
Schwab Leaves San Francisco for Texas - Reedx
https://www.wsj.com/articles/schwab-leaves-san-francisco-for-texas-11574900348?mod=rsswn
======
jonas21
This is part of Schwab's merger with TD Ameritrade. Relevant bits from
Schwab's FAQ [1]:

 _Q: Where will the combined company be headquartered?_

 _A: As part of the integration process, the corporate headquarters of the
combined companies will eventually relocate to Schwab’s new campus in
Westlake, Texas. Both companies have a sizable presence in the Dallas-Fort
Worth area. This will allow the firm to take advantage of the central location
of Schwab’s new campus as the hub of a network of Schwab branches and
operations centers that span the entire U.S., and beyond._

 _Q: What does the headquarters move mean for the future of Schwab’s presence
in San Francisco?_

 _A: Schwab was founded in San Francisco and has maintained a longstanding
commitment to the Bay Area, which will continue. A small percentage of roles
may move 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. Any additional real
estate decisions will be made as part of the integration process, over time._

[1]
[https://www.aboutschwab.com/announcement](https://www.aboutschwab.com/announcement)

~~~
hkmurakami
TD Ameritrade is headquartered in Omaha. The HQ location choice is not driven
by existing Ameritrafe footprint, or by the merger itself. The FAQ is simply
addressing what will be, not starting that there was a cause and effect
because of the proposed merger. Also, Schwab was already reducing SF headcount
for years.

Also, afaik the merger is still in the prices of regulatory review.

All this being said, the merger likely gives a tactical opportunity to move HQ
out of state without triggering a governmental review of some kind by pairing
it with the merger event.

~~~
cortesoft
Why would the government review a headquarters move?

~~~
jdavis703
It sounds like they'll be keeping a sizable amount of staff in SF still. SF
has a gross receipts tax on certain companies with HQ's in the city. As such
auditors will want to ensure this isn't just a tax avoidance gimmick. By
pairing this move with an acquisition Charles Schwab has a stronger defense
against such an accusation.

~~~
blackflame
When will the people of SF learn you cannot tax yourself to prosperity

~~~
jdavis703
The City & County of SF has the seventh highest median income of all U.S.
counties [0]. The GDP of the Bay Area ranks ahead of all but 16 countries [1].
If taxes are correlated with prosperity it'd seem as though SF had found a way
to tax itself to prosperity. (Of course in reality economics and tax policy
are far more complicated than this).

0:
[https://bea.gov/newsreleases/regional/lapi/lapi_newsrelease....](https://bea.gov/newsreleases/regional/lapi/lapi_newsrelease.htm)
1:
[https://web.archive.org/web/20171208145551/https://www.bea.g...](https://web.archive.org/web/20171208145551/https://www.bea.gov/newsreleases/regional/gdp_metro/2017/pdf/gdp_metro0917.pdf)

~~~
Nuzzerino
Your argument assumes the correlation, but you're arguing that the causation
exists without even establishing the correlation.

------
crwalker
As a San Franciscan, I am so happy to see this. SF needs negative feedback on
the poor choices it makes, and so far the tech boom has somewhat obscured the
consequences.

~~~
Reedx
Yeah. The longer you live in SF and the Bay Area, the more apparent it becomes
how much it skates on tech, history, and intrinsic advantages like the weather
and beautiful geography. SF in particular has such incredible resources that
it should be the most advanced city in the world.

~~~
opportune
But the people in San Francisco have got what they wanted. Maybe in 20 years
SF will be able to change but right now the majority of people are actually in
favor of the way the city is being run: to stay stuck in time as long as
possible

~~~
ergocoder
If I had most of my net worth tied to my SF house, I would be a NIMBY as well.
Don't blame them though.

------
seanmccann
> 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.”

Doesn't sound like they are leaving San Francisco, just building a new office
in Texas (suburb north of Fort Worth).

~~~
hourislate
From what I have read in the Local News, it is just the first phase. I am
assuming they will eventually move entirely but don't want to spook their
existing workforce in SF.

~~~
hkmurakami
They'll keep outside facing functions here for the local markets, clients,
partners, etc.

Corporate back office operations will move entirely

------
skybrian
This is better both for San Francisco and Texas, from a load-balancing
perspective. Unless housing can catch up, large companies shouldn't be
expanding in San Francisco.

