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JANUARY 15, 2021
COVER STORY
WHY RELOCATE? The real cost difference between California and Texas explained FileTrail CEO Darrell Mervau, second from right, moved the company to Austin to improve employees’ quality of life. From left are Marketing and Administrative Assistant Audrey Moore, Director of Professional Services Meghan Bofenkamp and Project Manager Bryand Castillo. ARNOLD WELLS / ABJ
BY KATHRYN HARDISON khardison@bizjournals.com
leaving California in recent years — high taxes and burdensome business regulations, to name a few—Mervau said the driving factor for FileT- rail was to find a city that could provide better opportunities for its people. “My employees were constantly saying, ‘Look, my commute is horrible, and my rent is astronomical for what I’m getting,’” he said. “And to be perfectly honest, I also told them, ‘I’m not going to pay you $400,000 a year so you can buy a house in Silicon Valley.’ “So, we were really looking at improving their lives and moving somewhere where they could start accumulating assets.” That, ultimately, has been the driving factor for many companies leaving Silicon Valley and looking to areas such as Austin, which remains a top market because of its business climate, comparatively low cost of living and its large talent pool, according to site selectors.
Texas has been a magnet for company relo- cations and expansions for some time. For eight straight years, the state has ruled supreme in the Governor’s Cup rankings produced by Site Selectionmagazine for total capital invest- ment by state. Now that trend appears to be accelerating because of cost concerns in coast- al states as well as the sudden upheaval of the pandemic. So, as companies trade in the beaches of California for the Texas Hill Country, it begs the question: What’s the actual cost difference between the two states? On a narrower level, what opportunities does Austin provide over Silicon Valley? And the crystal ball question: How can Austin manage its fast-paced growth so that it doesn’t become the next Silicon Val- ley in 10 years?
T he writing on the wall was clear for Dar- rell Mervau in 2018 —he couldn’t provide his employees the lives they wanted in Silicon Valley. It took time for Mervau to find the right place to relocate his software company, File- Trail Inc., which was then based in San Jose and had grown California roots for 20 years. The short list was Phoenix, Nashville or Austin. The decision to move to the Texas capital was an easy one, he remembered, adding it was shared with a team of employees in January 2020 over a round of beers at Lazarus Brewing Co. A few months later, the company would relocate its headquarters just half a mile away from that brewery in East Austin. Of all the reasons companies have cited for
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