{"id":1471,"date":"2007-03-26T18:12:00","date_gmt":"2007-03-27T00:12:00","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/2007\/03\/memorandum-details-virgins-planned-spaceport-lease\/"},"modified":"2007-03-26T18:12:00","modified_gmt":"2007-03-27T00:12:00","slug":"memorandum-details-virgins-planned-spaceport-lease","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2007\/03\/memorandum-details-virgins-planned-spaceport-lease\/","title":{"rendered":"Memorandum details Virgin’s planned spaceport lease"},"content":{"rendered":"

\"\"<\/a>Officials from the New Mexico Space Authority<\/a> and Virgin Galactic<\/a> signed a lengthy, detailed memorandum of agreement today they said will become a lease agreement if voters in Do\u00f1a Ana County approve next week a gross receipts tax increase to help fund Spaceport America<\/a>. <\/p>\n

<\/o:p><\/p>\n

The 39-page memorandum isn\u2019t 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.<\/p>\n

<\/o:p><\/p>\n

\u201cThere should not be any question in anybody\u2019s mind that this is the immediate precursor to a lease agreement,\u201d Homans said.<\/p>\n

<\/o:p><\/p>\n

The memorandum details Virgin\u2019s intent to lease 83,000 square feet at the spaceport \u2013 about 60 percent of it hangar space for two transport aircraft that are as large as Boeing 757s and five SpaceShipTwo<\/a> spacecrafts being build by the company.<\/p>\n

<\/o:p><\/p>\n

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\u2019t been determined.<\/p>\n

<\/o:p><\/p>\n

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.<\/p>\n

<\/o:p><\/p>\n

The memorandum also states that Virgin will make Spaceport America<\/st1:country-region> its primary launch facility and will locate its worldwide headquarters somewhere in New Mexico<\/st1:place><\/st1:state>, though the location within the state hasn\u2019t been determined. The company has the option to renew the lease for another 10 years at the conclusion of the 20-year lease.<\/p>\n

\n

You can read a summary of the memorandum by clicking here<\/a>.<\/p>\n

<\/o:p><\/p>\n

The memorandum was signed today at a news conference at the Stan<\/st1:placename> Fulton<\/st1:placename> Center<\/st1:placetype> on the New Mexico<\/st1:placename> State<\/st1:placetype> University<\/st1:placetype><\/st1:place> campus. It\u2019s the first time specifics about the deal with Virgin have been released.<\/p>\n

<\/o:p><\/p>\n

\u201cThis agreement represents a significant commitment by Virgin Galactic,\u201d said the company\u2019s project director, Jonathan Firth. \u201c\u2026 We can\u2019t wait to bring our spaceship to New Mexico<\/st1:state><\/st1:place>.\u201d<\/p>\n

<\/o:p><\/p>\n

Lease and spaceport depend on tax vote<\/span><\/p>\n

<\/o:p><\/p>\n

On April 3, voters in Do\u00f1a<\/st1:placename> Ana<\/st1:placename> County<\/st1:placename><\/st1:place> will decide whether to approve a 1\/4 percent increase in the gross receipts tax to fund construction of the spaceport. The tax will be used to repay bonds. After fees and interest are paid and 25 percent is taken out to spend on spaceport-related activities in the county, the tax will generate about $49 million for construction of the spaceport \u2013 about 25 percent of the $198 million cost estimate for the facility.<\/p>\n

<\/o:p><\/p>\n

Firth and Homans said the tax election is very important to the spaceport. Many lawmakers have said they aren\u2019t willing to give any more than the $114.5 million they\u2019ve already committed to the project, but Gov. Bill Richardson is pushing hard for another $25 million.<\/p>\n

<\/o:p><\/p>\n

Without the tax money, the state doesn\u2019t have enough to construct the spaceport.<\/p>\n

<\/o:p><\/p>\n

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 Do\u00f1a<\/st1:placename> Ana<\/st1:placename> County<\/st1:placename><\/st1:place>.<\/p>\n

