Taco Bell Poised to Announce Whether It Will Move to Texas : Jobs: The Irvine-based firm is pondering a last-minute pitch by California officials.

Taco Bell Corp. is expected to announce as early as this week whether it will expand its corporate headquarters in Orange County or move to the suburbs of Dallas, resolving a high-stakes bidding war between California and Texas.

Only two weeks ago, the Irvine-based fast-food chain appeared to be ready to announce a move to Texas, but an 11th-hour pitch by local and state officials--offering tax credits and other enticements--persuaded Taco Bell officials to hold off on the decision.

“Taco Bell’s is a pivotal decision,” said Terry Hartman, president of the Irvine Chamber of Commerce. “If they leave, we’ve lost a major effort to retain somebody. If they stay, we’ve got a major win that we could use to anchor down others.”

At stake are 1,000 jobs and the economic, social and philanthropic benefits to Orange County--as well as the efforts of local and state politicians to persuade corporate leaders that California is again becoming a good place for business.

In recent weeks, Gov. Wilson has lobbied Taco Bell heavily. Assembly Speaker Willie L. Brown Jr. (D-San Francisco) has weighed in with personal entreaties and promised legislation to ease the tax burden and other restrictions on corporations.

Billionaire Don Bren, chairman of Irvine Co., is involved, as are committees of local officials and business boosters.

Taco Bell, a unit of Purchase, N.Y.-based PepsiCo Inc., is financially sound and not being forced by economic considerations to seek a cheaper locale. It represents the very kind of company California thought it could always attract and keep: a non-polluting service firm with hundreds of white-collar and clerical jobs.

The import of Taco Bell’s decision is not lost on state and local politicians or community leaders.

“Taxes, taxes and more taxes. That’s what it’s all about,” said Orange County Supervisor Thomas F. Riley. He is a member of the so-called red team of local and state officials and business leaders that is trying to persuade the company to stay.

Two weeks ago, the Mexican-style fast-food chain was “this close” to moving to the Dallas area, Chief Executive John E. Martin said in a recent interview.

In a March 28 meeting with the red team, the company asked the state for tax credits for new wages that result from expansion, for wages created by construction jobs and for construction costs and land purchases, a state government source said. It also sought relief from car-pooling rules.

The red team presented its “best and final offer” of tax incentives and inducements to keep the company here, and Taco Bell postponed the announcement of its decision.

“I’ll tell you, they have got new religion, and it’s come only within the last two or three weeks, quite honestly,” Martin said of state officials. Even Riley conceded that local leaders “haven’t had the support from the state that we’ve had recently.”

That Taco Bell is considering moving “points up the need for more business-retention effort by the state, never mind efforts to attract new businesses,” said Bob Hagel, vice president of business consulting for Premier Relocations Services in Irvine.

Martin acknowledged that California, with its high cost of living and restrictive business and environmental laws, can’t compete economically with Texas. The Lone Star state has cheap land, a lower cost of living and no corporate or personal income taxes. It also has pockets deep enough to offer Taco Bell $10 million in tax incentives, training grants and low-rate loans.

The company told California officials, the government source said, that the inducements Texas offers include about $4.5 million in property tax relief over 10 years and the suspension of permit and developer fees. In addition, Taco Bell employees and their families who moved to Texas would not have to pay non-resident tuition to attend state colleges and universities.

Taco Bell would not comment on the offer or the negotiations.

Regardless of the economic benefits in Texas, Martin said, “my druthers would be to stay in California.” He said he values the “creative and intellectual capital” in the state, as well as the “energy and access to the Pacific Rim.” Evaluating such intangible assets, however, has been difficult.

“What is the value of a big idea?” he said. “In our case, a big idea could add $600 million to $700 million in sales in one year.”

In some ways, the county may be a victim of Taco Bell’s success. Under Martin’s leadership, the chain has grown from a regional operation to a nationwide one. Executives who must travel frequently to the East Coast have said that a central location would be more sensible.

In addition, Taco Bell has been working closely with another PepsiCo unit, Frito-Lay Inc., on a line of products for grocery stores. Frito-Lay is based in Plano, a north Dallas suburb.

In fact, says Jon P. Goodman, a professor and director of USC’s Entrepreneur Center, the real question is whether a decision to move to Texas represents a rejection of Southern California or persuasion from parent PepsiCo to consolidate some operations in Plano.

Taco Bell executives have maintained previously that the decision to move was theirs to make and that PepsiCo has not interfered.

Times staff writers John O’Dell and Ann Conway contributed to this report.