LOS ANGELES -- California never stood a chance.
In moving from suburban Torrance to Plano, Texas, Toyota Motor Sales U.S.A. and Toyota Financial Services wanted a headquarters campus where there wouldn’t be a barrier between established employees and the “new guys.” Everyone would have a fresh start.
That reason for losing a key tenant offers little solace to Torrance Mayor Frank Scotto. Toyota represents about $1.2 million in annual business licenses, sales taxes, utility-user taxes and property taxes. Toyota also owns 101 acres of land and 2 million square feet of office space.
“Even if we gave them back that $1.2 million a year, that wouldn’t have done anything,” Scotto said in an interview the day after Toyota’s announcement. The state of Texas announced it had given Toyota $40 million in incentives -- although insiders say that initial bonus was just the beginning of the Lone Star largesse.
“Toyota gets 30 years there, tax-free. It’s pretty amazing that Texas is that desperate,” Scotto said.
Home since 1982
Toyota Motor Sales has been headquartered at the corner of Western Avenue and 190th Street since 1982, but has steadily added holdings so that it now encompasses several square blocks of the area. As it shifts its operations out between now and 2017, Toyota will have the financial headache of trying to fill that office space. But the glut of commercial real estate could hurt the entire region’s fortunes.
A Toyota official said the automaker “will study our options over the next several years with respect to its reuse.”
Scotto said his phone is already ringing from companies interested in taking over Toyota’s space, mostly because Toyota has kept the offices “pristine,” he said. One of the newer facilities is certified under the Leadership in Energy and Environmental Design program.
“We’re getting calls from all over the world inquiring about the property. Toyota may want to move out, but lots of people want to be here, to be close to the port and the employee resources we have here,” Scotto said.
Torrance may be known for the auto industry -- Toyota and American Honda are headquartered here -- but it also is a mecca for medical services, with more employees in that industry than automotive. Torrance also is home to Robinson Helicopter, which has built 10,000 small $750,000 choppers on its assembly line adjacent to Torrance Airport since beginning deliveries in 1979.
Scotto is concerned that Plano will be unable to provide the kinds of skilled executives that Southern California can, and that Toyota will have to import people to replace those who won’t relocate.
“There are very few places who have the same type of employees that California has,” Scotto said.
Toyota was the second major tenant grabbed by North Dallas from the South Bay in the past year. In 2013, Raytheon Space and Airborne Systems moved its headquarters staff from El Segundo to McKinney, up the road from Plano. And Texas is making a hard sell to Huy Fong Foods, maker of Sriracha hot sauce, to move from the restrictive regulations of Irwindale, Calif.
Torrance also will lose Toyota’s philanthropic assistance, including $110,000 out of the Torrance Education Foundation’s $500,000 in annual donations to help the local school district, according to the Torrance Daily Breeze.
Toyota said a $10 million fund would continue to assist nonprofits in L.A.’s South Bay, as well as in Erlanger, Ky., which will lose 1,550 jobs in the restructuring.
Scotto bemoaned that state legislators in Sacramento seem inured to the exodus of skilled-job businesses from the area.
“We’ll be like Florida, a state of retirees who love the climate, and a bunch of service people who do all the other things,” Scotto said. “Unfortunately, that environment won’t work here, because the service people won’t be able to afford to live here. Twenty years from now, we’ll look back and say, ‘We should have done something.’”