Minnetonka-based Westwood engineering firm following trend by moving HQ to Texas

A 50-year-old Minnesota engineering firm is moving its headquarters from Minnetonka to Texas.

After acquiring Peloton Land Solutions in June, Minnetonka-based Westwood Professional Services Inc. has more employees in Texas than anywhere else, including Minnesota.

It made sense to move the headquarters to Plano, part of the Dallas-Fort Worth metro area, said Paul Greenhagen, Westwood's chief executive, in a statement. Texas-based employees include three of the firm's top officers.

Westwood joins several high-profile companies that have opened large offices or moved their headquarters to Texas, including Tesla.

"The Dallas-Fort Worth area gives us a much larger market to attract top corporate talent," Greenhagen said. "Additionally, our team members collaborate across the country. DFW has two major airports and is centrally located in the U.S."

Westwood already has an office in Plano, one of 12 in Texas.

"Existing corporate staff located in Minnesota will not be required to move to Dallas," said Greenhagen, who said that Minnetonka will remain a "significant office" for the company.

Westwood has 27 offices across the country, including St. Cloud and Brainerd in Minnesota, Phoenix, Denver and Overland Park, Kan.

Most of the firm's 1,600 employees "won't notice a difference with this change," Greenhagen said.

Fran Hagen Sr., who died in 2021, founded Westwood in Golden Valley in 1972.

Connecticut-based private equity firm Endurance Partners made a "strategic investment" in Westwood in 2021. The announcement of the deal did not disclose the amount of the investment or the ownership stake that it gave Endurance.

The headquarters move will be completed by Jan. 1.

Since the start of 2022, 9% of public companies relocated their headquarters, according to a study by HireAHelper, a California-based moving company. Most companies found another location in the same state, but 24% moved elsewhere, with Florida the largest beneficiary of the relocations and Texas the second largest.

Texas saw a 71% net increase in headquarters locations, the study found. Minnesota saw no net change.

HireAHelper identified reasons for companies moving as cost-cutting, seeking lower taxes and finding cheaper office space.

The Department of Employment and Economic Development said, on the whole, the state is seeing healthy growth from Minnesota-based companies.

"In just the first three months of this year, 34 Minnesota companies have announced expansions in Minnesota, adding hundreds of jobs and $100 million in new investment," Kevin McKinnon, deputy commissioner for economic development and research, said in a statement.

But while there will be no forced moves in the Westwood relocation, "you never want to lose headquarters," said Peter Frosch, CEO of economic development group Greater MSP.

Headquarters often mean jobs added are higher-paying and that more of the company's business is done where they are located.

Frosch pointed to Winnebago Industries Inc., which in 2021 announced relocating its headquarters from Iowa to Minnesota, as one recent success for the state.

Although business owners often criticize the tax climate in Minnesota, CNBC recently ranked Minnesota as the fifth best business climate in the U.S. Minnesota scored well in categories measuring infrastructure; life, health and wellness; and technology and innovation.

"It reflects our areas of strength," Frosch said of the CNBC survey.