Virgin Galactic ramps up NM operations as spaceport optimism increases at the Roundhouse

While the N.M. Legislature works through proposals intended to attract additional customers to Spaceport America with what appears to be a greater optimism than in past years, the facility’s existing anchor tenant, Virgin Galactic, continues to ramp up operations in southern New Mexico.

Virgin Galactic has increased its staffing in Las Cruces to 32 full-time employees, up from 21 in August. Many of those employees are from New Mexico or the border region, said Jonathan Firth, the company’s executive vice president for spaceport and program development.

The company’s Las Cruces office is preparing to move at least 85 additional employees from Mojave, Calif. to Las Cruces once testing of its space vehicle is complete in California, Firth said. That move will come in advance of long-awaited flights of paying customers into suborbital space from New Mexico.

Virgin Galactic is also spending new money with New Mexico contractors as it prepares for flights. To date it’s spent more than $10.4 million with “a wide range of New Mexico suppliers” that includes hotel, catering, construction and architecture firms, Firth said.

That means the company has spent an additional $1 million with New Mexico companies since Firth last provided an update to NMPolitics.net in August. “Infrastructure improvements and the creation of additional office and warehouse space are under way at Spaceport America and in Las Cruces,” Firth said.

That money doesn’t include what Virgin Galactic has paid to its New Mexico employees, which also inserts cash into the state’s economy. And to date, Firth said, the company has paid more than $9 million in rent and fees to the state for its use of a hangar at other facilities at Spaceport America, which is located east of Truth or Consequences in Sierra County.

Virgin Galactic recently completed another glide flight test in Mojave of its SpaceShipTwo vehicle. Powered flights are the next step and will “occupy our attention for most of 2018,” Firth said. Once those are complete, the move of employees and the space vehicle to New Mexico are expected.

The news comes as the mood in the Roundhouse about the spaceport seems to have shifted. In past years, skepticism of the project has been the common sentiment during legislative sessions. But during the current session, the climate has been more optimistic.

The N.M. House this week approved $10 million to build a new hangar at the facility — an attempt to convince additional companies to conduct business at the spaceport.

And during a committee debate about a bill to protect customer information from public disclosure this week, lawmakers from across the political spectrum expressed the need to do something now, before other commercial space companies opt to contract with spaceports in other states.

Spaceport America’s CEO, Dan Hicks, attributed that to his staff’s meetings with legislative interim committees over the past year and recent news that the commercial space industry is spending hundreds of billions of dollars annually worldwide. Predictions have that figure growing exponentially over the coming decades.

“There just seems to be a much stronger support for Spaceport America,” Hicks said. “I’m sensing this year in the Legislature there are leaders that understand the commercial space sector better than they have before.”

He also said Gov. Susana Martinez has been a strong supporter of the spaceport.

Firth expressed similar optimism about the spaceport’s future.

“As Spaceport America’s anchor tenant, we support the spaceport’s efforts to reach its full, sustainable potential with many tenants, and so it is exciting to see new operators being attracted to New Mexico and this great facility,” he said. “The commercial space industry is growing rapidly, and Spaceport America and New Mexico have a great opportunity to attract even more of that business.”

The funding for a new hangar, which still needs approval of the Senate and governor, was “something that we were really pleasantly surprised to see,” Hicks said. Spaceport officials don’t have a specific tenant in mind for a new hangar, but discussions with potential customers always involve infrastructure needs. Hicks said the spaceport is more likely to attract additional tenants if it can meet those needs.

The debate over shielding customer information

The controversial secrecy legislation, Senate Bill 98, is more about shielding customer information from other companies in a hyper-competitive atmosphere than it is about keeping it from the public. But a consequence of enacting the legislation is that New Mexicans, who have invested more than $220 million in the spaceport already, wouldn’t know anything about spaceport customers — even their identities or how much they’re paying in rent and fees — unless those customers agree to voluntarily release that information.

The Senate Public Affairs Committee moved the legislation forward on Tuesday with no recommendation on a vote of 7-1. It still faces a long road to approval before the session ends at noon on Feb. 15 — through the Senate Judiciary Committee, then a vote of the full Senate. If it makes it that far, the legislation would begin a similar process in the House.

Tuesday’s debate over the legislation was revealing. In a bipartisan fashion, lawmakers shot down a proposed amendment from Sen. Jeff Steinborn, D-Las Cruces, to keep customer rent and fee payments and information about environmental threats public.

But even Steinborn said he’s been a spaceport supporter since the beginning, when the state and taxpayers in Doña Ana and Sierra counties agreed to fund it a decade ago.

“I’m really rooting for the success, and they need all the tools to be successful,” Steinborn said.

Sen. Mimi Stewart, D-Albuquerque, expressed conflicting emotions about the secrecy legislation.

“I am concerned that it’s too broad — but I want the spaceport to flourish, and I want those companies to come here,” she said in voting to advance the bill.

The committee rejected a request from the N.M. Foundation for Open Government’s Peter St. Cyr to table the legislation and discuss it in a more intentional way during the interim, then come back with a reworked bill next year.

“That’s a year in which several other space launching programs will probably move elsewhere,” said the committee’s chairman, Jerry Ortiz y Pino, D-Albuquerque.

Hicks told lawmakers on Tuesday that even public disclosure of rent payments, “while that seems innocent,” can reveal clues about a commercial space company’s proprietary work. For example, rent may be structured for use of the spaceport’s vertical launch area instead of its runway. That’s why other states have agreed to provide protection from disclosure, Hicks argued.

Virgin Galactic, which has released company financial information, takes a measured stance on the legislation.

“Virgin Galactic supports the intent of the bill to protect trade secrets/proprietary information, and also recognizes this needs to be done in a responsible way that ensures the spaceport is still accountable to New Mexico taxpayers,” Firth told NMPolitics.net.

No commercial space companies were at Tuesday’s committee hearing. A spokeswoman for SpaceX, which has a lease agreement with Spaceport America but hasn’t been very active there, told NMPolitics.net the company had no comment for this story. Attempts to reach Blue Origin, another high-dollar company that New Mexico officials would like to see doing business at the spaceport, haven’t been successful.

Virginia and Florida have laws that allow more secrecy than New Mexico.

In New Mexico, Spaceport America has already been operating as though it has a law that lets it shield some customer information from the public. In response to a records request from NMPolitics.net last year, the spaceport released copies of five lease agreements with space companies. Only Virgin Galactic’s came without redactions.

Redactions included rent and fee information. Other information that was redacted in some or all of the leases with SpaceX, Up Aerospace, EXOS Aerospace and EnergeticX included sections that indicate where at Spaceport America companies are operating, insurance information – and, in the SpaceX lease, even the contact information for two company officials.

NMPolitics.net has filed formal complaints with the state attorney general alleging violations of the state’s Inspection of Public Records Act. Those complaints are pending and will remain relevant regardless of whether lawmakers approve the pending legislation. State law at the time of NMPolitics.net’s requests didn’t contain the protections for commercial space companies that lawmakers are currently considering.

On Thursday, Hicks said he was traveling back to Santa Fe to meet with the Foundation for Open Government and lawmakers to try to secure approval of the legislation that would shield customer information.

“I think across the spectrum of Democrats and Republicans, they all really want to get something in place, and so my focus is going to be, “Hey, let’s work it, let’s get it done,’ ” he told NMPolitics.net.