Spaceport America Board Approves Spending $20 Million for New Capital Projects

by Douglas Messier
Managing Editor

Fresh off a stinging report saying that it failed to properly oversee a state-owned facility rife with fraud, waste and abuse, the New Mexico Spaceport Authority (NMSA) Board of Directors approved spending up to $20 million on capital improvements to Spaceport America.

The Las Cruces Sun News reports that at its Nov. 2 meeting, the board approved spending up to:

• $9 million for a technology and reception center near spaceport’s main entrance
• $8 million for improvements to the spaceport’s vertical launch area;
• $2.2 million for a sole source contract to UP Aerospace to construct a launch rail
• $750,000 for repairs to the spaceport’s operations center, which suffered damage due to poor drainage work when it was constructed in 2019.

The New Mexico Legislature approved spending on the four capital projects during its 2019 session. 

Board members also postponed action on a proposal to save a projected $9 million by refinancing the authority’s debt service. Directors wanted further analysis of the plan from business development director Scott McLaughlin, who is serving as the spaceport’s interim director.

New Mexico taxpayers have spent about $250 million building and expanding the spaceport, which was purpose built to serve as the home of anchor tenant Virgin Galactic.

When Virgin Galactic Founder Richard Branson and then-Gov. Bill Richardson announced plans for the spaceport in December 2004, plans called for space tourism flights to begin in 2009. They predicted Virgin Galactic would fly 50,000 tourists within a decade.

Fifteen years later, the number of tourists flown stands at zero. Commercial service is now forecast to begin in 2021 if a series of upcoming suborbital flight test go well.

Virgin Galactic pays lease and rent fees at Spaceport America. It will also pay additional fees based on the number of suborbital flights and passengers that fly from the facility.

The delays in starting commercial service have forced the spaceport authority to look to taxpayers to fund operations and expansion that would have been paid for by flight revenues.

A recent outside investigation into spaceport operation recommended the state government consider criminal and/or administrative charges against former Executive Director Dan Hicks and ex-CFO Zach DeGregorio for their handling of the authority’s finances.

The two men were accused of violating statutes and rules when awarding and managing contracts, approving travel expenses, and hiring employees.

The report said Hicks wasted hundreds of thousands of dollars pursuing projects that were neither practical nor in keeping with the spaceport’s purpose. Employees told investigators that Hicks was incompetent and bullied subordinates.

DeGregorio left the spaceport authority in June. Hicks was placed on administrative leave that same month, and he was fired in October after receipt of the outside investigation.

Investigators also concluded that former NMSA board Chairman Richard Holdridge failed to provide proper oversight of spaceport operations. New Mexico Economic Development Secretary Alicia Keyes replaced Holdridge as had of the board earlier this year.

At its meeting on Wednesday, board members accepted a recommendation by Keyes that the state Attorney General’s office review draft bylaws being written to improve operation of the spaceport and correct shortcomings identified in the investigation.