State says it’s close to inking deal with Virgin Galactic

The state is close to inking a deal that would officially make Virgin Galactic the anchor tenant at Spaceport America, a top official says.

“Could be days. Could be a couple of weeks,” said New Mexico Economic Development Secretary Rick Homans. “I am hoping days. I will know more by this weekend.”

Homans said what should be finalized in the coming days is a memorandum of understanding that would set the terms for a lease. He said the memorandum will be signed by the state and company, then converted into “a legal lease document” that he expects to be signed “by mid-year.”

The news comes less than two weeks before voters in Doña Ana County will decide on April 3 whether to approve a 1/4 percent increase in the gross receipts tax to help fund the spaceport. Opponents of the tax increase have long complained that there’s no agreement with Virgin, and Homans has said for months that such an agreement was in the works.

The memorandum would give voters key details about Virgin’s intentions in New Mexico that should help them decide whether they want to approve the tax increase, which would provide $49 million for the spaceport.

The lease is one of three conditions the state has placed on the use of funding it has approved for the spaceport. County Commissioners also made it one of three conditions that must be met before the tax money – if it’s approved by voters – can be spent. The memorandum won’t satisfy that condition, but is a big step.

Homans compared the memorandum to “a purchase and sale agreement when buying a home,” and said, before it’s signed, “it will have been reviewed by lawyers on both sides.”

That’s what’s happening now.

The state has already met another of the three requirements – that the official cost estimate come in at $225 million or less. Earlier this week, officials announced that the estimate is $198 million.

The state must still obtain a license from the Federal Aviation Administration to operate a commercial spaceport. Homans has said he expects to submit the environmental impact statement to the FAA in May, and expects to have the license by the first quarter of 2008.

Asked when an announcement on the deal with Virgin might be made, Homans had this to say:

“We will announce it when negotiations are complete.”

Virgin is spending more than $200 million to develop a spaceship that will ferry paying passengers into space. The company says it plans to begin operations next year from a converted airport in Mojave, Calif., and move to Spaceport America, which will be its worldwide headquarters, as soon as the facility is built.

Virgin is also working with the government of Sweden to operate from its future spaceport, which, due to weather there, will only be useable a few months out of the year. One of the future, probable uses of spaceports is extremely quick travel around the globe.