Spaceport America Seeks More Tax Dollars

Sunset at the “Virgin Galactic Gateway to Space” terminal hangar facility at Spaceport America. (Credit: Bill Gutman/Spaceport America)

With Virgin Galactic’s ‘big move” of its SpaceShipTwo to New Mexico expected to occur sometime in 2018, Spaceport America officials say they need taxpayers to ante up more money.

Dan Hicks, Spaceport America CEO, told attendees at the Greater Las Cruces Chamber of Commerce 2017 Space Update Luncheon on Thursday that more spaceports are poised to enter the commercial space industry, with 10 other licensed spaceports operating and an additional nine applications pending with the Federal Aviation Administration. And, with Virgin Galactic set to begin manned flights as soon as next year, more funding is needed to accommodate the increased traffic expected to follow, he said.

Hicks said he will seek an additional $600,000 from the Legislature to increase staff levels and continue with infrastructure improvements. At a cost of nearly $220 million, the taxpayer-financed Spaceport America opened in 2011. At the time, officials envisioned a new commercial space economy that would transform southern New Mexico. That economy has yet to come to fruition, but officials are hopeful.

The funding is necessary to stay on par with other spaceports around the country, Hicks said. With 16 people currently on the Spaceport America staff, Hicks hopes to increase that number to 26 “very quickly” to accommodate Virgin Galactic’s planned move to New Mexico….

New Mexico’s Spaceport America has a $6.1 million operating budget with a current state appropriation of $375,000 with $600,000 in local gross receipts taxes generated solely from Doña Ana and Sierra counties. Customer revenue generates $2.1 million.

Spaceport America Southern Road Project Moves Forward

Sunset at the “Virgin Galactic Gateway to Space” terminal hangar facility at Spaceport America. (Credit: Bill Gutman/Spaceport America)

Doña Ana County commissioners have selected a contractor to pave a dirt road to provide easier access to Spaceport America from Las Cruces and other points to the south of the facility.

County staff said the top bidder in a recent procurement process was Mountain States Construction — and county commissioners selected the company in a 4-1 vote.

The move allows Interim County Manager Chuck McMahon to negotiate a contract to build the 23.5-mile road, which could cost up to $15.2 million….

The New Mexico Spaceport Authority only has about $13 million to $13.6 million to build the road on hand because of some expenditures already tied to the road project, said Dan Hicks, NMSA executive director.

But McMahon said there’s a chance the New Mexico Department of Transportation will pitch in additional revenue to reach the $15.2 million mark. That would allow for the construction of a better road, county administrators said.

But even if the extra money doesn’t come through, the road project still would entail “hot mix” asphalt pavement, a “geotextile” fabric used to add structural stability to the road, two arroyo crossings and fencing, according to county documents. It would have a smaller “base course” — or roadway foundation — than if the extra funding is granted.

County officials declined to put any additional money into the road project to reach the $15.2 million mark, saying they would prefer to have the state provide it.

County Commissioner John Vasquez voted against funding the road upgrade, saying that he had difficulty asking taxpayers to spend more on Spaceport America. County residents voted to increase a tax on themselves to help pay for the $225 million project.

Getting to Spaceport America from Las Cruces currently requires driving north of the facility to Truth or Consequences and then turning around and traveling south. The paved road will significantly reduce travel time.

How Much Secrecy Does Spaceport America Need?

Richard Branson and his children hang out with Project Bandaloop dancers during the dedication of the Virgin Galactic Gateway to Space facility. (Credit: Douglas Messier)

The fourth installment of NMPolitics.net’s five-part series on Spaceport America was published today. How much secrecy does Spaceport America need?

Picking up on a theme covered in the third installment, this story details the lengths to which Spaceport America officials have gone to keep secret details of deals they have concluded with tenants.

“If you were to ask them would they want their leases out in the public they would say no,” [New Mexico Spaceport Authority CEO Dan] Hicks said. “…We just don’t want to have additional burdens on them or scrutiny on them.”

That’s a controversial stance in a poor state that has invested more than $220 million in Spaceport America – a state whose law intends that the public be given access to “the greatest possible information regarding the affairs of government,” which it calls “an essential function of a representative government.”

