awtry said employers are attracted Westlake because of its picturesque rolling hills and open space, along with easy access to Dallas-Fort Worth International Airport.

“They exhale when they drive into Westlake,” she said. “It's a little oasis.”

The affluent suburb has a median home price of $1.8 million — even higher than San Francisco, she said. But housing costs are far lower in the Dallas area, with the average apartment costing $1,224 per month, according to listings website Rent Jungle. San Francisco's average rent is $3,870, according to Rent Jungle.

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