Officials from the New Mexico Space Authority and Virgin Galactic signed a lengthy, detailed memorandum of agreement today they said will become a lease agreement if voters in Doña Ana County approve next week a gross receipts tax increase to help fund Spaceport America.
The 39-page memorandum isn’t legally binding, but is a detailed document that resulted from a lot of work. It proves commitments by the state and company to enter into the lease agreement, said New Mexico Economic Development Secretary Rick Homans, chair of the space authority. The lease should be ready to sign within 2-3 months, he said.
“There should not be any question in anybody’s mind that this is the immediate precursor to a lease agreement,” Homans said.
The memorandum details Virgin’s intent to lease 83,000 square feet at the spaceport – about 60 percent of it hangar space for two transport aircraft that are as large as Boeing 757s and five SpaceShipTwo spacecrafts being build by the company.
In return, Virgin will pay an average of $16.50 per square foot, per month to lease the hangar and commercial office space, which will total approximately $27.5 million over the course of the 20-year lease. It will also pay a number of fees related to the cost of operating the spaceport, but the exact amount hasn’t been determined.
Essentially, many of the costs of operating the spaceport, such as runway maintenance, will be divided among tenants of the spaceport in the form of runway-use fees, ground rental and other costs. If Virgin is the only tenant, the company will pay 100 percent, according to the memorandum. The percent each company pays will be determined by the percentage of space it leases.
The memorandum also states that Virgin will make Spaceport
You can read a summary of the memorandum by clicking here.
The memorandum was signed today at a news conference at the
“This agreement represents a significant commitment by Virgin Galactic,” said the company’s project director, Jonathan Firth. “… We can’t wait to bring our spaceship to
Lease and spaceport depend on tax vote
On April 3, voters in
Firth and Homans said the tax election is very important to the spaceport. Many lawmakers have said they aren’t willing to give any more than the $114.5 million they’ve already committed to the project, but Gov. Bill Richardson is pushing hard for another $25 million.
Without the tax money, the state doesn’t have enough to construct the spaceport.
Though two other counties, Sierra and Otero, will consider similar tax increases in the future, the bulk of local tax money would be generated by the more populous
Homans said the state doesn’t have another plan to secure the funding. Firth said the company doesn’t have a “Plan B” if Spaceport
Firth said the company is thinking positively about the tax election.
“Assuming it’s a positive result, it’ll send a positive message that the people of
When asked what would happen if the tax proposal fails, he said, “It would be hard to say because we haven’t been thinking of that.”
“We’ve been working on the assumption that this business is coming to
Homans said there were several major hurdles to building the spaceport when he began work on the project. All but two have been met – passage the local tax increases and approval of a commercial spaceport license by the Federal Aviation Administration.
Homans’ office is meeting weekly with FAA staff, and he said the license application is in “very good shape,” so he said the last major hurdle is the local tax increases, with Doña Ana County’s being the primary focus.
Paying for future costs and expansions
The lease won’t generate enough money to pay back the state and local money that built the facility, but that’s not the intent. Once the spaceport is built, the goal will be that it generates enough money for operational costs and future expansions.
It’s the resulting economic development that will be a boon to the local communities and state, proponents of the spaceport tax say.
The facility that will be built initially – the one with the $198 million price tag – will include office and hangar space for Virgin, in addition to a runway and other common areas, including fuel storage facilities.
Homans said the state is in talks with several small companies who want to launch from the spaceport but won’t, at least initially, need to lease office and hangar space. He said he expects some of them to sign agreements in the coming months to lease space for fuel storage and other needs and to agree to pay a small percentage of user fees.
He didn’t disclose further details about any of the companies with which the state is negotiating.
Other spaceports
At the news conference, Firth was asked about funding for other spaceports the company is considering using. He said Virgin isn’t in the business of owning or operating spaceports, and plans to work, in every case, out of facilities owned by governments or others. He said that’s how the company’s airline division operates, and this should be no different.
That’s an important point, because many opponents of the tax say Virgin should build its own spaceport.
Firth said the company plans to create “up to 200 new jobs” at the spaceport in the areas of engineering, customer service and entertainment, administration and general services. He also said the company appreciates the public investment in the facility, and pointed out the $200 million the company is spending on developing its spacecraft.
“You can count that as a
