A $15 billion firm is expanding it’s reach in order to protect its executives from higher state taxes paid in New York. Stonepeak Infrastructure Partners is led by former Blackstone Group LP dealmakers.
It hopes to open a new office in Austin, Texas. This is according to a memo obtained by Bloomberg News which was sent by investors. Co-founders of Stonepeak Mike Dorrell and Trent Vichie have decided to relocate themselves and their families to Austin. But admit they will still spend most of their work days in New York city. It is understood that tax rates in New York could rise if high earners leave.
There is now a cap on tax at $10,000 which includes state and local deductions. Including property tax. As such, many people who may no longer be eligible for the write off of hundreds of thousands of dollars of property tax yearly will be particularly keen to move away. Specifically, to states such as Florida which have low property tax along with zero state income tax.
Austin is sometimes known as the Silicon Hills. Because it has a diverse range of technology companies residing there. It also has 150,000 students there. Thanks to the University of Texas at Austin having a campus there. Importantly, the offices of major tech corporations such as Apple Inc, Alphabet Inc and Amazon.com Inc all reside there. And later this year, another company, Pacific Investment Management, will be opening an office there.
Third + Shoal is a building currently under construction. And company Stonepeak is in the final stages of signing a lease for an 8,000 square feet office at the top of the building. And the buildings anchor tenant is Facebook Inc. Subsequently, the building is expected to be completed in autumn this year. And tenants should be able to move in as early as the beginning of next year.
Austin appeals to a wide variety of people. Including young professionals. And as already mentioned, has a strong reputation as a tech hub. Reasons such as this have been influential in the co-founders of the company relocating their family to Austin.
The Austin office will be Stonepeaks third office. It is important to note that the founders will be charged for some state taxes enforced in New York due to the ongoing partnership with the city. However, there will be some relief. As 20% fund profit can be eligible for a lower capital gains rate. And non-residents of New York will not have to pay any state taxes on investment gains when deals have been made in states with lower tax burdens.
And interestingly, Mike and Trent are not the only founders that are moving to avoid tax increases. It is also believed that I Squared Capital, will be locating to Miami from New York. I Squared Capital are Stonepeaks rivals.
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