The Midland Reporter-Telegram takes a closer look at the XCOR incentives package and why the city made the offer to the Mojave-based company. A summary is below.
Why Midland Wants XCOR
- Midland, a city built upon the oil and natural gas riches of the Permian Basin, wants to diversify its economic base to cushion against economic swings in these volatile industries
- Midland is hoping XCOR’s move will help it attract similar businesses.
Why XCOR Likes Midland
- Flat, open area around the airport
- Sunny desert weather that excellent for flying
- Well-run airport capable of supporting XCOR’s operations
- Friendly business climate with low tax rates, liability protections and modest regulations.
The Deal
- Midland’s $10 million package breaks down as follows: $2 million for XCOR to create its headquarters; $3 million toward lease payments and capital improvements at the existing AMI Hangar; $5 million in performance guarantees; $250,000 for job-training activities
- Midland Development Corporation will lease the AMI Hangar from the City of Midland for $6,000 per month for 10 years and lease it back to XCOR for $1 annually for 10 years
- Midland International Airport will apply for a spaceport license from the Federal Aviation Administration, a process that could take 18 months
- XCOR agrees to establish its headquarters and research and development operations in Midland
- The company will create a $200,000 payroll in Midland during the 18 month period after the contract is signed
- XCOR will have a $1 million payroll in Midland 12 months after the airport receives its spaceport designation
- Sixty months after the spaceport designation, XCOR will have a $12 million payroll in Midland
- The company is required to make $4 million in capital investments in Midland by Dec. 31, 2017
- XCOR will lease an existing bunker area for testing at a rate of $1,800 per year over 10 years
- Clawbacks are written into the contract that would require XCOR to pay back incentives based on the amount if it falls short based upon how much it misses the targets.
Read the full story.
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