~~~
zer00eyz
Housing and taxes in CA are close to oppressive. The housing situation will
not change unless CA voters agree to a change in property taxes and they
won't.

I would also bet that the move will come at the expense of Texas tax payers
and to the benefit of Schwabb.

~~~
TulliusCicero
Part of the problem with housing prices in California is that property taxes
are too low. Prop 13 means existing homeowners are shielded from higher
property taxes, so growing property values are only good for them, no matter
how high. Thus, there's no incentive to increase housing supply, which could
lower prices.

~~~
gilbetron
Whoa! Didn't even know about Prop 13 - that basically means no house can
currently have a higher taxable value than basically double what it was worth
in 1978. Insane!

~~~
pascalxus
It's worse than that. Those people with the very most equity gains, are paying
the least taxes relative to their house value. Those with the least equity
gain (like recent buyers), are paying the very highest taxes relative to their
house. It's basically like saying the person who earned over 1 million dollars
in equity gain pays far less taxes than the one who earned 10k in equity gain.
It's extremely regressive.

And, since home owners are incentivized to stay in the houses that they bought
a long time ago (whether or not it's convenient for them or not), it means
there's far less housing turnover, less supply and less opportunities for
everyone, and longer commutes which is terrible for the environment. It's a
disaster.

------
hourislate
For anyone interested here is the build out of their HQ on the Circle T Ranch
(Hunt Brothers owned it once) then Perot Jr bought it about 25 years ago and
is turning into a financial hub. Fidelity is there along with Deloitte and TD
Ameritrade just built a brand new complex about 1 mile away.

[https://goo.gl/maps/whA2nM9YYGka55P5A](https://goo.gl/maps/whA2nM9YYGka55P5A)

Schwab owns the whole corner there with plenty of room to expand, the Circle T
Ranch is around 2500 acres.

------
pjg
Am I the only one who thinks nobody is talking about the elephant in the room
? i.e. the cause and effect. Fintech companies like Robinhood have popularized
the concept of (a) zero fee trading and (b) better UI/UX and just better
service/offering on highly scalable platforms that allow them to introduce new
products/services, which are virtually impossible for legacy providers like
Schwab. Seems like that is the single most important cause of Schwab and
TDAmeritrade merger. Much like ~15 years ago when "Internet" based trading
companies forced the traditional "phone calling" brokers to either merge with
Internet upstarts or go out of business. Schwab survived the first wave of
disruption as it aggressively embraced into Internet based trading. There was
a wave of consolidation with other purely online trading companies e.g. Datek,
Scottrade etc. merged into what is now TDAmeritrade.

Seems like the traditionals haven't been able to survive the second wave of
disruption. This is what is prompting the merger i.e. if you can't grow like
the fintechs then cut costs using merger cost synergies. A side effect of this
is move from extremely high cost locales to lower cost ones. It's PR couched
in terms like "Any additional real estate decisions will be made as part of
the integration process, over time."

Good for San Fran and the bay area, it seems. Some prime corporate space being
vacated should take a little pressure off real-estate prices (I hope).

~~~
aloknnikhil
[https://www.schwab.com/public/schwab/active_trader](https://www.schwab.com/public/schwab/active_trader)

I don't think Robinhood can even compare to the tools offered by Schwab's
brokerage accounts. It's like r/wallstreetbets vs r/investing

I do agree that Robinhood was the first to make trading accessible to the
masses and pushed for zero-fee trading.

~~~
pjg
What percentage of the users at Schwab use the premium tools, my guess is
somewhere between 1-10% ? Does Schwab earn disproportionate revenue from them
? If yes, then I can see your point but as someone below points out most
brokerages make money off balances carried in the brokerage accounts. That
makes Robinhood (and the likes of it ) valuable since it's more about monthly
active users. My point is user base growth has been stagnant with traditional
brokerages, whereas fintech upstarts are on a tear. That combined with other
revenue vectors e.g. crypto trading, SIPC insured bank accounts etc. make it
difficult for traditional brokerages to compete

------
spectramax
I just moved to the Bay Area and I have no good opinions about living here.
It’s a 3 trillion dollar neighborhood that has broken infrastructure, an
abysmal housing situation, crime through the roof, homeless people everywhere,
traffic, outrageous costs and just generally an awful place to live. I don’t
know about the business side, but from an employee standpoint, fuck the Bay
Area. Oh, and my car got broken into twice, and someone asshat stole my
license plates.

