LOS ANGELES—Toyota Financial employees may have the most to gain from the major move to Texas. Yesterday, GlobeSt.com reported that the car manufacturer plans to move its North American headquarters office from Torrance, CA, to the North Dallas, TX, city of Plano.
According to NCAP‘s state tax calculator, employees could save anywhere from thousands to millions of dollars in the move. NCAP uses the example of a 30-year-old, single renter who earns $75,000 at Toyota. Moving to Texas would earn this employee $14,909 in annual discretionary income, amounting to 1.5 million over a lifetime. Married, 40-year-old homeowners earning a combined $150,000 per year would earn $2,535 in annual discretionary income, amounting to $209,000 over a lifetime. “The main focus of Toyota’s announcement has been on the company’s savings but there’s also a story here about the impact on Toyota workers who make the move,” says Pamela Villareal, a senior fellow at NCPA.
The Los Angeles market, on the other hand, won’t come out of the deal so lucky. Although Toyota will not move for another three years, during which time it is building a new facility in Plano, the South Bay market may feel an immediate impact. “Investment sales, equity allocation, financing and appraisals will be impacted immediately in the South Bay—especially in the Central Torrance and the 190th Corridor submarkets,” Mark Mattis, PM Realty Group SVP, tells GlobeSt.com. “The Toyota USA campus has significant, contiguous acreage, which is difficult to find in Los Angeles County, but ultimately the site’s highest and best use will be for logistics given the high demand for such space and it’s proximity to the Ports, freeways and the Alameda Corridor.”
Toyota currently occupies a space of over 2 million square feet in 15 buildings. It is unclear at this point how much space they plan to vacate as they are leaving a regional sales presence in the area. “It will be interesting to watch what will be the City of Torrance’s efforts to attract a site user and/or consider an alternative use of the property,” Mattis explains.
Toyota isn’t the first company to opt for a move to Texas. GlobeSt.com reporter Natalie Dolce has been following the battle between the states. In a recent story, Kish Rajan, director of the CA Governor’s Office of Business and Economic Development, said that relocations only account for .03% of annual job losses in the state. But others believe that California is becoming an unattractive place to own a business. “Will Sacramento finally address business flight from California,” asks Mattis. “If Nissan‘s leaving for Nashville a few years ago didn’t ‘drive home’ the point that California needs to attract and maintain businesses—maybe Toyota USA’s will.”