Updated on March 5 at 8:34 a.m. PST with additional information about space companies located in the Los Angeles area and the benefits of industry clusters to employers and employees.
by Douglas Messier Managing Editor
The state of New Mexico has proposed that Virgin Galactic establish a production facility at Spaceport America, which is where the company plans to begin flying tourists on suborbital space rides later this year. KRQE TV reports:
The New Mexico Economic Development Department says they have a proposal to bring Virgin Galactic’s manufacturing to the Spaceport. Right now, the manufacturing location is in the Mojave desert. Spaceport America has five permanent tenants that are conducting a variety of experiments; including one company that uses laser technology to help land on the moon.
After waiting 16 years for Virgin Galactic to begin space tourism flights from Spaceport America, New Mexico legislators have hit upon a new idea to try to get some revenues out of the place once the company begins commercial service later this year. The Las Cruces Sun-Newsreports
A bipartisan billintroduced in the state Legislature seeks to close a loophole that excluded spaceflight passenger tickets from gross receipts taxes. The move aims to harvest revenue from ticket sales as Virgin Galactic prepares to begin regular commercial service later this year.
H.B. 72 would amend a statute that excludes receipts “from launching, operating or recovering space vehicles or payloads in New Mexico” from gross receipts taxes, clarifying that sales “for transporting any person into or near space” would be taxable.
A 2019 ruling by the state Taxation and Revenue Department on the question of taxing flights to space essentially treated passengers as freight, stating: “… it seems reasonable to consider passenger revenues as receipts received for the operation of a space vehicle.”
“When those exemptions were drafted, it was not in anyone’s mind that people would be a payload,” state Rep. Jason Harper, R-Rio Rancho, told the Las Cruces Sun-News. Harper is a co-sponsor of the bill.
Virgin has sold about 700 tickets to customers at three different prices: $200,000 (until 2013); $250,000 (2013-2021); and $450,000 (2021-present). The amount of the tax would depend upon where it was leveled in Dona Ana County (where Virgin Galactic has its headquarters) or Sierra County (home of Spaceport America).
Gross Receipts Tax
Dona Ana County
The state government would receive most of the tax revenues, with the county receiving a smaller portion.
After more than a decade of delay, Virgin Galactic says it plans to complete flight test of its SpaceShipTwo VSS Unity spacecraft this summer. Commercial suborbital tourism flights are set to begin in the fourth quarter of this year.
Fourteen years ago, Virgin Galactic and New Mexico promised “tens of thousands” of tourists would fly to space from Spaceport America by 2019. Total thus far: 0.
by Douglas Messier Managing Editor
When they announced in December 2005 that Virgin Galactic would locate its space tourism business in New Mexico, Virgin Founder Richard Branson and Gov. Bill Richardson made a number of eye-popping claims about why taxpayers should back a plan to build the Southwest Regional Spaceport to serve as the space tourism company’s home base:
$331 million in total construction revenues in 2007;
2,460 construction-related jobs;
$1 billion in total spending, payroll of $300 million and 2,300 jobs by the fifth year of operation; and,
$750 million in total revenues and more than 3,500 jobs by 2020.
Virgin Galactic would sign a 20-year lease as anchor tenant and pay fees based on the number of launches it conducted. New Mexico would use the spaceport, Virgin’s presence and the funds generated to develop a large aerospace cluster.
Surprisingly, New Mexico would spend more money, $225 million, to develop a facility now known as Spaceport America than the $108 million that Branson planned to spend on developing a fleet of five SpaceShipTwos and WhiteKnightTwo carrier aircraft.
Among all the big numbers in the announcement, there was a truly astounding one that was deemed so important it was mentioned twice. (Emphasis added)
Bill Richardson, who pushed through the construction of the world’s first purpose-built commercial spaceport as governor of New Mexico, has been accused of involvement in a sex trafficking ring run by the deceased financier Jeffrey Epstein and socialite Ghislaine Maxwell.
The Daily Beastreports on court documents that were unsealed last week in a defamation suit against Maxwell by a woman who claimed she was forced to have sex with Richardson and other prominent figures:
The long-awaited southern road that will cut travel time between Las Cruces and Spaceport America is nearing completion, the Las Cruces Sun-News reports.
Finally, after years of delays and uncertainties, the roughly 24-mile-long road is paved. Some details remain in the overall project, which Doña Ana County officials expect to be completed in August.
