I think that both teams would use the same repository, whether it's located in one place or another. Subversion works well in a distributed environment, since the least amount of data possible for a given operation is passed between client and server.
For example, I work in Michigan, and the rest of my team is in Illinois and Florida. I just scripted our database, which is composed of 468 objects (tables, views, stored procedures, etc.), to my local hard drive, writing one file per object. It took me far longer to script it (~ 20 - 30 minutes) than to commit all 468 script files to our Subversion repository (~ 20 - 30 seconds). Both the database and the Subversion repository are located in Illinois.
[ January 21, 2005: Message edited by: Craig Demyanovich ]