Moneypit America: NM Spaceport Asks State Government for $60 Million More

Interior of the Gateway to Space in New Mexico. (Credit: Virgin Galactic)

by Douglas Messier
Managing Editor

In the same week Virgin Galactic went public following a $774 million merger, the head of the New Mexico spaceport where Richard Branson’s space tourism company serves as anchor tenant was seeking an additional $60.3 million in tax dollars.

The Santa Fe New Mexican reports that CEO Dan Hicks is seeking $3.6 million in the next fiscal year to expand the New Mexico Spaceport Authority’s (NMSA) staff, an increase from $1 million the authority receives currently.

That would allow the port to increase its full-time staff from 32 employees to 40, which Hicks said would help his operation manage the spaceport’s vertical and horizontal launch sites.

“Right now, I cannot support Virgin’s flights and also support the vertical launch area at the same time,” Hicks said.

The port also is asking for a $57 million appropriation for capital outlay projects, which would pay for a welcome center, an IT facility, and payload and vehicle processing facilities for companies using the spaceport.

“All of them have a need for the New Mexico Spaceport Authority to have a processing facility,” Hicks said. “But if I were to go to Virgin and say, ‘OK, you want to use something like that, well you pay for it,’ that just isn’t going to happen.”

Virgin Galactic completed a deal last month under which Branson sold nearly half the company for $774 million to Social Capital Hedosophia, an investment company that was already publicly traded. Virgin Galactic then went public last Monday under its own name.

Branson was on the floor of the New York Stock Exchange to ring the opening bell on the day the company went public. The contrast of the billionaire being feted on Wall Street during the same week Hicks was asking for more millions more from taxpayers could not have been a good one for supporters or critics of the spaceport.

New Mexico taxpayers have spent more $225 million developing Spaceport America, which was custom-built for Virgin Galactic as a location to fly tourists to suborbital space.

When the deal was announced in December 2004, Virgin Galactic expected to begin commercial flights in 2009 or 2010. The company expected to fly 50,000 tourists to space aboard a fleet of SpaceShipTwo vehicles by the end of 2019.

To date, the company has flown two suborbital flights and zero paying passengers from the Mojave Air and Space Port in California. Additional suborbital flight tests from Spaceport America are planned for next year, with commercial flights beginning no earlier than June 2020.

New Mexico planned to use the spaceport and Virgin Galactic’s presence there as the foundation of a large aerospace cluster that would generate $750 million in total revenues and employ more than 3,500 people by 2020.

Despite attracting other tenants and Virgin Galactic moving personnel to New Mexico, the spaceport has fallen far short of revenue and employment goals.

That has helped increase the total number of spaceport-related jobs to around 250 from 50 in four years. Virgin’s decision to move more staff to the area — announced in May at a splashy news conference that included Branson and Gov. Michelle Lujan Grisham — also has helped. The company now employs 140 people living in Southern New Mexico, compared with 40 at this time last year.