Doña Ana County Manager Fernando Macias said he drove the road on July 9 to see how it looked.
“From my perspective, it’s 98 percent complete,” he said. “Maybe a little bit of touch-ups (are needed) as we go along because we haven’t technically accepted the road or accepted the finality of the project.”
For years, there’s been a dirt road along the southern route, which stretches from the Upham Exit of Interstate 25 to the spaceport. But it was in poor condition, and drivers, especially those in passenger cars, found it impassable. Even people driving trucks reported frequent flat tires.
Currently, motorists must drive north of the spaceport on I-25 to Truth or Consequences and then double back on local roads to reach the spaceport.
The $14 million project is being paid for by the New Mexico Spaceport Authority, which runs Spaceport America. The state of New Mexico has spent about $225 million on the spaceport project, whose anchor tenant is Richard Branson’s Virgin Galactic.
Virgin Galactic continues to test SpaceShipTwo Unity at the Mojave Air and Space Port in California. The ship is designed to carry six passengers and two pilots on suborbital flights.
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.
The tax increase that Sierra County voters approved in 2008 to support the construction of Spaceport America has no expiration date and no restrictions on the use of excess revenues that might be collected each year, according to the ordinance passed by county commissioners.
This one deals with financing at Spaceport America. It requires a bit of understanding of the history of how it was funded.
So, here’s the back story: In 2007 and 2008, residents of Dona Ana and Sierra counties approved a quarter cent increase in the sales tax to help pay for the construction of Spaceport America, where billionaire Richard Branson plans to send rich people on suborbital joy rides.
New Mexico State Sen. Lee Cotter (R-Las Cruces) has renewed efforts to bring tax relief to residents of Dona Ana and Sierra counties relating to their support of Spaceport America.
In 2007, residents of the two counties agreed to increase their taxes to help fund the construction of the facility, which is located outside of Truth or Consequences. The taxes remain in place to pay off bonds sold to fund Spaceport America’s construction.
New Mexico Spaceport Authority (NMSA) Executive Director Christine Anderson briefed Dona Ana C0unty officials on the status of Spaceport America on Tuesday.
Anderson told commissioners that anchor tenant Virgin Galactic has talked about beginning flight tests on its second SpaceShipTwo vehicle this year, ” so “perhaps” the company will be able to begin commercial flights from Spaceport America in 2016.
New Mexico State Senator Lee S. Cotter (R-Las Cruces) has introduced legislation to repeal the New Mexico Spaceport Authority’s (NMSA) power to issue bonds and limit its ability to used tax revenues to support Spaceport America.
Senate Bill 75 aims to remove the ability of NMSA to “issue revenue bonds and borrow money”.
New Mexico legislators spent Monday down in Las Cruces reviewing the finances of Space America. Members of the New Mexico Finance Authority Oversight Committee discovered that more had stayed the same than had changed in recent months.
Here’s a summary of the key points:
Virgin Galactic will likely not begin flying paying passengers for at least another 8 months. It’s not really clear how realistic that goal is; much depends on how upcoming test flights using a brand new motor go in Mojave.
Local taxpayers are partially on the hook for helping to keep the $218.5 million, taxpayer-funded spaceport operational until Virgin Galactic begins commercial flights. Currently, the $218.5 million taxpayer-funded spaceport is being used to launch sounding rockets and shoot commercials for Land Rover.
Operations are being partially funded from excess tax revenues levied in Dona Ana and Sierra counties that could be otherwise spent paying off spaceport bonds or making infrastructure improvements such as paving a southern road to the spaceport.
The $14.5 million that authorities have put aside to pave the road isn’t remotely enough to do the do a full paving job.
Construction on the 24-mile road – which will provide more direct access from Las Cruces – is likely to begin next summer after the Bureau of Land Management completes its review of the project.
SpaceX is about five months from being able to conduct flight tests of its reusable Falcon 9 vehicle at the spaceport.
A new, unidentified tenant is expected to begin flights of whatever it flies sometime during fiscal year 2016.
While Richard Branson’s recent appearances on U.S. TV shows have undoubtedly helped him to sell many copies of his new book, The Virgin Way, the British billionaire unintentionally stirred up a hornet’s nest in the process.
On “The Late Show With David Letterman,” Branson revealed that SpaceShipTwo’s first commercial flight — which he will take with his son, Sam — has been delayed from the end of this year until February or March 2015 at the earliest.