There’s a real tension created by the public/private partnership that is the spaceport. On one hand, greater secrecy may help attract companies that demand it, and with them may come good-paying jobs the state needs. On the other hand is the principle that opening the spaceport’s finances builds accountability and public trust that is key to winning the government funding on which the spaceport also depends.

Senate President Pro Tem Mary Kay Papen, D-Las Cruces, sponsored legislation on behalf of the spaceport earlier this year that would have let the agency keep rent payments, trade secrets and other information secret. One committee approved the bill, but then it died.

These days Papen says she supports withholding company trade secrets from the public. But she no longer backs secrecy for money coming into the spaceport from private companies.

The spaceport authority didn’t always keep agreement terms secret. For example, Virgin Galactic’s development and lease agreements were released years ago without anything being redacted.

The situation is different at the Mojave Air and Space Port, which is a public general aviation airport run by an elected board. Lease agreements are included in board packets that are available to the public.

The fifth and final installment looking at anchor tenant Virgin Galactic’s preparations for space tourism flights from Spaceport America will be published on Friday.

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Spaceport America Economic Impact Claim Lacks Actual Data

Four big thumbs up from Richard Branson and then New Mexico Gov. Bill Richardson at the Spaceport America runway dedication in 2010. (Credit: Douglas Messier)

NewsChannel 9 in El Paso recently looked into officials’ claims that Spaceport America had a $20 million economic impact on New Mexico’s economy in fiscal year 2016 and found a lack of support data.

However, when asked for a copy of the economic impact study or documents supporting the claim, Spaceport America’s chief financial officer, Zach De Gregorio, told NewsChannel 9 he didn’t use any documents and sent NewsChannel 9 a PowerPoint presentation with five slides.

“It’s just the PowerPoint,” said De Gregorio.

When asked how he did an economic impact study without any documents, De Gregorio said, “I had a lot of conversations and I talked with local business owners, customers and with city officials. I talked with my teammates and I got a really good sense of what was the activity in FY16.”

….When asked about exaggerating their economic impact, [Spaceport America Executive Director Dan] Hicks said, “The chart was intended to show the economic value of the activities at Spaceport America compared the funding received from the NM General Fund. It was simply a comparison chart to convey value added. An Economic Impact Study was not needed to provide a qualitative assessment of our value per NM general fund spending. The focus of the discussion was for our CFO to explain the assumptions he used to compile the information in that impact chart.”

The PowerPoint presentation showed a $20 million return based on the $944,000 the state invested in the spaceport in FY 2016. NewsChannel 9 said the figures do not show millions in taxes paid during the same fiscal year by residents of Dona Ana and Sierra counties to pay off bonds used for spaceport construction.

NewsChannel 9 also reported problems in obtaining documentation from Spaceport America. The spaceport attempted to charge the channel for documents that should be free to inspect under New Mexico law.

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Spaceport America Tax: The Levy that Keeps on Taking

The Virgin Galactic Gateway to Space building with a security fence around it. (Credit: Alex Heard)

Residents of New Mexico’s Dona Ana and Sierra counties will continue to subsidize Spaceport America’s operating budget for at least another year.

The New Mexico Finance Authority agreed to let the spaceport for one year use extra money from the taxes that shoppers pay in two Southern New Mexico counties. But the spaceport wanted the excess tax money in perpetuity, a proposal that the finance authority declined to grant as its chairman raised questions about the facility’s financial strength.

Though some politicians have supported the spaceport’s proposal, others have argued the tax money was only intended to help build the facility, not cover its day-to-day expenses.

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New Mexico’s Spending on Spaceport America Likely Not Over

Sunset at the “Virgin Galactic Gateway to Space” terminal hangar facility at Spaceport America. (Credit: Bill Gutman/Spaceport America)

After a decade of broken promises and delays, the next year could bring some very good news for New Mexico’s $225 million taxpayer-funded Spaceport America.

Anchor tenant Virgin Galactic’s lease payments are increasing. And Richard Branson’s prediction for the start of commercial spaceflights there in 2018 appear (for once) to be on the mark, barring major problems with SpaceShipTwo’s flight test program.

So, it would seem that at long last, New Mexico’s hard-pressed taxpayers will finally be off the hook for supporting the spaceport. Right?…I mean, right?

Not necessarily.

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