~~~
demosthenes14
Sometimes I wonder if there’s a funded campaign against the Bay Area online.
Where do you live, and where did you come from? I just moved to SF and yes it
has homeless people, traffic and is extremely expensive, but these are things
that every other big city I’ve lived in has. The costs and homelessness are
worse than Seattle or NYC but not to the point that it’s a reduction in my
quality of life. To say you have “no good opinions” is so extreme. The area is
beautiful, has a rich history, amazing culture, food and art, and if you work
in technology has the best availability of jobs in the world.

~~~
slavapestov
> Sometimes I wonder if there’s a funded campaign against the Bay Area online.

By whom and to what end? Has it occurred to you that some people just don't
like living there? Not everyone you disagree with is a paid shill.

~~~
demosthenes14
It’s not just a matter of disagreement— take a look on here, Reddit and
Twitter and you’ll find a swarm of people making it seem like the Bay Area is
a dystopian hellhole. I was legitimately concerned about my move before I got
here.

~~~
CydeWeys
I agree that there's lots of people online who make exaggerated negative
claims about San Francisco, and my best guess as to why is that it's part of
the coastal/inland, liberal/conservative cultural divide/war. It's easier to
put others down than to fix your own mess, and frankly, California's economy
and social services are the envy of almost every other state.

------
gojomo
Once upon a time, "Go West, young man" was advice for "growing with the
country":
[https://en.wikipedia.org/wiki/Go_West,_young_man](https://en.wikipedia.org/wiki/Go_West,_young_man)

Now with California's anti-housing, anti-commerce policies & government deeply
captured by incumbent interests, better advice may be:

"Go East, growing company."

~~~
dmode
California companies capture >50% of VC investment. So, there are big headline
moves, but the underlying truth is California destroys every other state when
it comes to growth

------
jakozaur
SF Bay Area gets so expensive that even financial giants gets gentrified.

~~~
lykr0n
I would be curious to see the ROI for someone like Schwab for staying in the
Bay Area.

Does the reduce capital costs of people, taxes, and buildings outweigh the
talent pool in the area? Makes me wonder what the numbers look like.

~~~
Ozzie_osman
Yes. I'm building a distributed engineering team now (hiring people both
inside and outside the bay area). Everyone underestimates how much talent
there is outside the core hubs (Bay Area, Seattle, NY, etc). Yes, talent does
cluster in those cities, but they don't have a monopoly.

There are lots of smart, driven people outside the talent hubs. Also as a
sweeping broad generalization that I frankly can't back up with data, they are
a lot less entitled and don't job hop as frequently.

~~~
scarface74
Why do I have the feeling that “entitled” is being defined as “they ask for
lower salaries that allow the company to keep more of the money they make.”

~~~
Ozzie_osman
Well they do ask for lower salary (their cost of living is lower), and in my
case it's less about "keeping more of the money" and more about having a
bigger chance at building a successful product with the runway we have (being
an early-stage startup and all).

But that's not what I mean by entitled. Entitled is an attitude of thinking
one is special and thus deserving of special treatment.

------
nthomas
Welcome to the Lone Star State! Cheap real estate and friendly folks. And BBQ,
metric tons of BBQ...

~~~
aphextron
>"Cheap real estate"

And the highest property tax rate in the nation.

~~~
sdnlafkjh34rw
High property taxes are one of the most liberal policies of Texas. It's a
progressive tax that is largely shouldered by rich landowners and the revenue
form a large part of budget for public school systems.

I'm not sure why people in California love our regressive Prop 13 tax rebates
that largely benefit the wealthy and are a cause of huge budget deficits. Prop
13 is the most Republican policy we have in our state.

~~~
scarface74
If high property taxes are liberal - why wouldn’t high taxes on other forms of
wealth be beneficial?

