Critical vote on spaceport looms in Sierra County

Tuesday’s tax vote in Sierra County may not quite be a do-or-die moment for Spaceport America, but supporters of the tax say if it isn’t approved the task of constructing the world’s first purpose-built commercial spaceport will become much more difficult.

“This is very pivotal and, really, Sierra County holds this key to the future,” said Steve Landeene, executive director of the New Mexico Spaceport Authority. He said rejection of the tax on Tuesday would be “a major setback” for the spaceport.

Approval of the proposed 1/4-percent increase in the gross-receipts tax would generate about $2.3 million for the spaceport, but the Sierra County tax is important for several other reasons. Among them:

• Doña Ana County approved a similar tax increase last April that would generate an estimated $49 million for the spaceport, but under state law that money can’t be collected and spent unless another local government approves a tax increase and joins the county in forming a regional spaceport district.

• The state is also hoping to get $6.6 million from Otero County, but the commission there says it won’t ask voters to consider a tax hike unless Sierra County approves the tax.

• The Legislature has appropriated approximately $130 million for the spaceport. Of that, $15 million comes with a stipulation that it can only be spent if the regional spaceport district is created.

• A political statement that voters in the county where the spaceport is to be built aren’t willing to invest in the facility would be “problematic,” Landeene said.

Lt. Gov. Diane Denish, who was in Sierra County last week campaigning for approval of the tax, said there isn’t a concrete backup plan if the tax isn’t approved. She said the state “could come up with a Plan B, but clearly it would be less desirable.”

On top of the uncertainty surrounding the Sierra County vote, an upcoming deadline looms large. Doña Ana County commissioners have approved a resolution declaring their intent to rescind that county’s tax increase unless the state obtains a commercial spaceport license from the Federal Aviation Administration and signs a lease with an anchor tenant by Dec. 31. The Legislature placed the same conditions on $67 million of the money it approved for the spaceport, which has an estimated cost of $198 million.

Denish said a backup plan might include asking another local government, such as the towns of Elephant Butte or Truth or Consequences, to approve a tax increase and join Doña Ana County in a regional spaceport district. It might also include asking the Legislature and Doña Ana County for more time, which would be necessary because the state would have to spend time focusing on another tax election instead of the FAA license and anchor-tenant lease.

Lots of interest

Denish doesn’t think a backup plan will be necessary. She said she found “a lot of optimism” in Sierra County and believes the tax will be approved.

Turnout during early voting was high. As of 3 p.m. Friday, 17 percent of registered voters – 1,291 out of 7,389 – had voted early or requested absentee ballots, according to the clerk’s office. By comparison, total turnout in Doña Ana County a year ago was 18 percent. The tax was approved there by a 270-vote, 1.6-percent margin.

A small group of activists is campaigning against the Sierra County tax, but local business owners and other tax supporters have been more visible. That was also the case in Doña Ana County a year ago.

Leo Rivera of T or C, a spaceport-tax opponent, shared in an interview many of the same concerns that opponents in Doña Ana County expressed last year – that the spaceport will benefit only the rich, and that the entire state, not three counties, should raise the gross-receipts tax.

Doña Ana County tax opponents frequently said they didn’t oppose the spaceport, but opposed a tax increase for what they call a private enterprise. Rivera, on the other hand, said he isn’t certain he wants the spaceport to be built. He said it could spur growth in Sierra County that would raise property values and hurt fixed-income retirees.

Arturo Uribe, who helped lead the campaign against the Doña Ana County tax, was also in Sierra County recently to campaign against the tax. He views it as another chance to try to defeat the Doña Ana County tax increase.

“It’s like we got a chance to play a game with high stakes, and it’s best out of three,” he said. “If the tax passes in Sierra County, game over. If it fails, all of us on both sides will be in Otero.”

Rivera said he believes the tax will be defeated or only narrowly approved on Tuesday, but Jerry Stagner, president of Compass Bank in T or C and a tax proponent, said he is optimistic that the tax will be approved. As co-chair of People for Aerospace, the group that has been campaigning for the tax’s approval, Stagner has been working to educate people about the potential economic benefits of the spaceport.

“You hear all these rumors – that it’s just about rich people going into space – and that’s just a small part. There’s so much to this,” he said. “We just want to make sure that everybody makes an informed decision.”

Tax supporters are quick to point to two studies (click here and here to read them) that predict that the spaceport will create thousands of new jobs and pump hundreds of millions of dollars into the area economy. Landeene has also been promoting the tax by saying Sierra County can’t lose – even if the spaceport failed, the county would benefit from lots of temporary construction jobs.

Landeene said he believes the tax would be easily approved if all voters were educated about the benefits of the spaceport.

“Our job is just to get the word out and educate people,” he said. “My only fear is we haven’t done enough to touch every single person in the county.”

If the tax is approved

If the Sierra County tax is approved, the state will have to clear two other hurdles: securing an FAA license and inking a lease with planned anchor tenant Virgin Galactic, which plans to ferry paying passengers into space. The current plan is to have the spaceport operational by 2010.

The state has signed memorandums of understanding with several companies that say they plan to operate from the spaceport, including Virgin, but none have signed legally binding agreements. Virgin pledged last year, just before Doña Ana County’s tax vote, that it would sign a 20-year lease that would generate at least $27.5 million for the state once voters in Doña Ana County approved the tax, but there is still no lease. It’s one of many aspects of the spaceport process that hasn’t gone as quickly as the state planned.

When the state and Virgin signed a memorandum of understanding that set base rates and the framework for a future lease, they hadn’t started designing the facility. Since then, the state has hired an architect to design the facilities the state and Virgin will occupy – a process that is nearly complete. That has changed some of the plans for the project, Landeene said.

The Spaceport Authority board has given Landeene the power to sign a legally binding development agreement that would commit Virgin to a 20-year lease but would not set rates. Landeene said he could have signed it before Tuesday’s vote, but decided he didn’t want to sign something “just so it would look good.” He said the lease isn’t ready to sign, and he wants to ink both documents at once to ensure there are no contradictions. Landeene said user fees and other issues must still be negotiated.

Though there is no lease, Landeene said he has no doubt that Virgin Galactic is committed to the spaceport.