This is the first in a series of articles examining the issues surrounding the April 3 election on whether to raise the gross receipts tax 1/4 percent in Doña Ana County to help fund Spaceport America.
When staffers for Gov. Bill Richardson first pitched the proposal to create a commuter rail to the Legislature, they underestimated the cost by almost $300 million.
So when the governor asked for $114.5 million during the 2006 legislative session to help fund Spaceport
Ultimately, three conditions were placed on $100 million granted by the Legislature. Before it could be spent, the state had to sign a lease agreement with an “anchor tenant” – ostensibly Virgin Galactic, obtain a license from the Federal Aviation Administration to operate a commercial spaceport, and obtain a cost estimate of $225 million or less for the facility.
State Rep. Joseph Cervantes, D-Las Cruces, was instrumental in getting the conditions placed on the funding. He said he had concerns “based on the overruns with the Rail Runner project,” and at least two of the conditions eventually placed on the funding came out of meetings he had with Economic Development Secretary Rick Homans.
This week, the state met the first of those conditions, which officials say proves this project is different. The official cost estimate for the spaceport came in at $198 million. It was developed by DMJM/AECOM, the firm designing the facility, and was reached after officials decided to build one runway instead of two.
The estimate includes construction of Virgin Galactic’s facility; all roads, water, wastewater, electrical and other lines to the spaceport; and the cost of leasing the land from ranchers through 2007, plus an up-front payment to the ranchers and other money set aside for eventual purchase of the land.
Beginning next year, the $87,500 annual cost of leasing the land will be included in the spaceport’s annual budget, Homans said, so future lease payments are not included in the $198-million estimate.
As the April 3 spaceport tax election approaches in
State contributes 70 percent of funding
Funding starts with the $114.5 million appropriated by the Legislature in 2006. In addition to the conditional $100 million approved during that session, the Legislature granted $14.5 million for immediate use. About $4 million was spent to construct the temporary facility that was used for the UP Aerospace launch last year.
Earlier this month, the Legislature removed the FAA-license requirement from $33 million of the $100 million it approved in 2006. Assuming it signs a lease with Virgin Galactic, that will allow the state to begin constructing a major road from the Upham exit off Interstate 25 in
The state can’t spend the remaining $67 million until it obtains the FAA license and the lease.
On top of that $114.5 million,
That $25 million is one of the reasons
That would bring the total funding made available by the state to $139.5 million, or just over 70 percent of the funds needed. That leaves $58.5 million, assuming the estimate is accurate.
The next planned funding component is the local gross receipts tax increase in the three counties surrounding the spaceport – Doña Ana, Sierra and Otero. The tax money would actually be used to pay back, over 20 years, bonds the state would sell to finance construction of the project.
In
After that money is set aside and interest and financing costs are taken out, about $49 million would be left, over the course of the 20-year tax, for construction of the spaceport, Homans said. That’s about 25 percent of the money needed to meet the cost estimate.
That would leave $9.5 million.
Sierra and Otero commissioners are also considering asking voters to approve gross receipts tax increases to help fund the spaceport. Though neither commission has voted to take the issue to voters, Homans said he has verbal commitments that it will happen.
If
That would leave $2.9 million.
If
That would leave about $600,000 unfunded.
Federal funds are also a possibility
Homans and staffers have met with
“We are confident they are coming, and the delegation has been very encouraging,” Homans said.
One proposal that will be made to Congress by the FAA is the creation of a federal fund for spaceport infrastructure grants, which would allow states to apply for federal dollars to help construct spaceports.
U.S. Sen. Jeff Bingaman, D-N.M., is optimistic about securing federal funds for Spaceport
“Sen. Bingaman does support the spaceport,” she said. “He is working with other members of the congressional delegation to secure funding for the infrastructure associated with it.”
U.S. Sen. Pete Domenici, R-N.M., didn’t sound so certain. He pointed out that a number of states are developing spaceports, and “there is a great deal of competition for attention and resources.” He said the “state and local governments will have to determine to what extent they are willing to find the revenues to support the facility, and there will be much competition for what is likely to be scarce federal dollars.”
“I have received the state’s request for federal funding for the spaceport,” Domenici said. “It will be reviewed along with all the other requests I have received for fiscal year 2008, which at this point total more than $1.4 billion. … I look forward to helping on the federal level where and when I can.”
What happens next?
The immediate focus of officials trying to make the spaceport a reality is the April 3 election in
The environmental impact statement necessary for the spaceport license is scheduled to be submitted to the FAA in May, and the state expects to obtain its license no later than the first quarter of 2008, Homans said. He expects the Otero and Sierra county commissions to vote to hold tax increase elections later this year or early next year.
Meanwhile Virgin Galactic, which says it has invested more than $200 million in development of the spacecraft it will use to ferry paying passengers into space, plans to begin launches next year from an airport that has been converted to a spaceport in Mojave,