~~~
sdnlafkjh34rw
When did I say high taxes on on other forms of wealth wouldn't be beneficial?
I totally support taxes on wealth to build social programs.

~~~
scarface74
Does that include taxing employee equity based on how it is valued based on
each round of funding?

Would you also be okay with taxing someone based on how much they had in
savings and mutual funds?

~~~
jogjayr
> Does that include taxing employee equity based on how it is valued based on
> each round of funding?

This already happens, except as a tax on income rather than wealth. Exercising
options in a private company that has increased in value will result in a tax
bill. And you can't sell shares to pay that bill (usually) because the company
is private.

~~~
scarface74
That’s exactly my point. Property tax is a tax on wealth. You are not taxed on
options until you exercise them. You also can’t sell part of your house to pay
taxes on it. You also aren’t taxed on the increase in your stock portfolio
until you sell it.

------
rahimnathwani
The largest US drug distributor said it's doing the same thing:

[https://www.sfchronicle.com/business/article/McKesson-
bigges...](https://www.sfchronicle.com/business/article/McKesson-biggest-U-S-
drug-distributor-to-move-13435748.php)

------
dmode
Companies move. HQ move all the time. This is a leverage that corporations
employ to maximize tax gains all the time. Don't know why it always makes some
sort of headline. Schwab and its leadership has been saying how they hate
California for a long time. So not surprising. And any HQ move out of CA is
often dressed as a political success story of a low tax state. Weirdly, I
would never see a story that says "$1 trillion worth of new wealth created in
CA, zero in Texas". I mean, this last year alone, with IPOs of Uber, Lyft,
Pinterest, Slack etc. we probably had $200bn worth of wealth generated. Now
taking into account the stock price inflation of Google, Apple, Facebook over
the last decade, and not to forget Tesla, Netflix, Nvidia etc. Nobody ever
uses those gains to comment on why a high tax state was able to generate this
much new business and wealth. Over the last decade, CA companies have
generated 50% of all VC capital in the US and Texas companies have generated
<5%.

------
austincheney
For some added perspective. Schwab already had several buildings in Westlake
before building the new campus, which is still under construction. TD
Ameritrade used to have a building in Westlake as well, but I think they gave
that up when they built their new campus in Southlake, about 3-5 miles away, a
couple years ago.

That is a huge finance footprint in one area. Consider also that one of
Fidelity's largest corporate campus is also located in Westlake. Westlake is a
tiny dot on the map with less than a 1000 people.

[https://en.wikipedia.org/wiki/Westlake%2C_Texas](https://en.wikipedia.org/wiki/Westlake%2C_Texas)

New Headquarters:
[https://www.google.com/maps/@32.9933674,-97.2120872,724m/dat...](https://www.google.com/maps/@32.9933674,-97.2120872,724m/data=!3m1!1e3)

Ameritrade campus:
[https://www.google.com/maps/@32.9774174,-97.1618883,512m/dat...](https://www.google.com/maps/@32.9774174,-97.1618883,512m/data=!3m1!1e3)

Fidelity campus:
[https://www.google.com/maps/@32.9828451,-97.1885764,609m/dat...](https://www.google.com/maps/@32.9828451,-97.1885764,609m/data=!3m1!1e3)

Also, the Deloitte campsus right new door is amazing. Its a 5 star hotel only
available for visiting Deloitte employees under going management training and
the food there is chef prepared and free to employees. I used to have a
subordinate in my part-time side job that worked there as a corporate
purchasing analyst.

For extreme shits and giggles look at the houses in Westlake either on a map
or in something like Zillow. While I understand a $3 million house around San
Fransisco is about 200sqft its quite a bit of purchasing power in Texas.

------
mikece
To where in Texas are they moving? The non-paid version of the WSJ article
doesn’t say. I keep hearing that in massive influx of tech companies to the
Austin area has driven up housing rates and congestion to absurd levels.
Probably won’t be long before tech companies skip Austin for cities like
Dallas, Houston, and San Antonio.

~~~
xyst
Companies won’t skip out on Austin. They would be missing out on top tier
talent from UT and surrounding schools.

Reason why Schwab is moving to Dallas (specifically Westlake) is because this
is determined to be the next financial district (a majority of financial
companies have satellite corporate offices in this specific area)

FYI: Schwab has had an existence in the 512 for some years now and in the
recent years expanded/consolidated to a new office

~~~
samfisher83
A large chunk of the kids who go to UT are from houston and dallas. Austin is
a really small city if you have been there. It would fit like in a quarter of
Houston.

------
slater
"The brokerage giant heads for a state that doesn’t punish finance"

opinion, indeed!

