DALLAS–As GlobeSt.com reported last week, Toyota Financial Services has plans to move its corporate headquarters from Torrance, CA, to Plano, TX. Toyota’s move secured the company $40 million from the state through the Texas Enterprise Fund.
“Over the past decade, Texas and Toyota have developed a strong partnership that has resulted in good-paying jobs for thousands of Texans,” said Governor Rick Perry in a statement. “Toyota understands that Texas’ employer-friendly combination of low taxes, fair courts, smart regulations and world-class workforce can help businesses of any size succeed and thrive. We’re proud that both the Tundra and Tacoma bear the words ‘Made in Texas,’ and we’re excited our state will be the nexus for Toyota’s North American operations moving forward.”
Over the next two years, Toyota will build a state-of-the-art facility in Plano, with the project breaking ground this fall. Once the building is complete, Toyota will begin relocating up to 4,000 employees.
While this move is considered a blow to California, locals are thrilled with what Toyota’s relocation means for the state of Texas, and Dallas specifically.
“It is seen as another page in the Texas growth story,” John Turner, principal at Rockstreet Partners, tells GlobeSt.com. “This is a trend that may continue for some time.”
Texas’ pro-business climate has encouraged a number of companies to relocate or expand within the state. State Farm‘s corporate campus, ExxonMobil‘s huge project and even the latest announcement that Prudential Financial will build a business and technology services center in El Paso, TX.
“As compared to California, Texas offers lower taxes, less regulation, and a cheaper cost of living. It is also a right to work state, which is important to manufactures like Toyota,” Turner says.
For Plano, the Toyota move will have a transformative effect – similar to what Houstonians are seeing around the ExxonMobil campus, as well as what is happening around the State Farm corporate campus.
“I think this is one of those big dominos to fall and the repercussions will be far reaching,” David Pinsel, managing director for Colliers, tells GlobeSt.com.
The single family and multifamily housing markets will be the first to see a surge in development, especially considering the North Dallas submarket has low housing inventory. But soon retail and office will begin to follow.
“The immediate impact is that you will see more accelerated multifamily, retail and office development over the next one to three years to help accommodate the growth,” Mike Wyatt, executive vice president at Cushman & Wakefield, tells GlobeSt.com. “Real estate values and office rates will continue to rise as the supply of readily available space diminish.”
The submarket is already popular among businesses.
“The Plano Submarket is very hot and started its recovery in 2012. Companies want to do business in Plano and especially love the amenity-rich Legacy Business Park,” Wyatt says.
Legacy Business Park is a master-planned, 2,665-acre mixed-use development in northwest Plano. The space already serves as the corporate or regional headquarters for a number of companies including HP Enterprise Services, JCPenney, Frito-Lay, Dr Pepper Snapple Group, Rent-A-Center, Bank of America Home Loans, Ericsson, Capital One Auto Finance, McAfee, PepsiCo and Intuit.
“In the long run I believe that this relocation will be a catalyst for future relocations not only from California but other less business friendly states and communities. It will serve as a case study for companies now contemplating moves,” Wyatt says.
As a Southern California native and someone who now lives and works in the Dallas area, Pinsel agrees.
“I think this will be an eye-opener for companies in states that aren’t as business friendly,” Pinsel says, adding that the California business environment is flawed and it is likely to take at least a generation to right things. In the meantime, “I think Texas will be a major beneficiary.”