(Photos: Bloomberg/Shutterstock; Image by Chris Nicholls/ALM)

As part of Charles Schwab’s $26 billion purchase of rival TD Ameritrade, the combined firm plans to move its headquarters to Texas from California, as it looks for ways to cut costs in light of its move to embrace zero commissions and gobble up a sizable competitor.

Schwab, which has large offices in both Austin and Dallas-Fort Worth, says that its new campus in Westlake, Texas — near DFW — is the preferred site of its new headquarters. “Both [Schwab and TD Ameritrade] have a sizable presence in the Dallas-Fort Worth area,” the firm explained in a press release last week.

“Huge news: Charles Schwab is moving its headquarters to Texas. The Dallas-Fort Worth area in particular is becoming a financial sector behemoth. Texas, in particular, is a jobs juggernaut,” said Texas Governor Greg Abbott on Twitter.

If approved by regulators, “Schwabitrade” integration could take 18 to 36 months. COO Joe Martinetto is set to oversee this process.  

(Related: Why Schwab-TD Deal Is All About Assets First, Advisors Second)

Schwab was founded in San Francisco in 1971 by Charles Schwab. Joe Ricketts and three partners opened First Omaha Securities — the predecessor firm of TD Ameitrade — in Omaha, Nebraska, in 1975.

The new entity is likely to keep many current roles in the Bay Area. “A small percentage of roles may move from San Francisco to Westlake over time, either through relocation or attrition,” according to Schwab. “The vast majority of San Francisco-based roles, however, are not anticipated to be impacted by this decision.”

Unlike California, Texas does not have a corporate or individual income tax. The state does impose property taxes and gross-receipts taxes.

Data recently compiled on state taxes/fees on income, property, sales, fuel, wireless services and “sins” like alcohol and tobacco found that Texas ranked 33rd and California 36th out of the 50 states and Washington, D.C, according to HowMuch.net. This put the two locations among the “not friendly” tax group.  

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Schwab’s new campus in Westlake includes plans for office space of about 500,000 square feet to be built on 70-plus acres the firm purchased in June 2016, according to the Dallas Morning News. Rival Fidelity Investments also has a large presence in Westlake. 

As for TD Ameritrade, it relocated about 1,800 staff members to a $123 million Southlake campus nearby last year. 

(News of Schwab’s exit from the California comes about 11 years after Dimensional Fund Advisors moved its main operations to Austin, Texas, from Santa Monica, California.) 

A recent study by Spectrum Location Solutions found over 13,000 companies left California from 2008 to 2016. That meant a departure of about $77 billion and 275,000 jobs over the nine-year period. 

“We say Manhattan has Wall Street but Westlake has ‘Y’all Street,’” Jon Sasser, a spokesperson for the community told the Fort Worth Star-Telegram. “This is unparalleled not only in DFW but also Texas.”

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