HOUSTON – (Realty News Report) – Chevron is leaving its 92-acre headquarters campus in San Ramon, Calif. and moving hundreds of employees to Houston. The energy firm says it will lease some space in northern California and clearly states that it will keep its corporate headquarters in the Golden State where it’s been for many years.
However, there are historical patterns, clues and dangling statements made years ago that indicate that Chevron could eventually decide to move its headquarters to downtown Houston.
The Vision for a Downtown Skyscraper
It’s also possible that someday Chevron may want to fulfill its proposal to build a 50-story, 1.5 million SF tower at 1600 Louisiana, near its existing downtown offices.
Chevron has about 2,000 employees at its San Ramon headquarters and about 8,000 in Houston. It’s unclear how many employees are moving to Houston. Chevron has not disclosed how many employees will remain with the headquarters remnant in the northern California Bay Area, where office rents traditionally have been some of the most expensive in the nation.
Critics say California is a high-tax state with a reputation of being “unfriendly” to business, especially to oil and gas companies. For example, in 2020 Gov. Gavin Newsom signed an order banning the sales of new gasoline-powered autos by 2035.
A number of California-based companies have moved their headquarters from the Golden State to Texas in recent years, including CBRE, Hewlett Packard Enterprise, Charles Schwab, and Tesla.
The Texas Two-Step
The California-to-Texas moves often begin with the establishment of a beachhead in the Lone Star State where the work force grows. It’s eventually followed with the relocation of the corporate headquarters.
The tactic is “The Texas Two-Step,” says Austin-based economic development executive Ed Curtis, CEO of the YTexas organization.
Curtis, in an interview last week, said the process of moving companies to Texas has often begun with the purchase of land, or a sizable office lease.
“They call it the Texas Two-Step. The first step is they move a bunch of people in and say: ‘I’m not moving my headquarters.’ And eventually they move their headquarters and when they do, it’s seamless,” Curtis said.
Will Chevron move its headquarters to Houston?
“I think it’s definitely possible,” Curtis said. “I don’t know for a fact, but history tends to repeat itself and it wouldn’t surprise me if they did.”
Chevron’s Discussions of a New Skyscraper
It’s logical to speculate that Chevron may fulfill its proposal to build a 50-story 1.5 million SF tower at 1600 Louisiana, near its existing downtown offices.
Years ago, Chevron indicated it would build an office tower in downtown Houston when Gov. Rick Perry announced Chevron would receive $12 million, which ws never fully disbursed, from the Texas Enterprise Fund. The Texas deal was announced nine years ago in July 2013 and Chevron agreed to create 1,752 jobs here.
“Chevron USA Inc. proposes to construct a new multi-story office building of 1.5 million-plus SF located at 1600 Louisiana St.,” said Chevron’s application for the state’s $12 million in funding. “The building when completed, will provide Class A office space for technical, administrative and executive personnel.”
Today, Chevron has downtown offices at 1400 Smith and 1500 Louisiana. They are Class A buildings, but they decades old. Today, many top-drawer, corporate occupiers – and definitely, Chevron is an elite tenant – are attracted to brand-new buildings loaded with restaurants, health clubs, outdoor plazas – all built with exceptional air quality and health standards. Older buildings can grow dim in comparison.
Adjacent to Chevron’s 1500 Louisiana building is a lawn – 83,863 SF of grass where Chevron’s proposed tower was envisioned when the Texas Enterprise Fund deal was announced.
In addition to the state funds, at that time it was reported that Chevron asked the City of Houston to supply $4 million worth of infrastructure. Later, there were unconfirmed reports that the HOK architecture firm was noodling with concepts for the site. Chevron never started the building. Today, it’s just a big urban lawn, empty and flat amid high-rise towers.
Exxon Mobil, the largest energy company in the nation, is moving its corporate headquarters to north Houston in a few months, adding to its massive Houston workforce.
If Chevron relocates its headquarters to Houston, it would give the city the headquarters of the nation’s two largest oil and gas companies, in addition to hundreds of smaller energy-related firms.
The Chevron move would solidify for the long term that Houston is the Energy Capital of the World, even as the industry evolves.
July 21, 2022 Realty News Report Copyright 2022
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