<\/o:p><\/p>\n

Homans said the state doesn\u2019t have another plan to secure the funding. Firth said the company doesn\u2019t have a \u201cPlan B\u201d if Spaceport America<\/st1:place><\/st1:country-region> isn\u2019t built. It is planning to partner with other spaceports around the world in the future, and has signed one agreement with Sweden<\/st1:country-region> for a secondary facility to the base in New Mexico<\/st1:state>, but plans to operate primarily from New Mexico<\/st1:place><\/st1:state>.<\/p>\n

<\/o:p><\/p>\n

Firth said the company is thinking positively about the tax election.<\/p>\n

<\/o:p><\/p>\n

\u201cAssuming it\u2019s a positive result, it\u2019ll send a positive message that the people of Do\u00f1a<\/st1:placename> Ana<\/st1:placename> County<\/st1:placename><\/st1:place> share our vision,\u201d Firth said. \u201c\u2026 It could just be the start of something amazing.\u201d<\/p>\n

<\/o:p><\/p>\n

When asked what would happen if the tax proposal fails, he said, \u201cIt would be hard to say because we haven\u2019t been thinking of that.\u201d<\/p>\n

<\/o:p><\/p>\n

\u201cWe\u2019ve been working on the assumption that this business is coming to New Mexico<\/st1:place><\/st1:state>,\u201d Firth said. \u201c\u2026 This will always be the home of Virgin Galactic.\u201d<\/p>\n

<\/o:p><\/p>\n

Homans said there were several major hurdles to building the spaceport when he began work on the project. All but two have been met \u2013 passage the local tax increases and approval of a commercial spaceport license by the Federal Aviation Administration.<\/p>\n

<\/o:p><\/p>\n

Homans\u2019 office is meeting weekly with FAA staff, and he said the license application is in \u201cvery good shape,\u201d so he said the last major hurdle is the local tax increases, with Do\u00f1a Ana County\u2019s being the primary focus.<\/p>\n

<\/o:p><\/p>\n

Paying for future costs and expansions
<\/span><\/p>\n

<\/o:p><\/p>\n

The lease won\u2019t generate enough money to pay back the state and local money that built the facility, but that\u2019s not the intent. Once the spaceport is built, the goal will be that it generates enough money for operational costs and future expansions.<\/p>\n

<\/o:p><\/p>\n

It\u2019s the resulting economic development that will be a boon to the local communities and state, proponents of the spaceport tax say.<\/p>\n

<\/o:p><\/p>\n

The facility that will be built initially \u2013 the one with the $198 million price tag \u2013 will include office and hangar space for Virgin, in addition to a runway and other common areas, including fuel storage facilities.<\/p>\n

<\/o:p><\/p>\n

Homans said the state is in talks with several small companies who want to launch from the spaceport but won\u2019t, 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.<\/p>\n

<\/o:p><\/p>\n

He didn\u2019t disclose further details about any of the companies with which the state is negotiating.<\/p>\n

<\/o:p><\/p>\n

Other spaceports<\/span><\/p>\n

<\/o:p><\/p>\n

At the news conference, Firth was asked about funding for other spaceports the company is considering using. He said Virgin isn\u2019t 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\u2019s how the company\u2019s airline division operates, and this should be no different.<\/p>\n

<\/o:p><\/p>\n

That\u2019s an important point, because many opponents of the tax say Virgin should build its own spaceport.<\/p>\n

<\/o:p><\/p>\n

Firth said the company plans to create \u201cup to 200 new jobs\u201d 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.<\/p>\n

<\/o:p><\/p>\n

\u201cYou can count that as a New Mexico<\/st1:place><\/st1:state> investment,\u201d he said.<\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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 Do\u00f1a Ana County approve next week a gross receipts tax increase to help fund Spaceport America. The 39-page memorandum isn\u2019t legally binding, but is a detailed document […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1471","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/1471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=1471"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/1471\/revisions"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=1471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=1471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=1471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}