NYC Firm Moving To Austin To Relieve Its Tax Burden

AUSTIN, TX — A $15 billion firm based in New York City of expanding into Austin in a move prompted as much for the city's corporate dynamics as its growing status as something of a haven amid a tax overhaul hitting high earners in the pocketbook, according to a published report.

Stonepeak Infrastructure Partners, a company led by former Blackstone Group LP dealmakers, plans to open a substantial office presence in Austin, according to a memo sent to investors obtained by Bloomberg News. Moreover, Stonepeak co-founders Mike Dorrell and Trent Vichie plan to relocate their families to Austin even while spending the bulk of their work week in the Big Apple, the news service reported.

Donald Trump's recently enacted tax overhaul sets a new cap of $10,000 on state and local tax deductions, including property taxes, Bloomberg explained. The changes have prompted money managers in highly taxed states such as New York and Connecticut — who until now have been able to write off hundreds of thousands of dollars in property taxes — to relocate in states with no state income tax and comparatively lower property taxes, according to the report.

The imminent Stonepeak move to Austin follows a similar one by money manager Pacific Investment Management Co. later this year, Bloomberg News noted.

To that end, Stonepeak is reportedly in the final stages of signing an 8,000-square-foot lease on the top floor of a high rise still under construction that's dubbed Third + Shoal, a person familiar with the transaction told Bloomberg. The building's anchor tenant is Facebook Inc.

Leasing representatives declined comment on the report, the news service said. The building currently under construction is expected to be substantially completed by the fall, with tenants moving in by early next year, according to the report.

Texas' zero state income tax has long been a draw for corporate relocation, an increasingly appealing site for expansion in light of the federal government's recent tax overhaul. Conversely, New York's state income taxes are among the nation's highest.

Sources familiar with the executives' relocation plans cited a number of Austin's dynamics that propelled the decision to move, Bloomberg noted. The Australian natives both want their children growing up in a place other than Manhattan, and the city's status as a tech hub (Austin is nicknamed "Silicon Hills"), its abundance of young professionals figured into the decision, according to the report.

Stonepeak also has a handful of investors in Texas, including the Teacher Retirement System of Texas, Employees Retirement System of Texas and the Texas Municipal Retirement System, according to Securities and Exchange Commission disclosures.

>>> Read the full story at Bloomberg Business News

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