~~~
scurvy
Square is still in SF.....for now.

Stripe left/is leaving.

------
big_chungus
Posted four days ago when it was announced:
[https://news.ycombinator.com/item?id=21633593](https://news.ycombinator.com/item?id=21633593)

------
dbrowne
And who would want to live in some podunk town? Top talent live and work in
destination cities.

------
pasttense01
Some others articles which may not have a paywall:

[https://www.dallasnews.com/business/2019/11/30/schwab-is-
the...](https://www.dallasnews.com/business/2019/11/30/schwab-is-the-latest-
company-leaving-california-for-texas-and-it-wont-be-the-last-expert-says/)

[https://www.sfchronicle.com/business/article/Charles-
Schwab-...](https://www.sfchronicle.com/business/article/Charles-Schwab-to-
lose-SF-headquarters-in-26-14860683.php)

[https://www.bizjournals.com/sanfrancisco/news/2019/11/25/sch...](https://www.bizjournals.com/sanfrancisco/news/2019/11/25/schwabs-
moving-its-headquarters-will-other-s-f.html)

[https://riabiz.com/a/2019/11/28/schwabs-headquarters-
shift-t...](https://riabiz.com/a/2019/11/28/schwabs-headquarters-shift-to-
texas-amid-td-ameritrade-merger-seems-to-please-nobody-outside-the-dallas-
chamber-of-commerce-omaha-feels-especially-omitted)

------
rb808
I heard they have water and electricity out there.

------
guelo
You probably didn't hear a few weeks ago that Visa will vastly expand it's SF
headquarters. Since San Francisco is despised by conservatives we get this
constant schadenfreude highlighting of any SF bad news by people who need
their partisan views reinforced.

------
ausjke
It's said Texas vs California is like Capitalism vs Socialism. Clearly Texas
has won landslide and CA is on its way to hell, just thinking about breaking
into your car and stealing from store for under $900 will not be deemed as
crime makes me sick.

So many CA residents are moving to TX, in the hope of what?

Their first to-do item is to turn TX into CA, all those socialism and liberal
bullshit. They did the same to Oregon, Colorado, etc. It's epidemic.

I wonder why they stopped the initiatives to separate from US? I can't wait to
support their efforts. Please go away and leave us alone.

At least stop coming to TX please, we're doing fine, just don't come here and
ruin what we had.

~~~
AnimalMuppet
Why do people leave CA? Because they don't like what it's becoming. So they
move somewhere else. But it's not really what they want, either. What they
want is maybe 75% Texas, 25% California. So they try to move Texas, not all
the way to California, but in that direction. To the people in Texas, that
feels like "trying to turn Texas into California".

~~~
ausjke
People make the state as it is today, so those people are exactly the reason
what made CA is becoming. No they don't want to do just 25%, they want to own
it and do 100+% their way wherever they migrate to, it's called Stockholm
Syndrome. After they destroy a new place, they will move on to yet another
state, which is why I call epidemic.

~~~
AnimalMuppet
You're assuming that, in bulk, the people who leave are the same as the people
who stay. That's possible, but I suspect that it is not actually true.

~~~
ausjke
I deduced it based on all the people I know who moved from CA to TX, I can
tell you there are quite a lot of them. The pattern is quite obvious to me.
Over time I adapted to it somehow by reminding myself to stay absolutely
politically correct when I communicate with them, which also means, there is
no way to develop any friendship at all when you have to act like a
politician.

------
nickthemagicman
Why does Schwab still exist when there's free trading nowdays?

~~~
0xffff2
Schwab offers commission free trades now.

~~~
nickthemagicman
What does it offer then if it's no longer a brokerage?

~~~
mixmastamyk
Why do you think it’s no longer a brokerage?

------
Havoc
Why were they even in SF at all?

I mean unless you're in the tech scene & need the valley synergies the trade
off seems straight up bad

~~~
bsagdiyev
Because that's where they were founded in 1971, SF has a history before the
most recent tech bubble.

