Thanks to a $4.5 million check from the Texas government, San Diego-based software company Websense is moving its corporate headquarters to Austin, capital of the Lone Star State.
Texas Gov. Rick Perry's office announced Thursday that the Texas Enterprise Fund will send the cash to Websense, which in exchange will relocate 445 jobs to Austin and also make a to-be-announced $9.9 million capital investment. Websense, which opened in 1994, was purchased by Vista Equity Partners in June for $910 million cash.
Perry has made trips around the country, including to San Diego, to tout Texas as a state with low regulations and no state income tax, while California is among the most costly states for businesses. In 2010, Petco — a San Diego-based retailer of pet products — got $3.1 million from the Texas fund to bring some of its operations to San Antonio.
“Texas is the nation’s leading example of creating an environment that allows job growth to flourish, innovations to thrive and families and employers to succeed,” Perry said in a statement. “Paired with our low taxes, smart regulations and fair courts, these TEF investments will help bring hundreds of jobs to Austin, and thanks to our world-class workforce, these employers know Texans are prepared to take on the diverse needs any company may have.”
Vista Equity, with $7.8 billion in assets, last year also bought San Diego-based fleet-tracking company Omnitracs from Qualcomm for $800 million cash, and events registration software company Active Network for $1 billion. That has led to speculation that those companies could be relocating. A call to Vista Equity's San Francisco office was not returned. Websense released a statement from CEO John McCormack but a spokeswoman declined to comment further, citing final due diligence in the deal.
"We are expanding our presence into Austin because it represents an energetic, high-technology hub that will further enable us to meet growing demand for our technology and better serve our global customer base," McCormack's statement said. "Our top priority continues to be exceeding customer expectations and protecting organizations from data theft and advanced cyberattacks."
Vista Equity, based in Austin, has a reputation for buying companies and moving them to Texas, said Mark Cafferty, CEO of the San Diego Regional Economic Development Corp. Cafferty said nearly three months of efforts by the EDC to meet with the firm's local officials were not successful, but he also noted the organization would continue reaching out to Websense.
"Austin does have the closing dollars from Gov. Perry and does have limited regulation and ease of restrictions, and it’s Austin," Cafferty said. "We talk about the well-educated, smart young talent we have in San Diego and Austin has that, so the reality is that Austin has that and it’s got the benefits of Texas."
Cafferty said the EDC gets calls weekly from companies who ask about benefits the state can offer to compete with Texas.
"We do the best we can," he said, noting that the latest efforts are to get at the front of the line for the new California Competes credit.
Those credits, currently being finalized, are part of a new tax incentive program introduced by Gov. Jerry Brown that will dole out tax credits to companies that promise to create jobs. However, officials have said the state will never write checks to companies because it's money that can't be recouped. The California program starts with $30 million to dole out through June, before increasing to $150 million the next fiscal year, and $200 million in fiscal 2016 and 2017. Companies that threaten to leave the state are expected to get priority in the application process for the credits.
But not everyone is leaving. Northrop Grumman relocated 300 jobs from New York and Florida to San Diego in the last year to work on unmanned aerial systems, or drones. The EDC also reports that a biotech called Microdermis moved here from New Jersey, bringing 20 jobs to the region.
Perry is no stranger to San Diego. In December 2012 he courted ResMed, a San Diego maker of medical devices for sleep apnea, but that company in the spring decided against moving.
Since its launch in 2003, the Texas Enterprise Fund has spent more than $519 million to lure corporations, creating 71,075 new jobs and $23.6 billion in capital investment, according a news release from Perry's office.
Perry's office also announced Thursday that San Francisco-based Dropbox would receive $1.5 million to expand its operations in Austin by creating 170 new sales and operations jobs and making a $5.5 million capital investment.