$1B in Spaceport impact projected by FY2024 - Albuquerque Journal

$1B in Spaceport impact projected by FY2024

Virgin Galactic Mothership VMS Eve is pulled into the hangar at the Spaceport America in Upham, N.M. after a test flight . Photographed on Thursday August 15, 2019. Adolphe Pierre-Louis/Journal

Copyright © 2020 Albuquerque Journal

Spaceport America is poised to become a major economic engine in southern New Mexico with nearly $1 billion in accumulated economic benefits for the state by fiscal year 2024, according to a new report unveiled at the Legislature on Thursday morning.

The study, prepared by accounting firm Moss Adams under contract with the NM Spaceport Authority, says the Spaceport has already achieved positive returns on the state’s $220 million investment, with $33 million in direct economic impacts in FY 2019 alone, and $141.5 million in total accumulated impacts between FY 2016 and FY 2019.

Apart from such direct benefits as new high-wage jobs, the totals include “indirect” impacts from increased spending at local businesses, plus “induced” benefits from increased economic activity in general as more money circulates through the local economy.

Taking all those things together, the report projects $956 million in total accumulated economic impacts for the nine-year period between FY 2016 and FY 2024.

That reflects an expected ramp up in activities as Virgin Galactic begins commercial spaceflights this year and as other companies increase their operations at the Spaceport, said Moss Adams Consulting Director John Tysseling, who discussed the new report at a news conference in the Roundhouse with Gov. Michelle Lujan Grisham and Spaceport CEO Dan Hicks.

“As of FY 2013, the Spaceport became a positive revenue generator in economic and fiscal terms for the state of New Mexico, and projections show the picture just keeps getting better,” Tysseling said. “We expect a dramatic expansion of activities.”

Apart from Virgin Galactic, which is widely expected to begin flying tourists to space this year, other companies are intensifying their suborbital launch activities at the Spaceport, and new firms are signing agreements to operate there.

At Thursday’s news conference, the governor said two more space firms, TMD Defense and Space and White Sands Research and Developers LLC, are preparing to launch vehicles for the first time this year at Spaceport America.

TMD, a 30-year-old company that primarily manages contracts with the U.S. Department of Defense, will begin testing ballistic missiles at the Spaceport this fall. It’s relocating 10 engineers and support staff from its current headquarters in El Paso to Las Cruces, with plans to do four to six launches a year, as well as ground testing at the Spaceport.

Las Cruces-based White Sands Research and Developers has a proprietary suborbital rocket that it has launched seven times since 2015 from other places, but going forward, its launch operations will be based at the Spaceport, beginning with two rocket flights this year.

With Virgin Galactic gearing up for commercial spaceflight and other companies establishing operations here, New Mexico is emerging as a national and international leader in the space industry, Lujan Grisham told event participants.

“This is the year we demonstrate just how successful our aerospace investments are,” the governor said. “This year we’ll lead the world in a brand new industry and frontier.”

The Moss Adams report presents three potential forecasts on economic impact through 2029, including a conservative “baseline” projection, considered the most likely development scenario; an “optimistic” outlook with much higher benefit projections if Spaceport activities accelerate faster than expected; and a “pessimistic” estimate if activities evolve slower than anticipated.

Under the baseline scenario, the report projects annual direct economic impacts to grow from $33 million in FY 2019 to $119 million by 2029. If indirect and induced benefits are included, the total impact would expand from $56 million last year to $197 million in 2029.

The Spaceport workforce is projected to grow from 150 full-time employees now to 429 by FY 2024, and 516 by FY 2029.

The report lists government revenue – or the fiscal impact from fees, leases and taxes – separately from economic impacts. That income is expected to grow from $16.6 million collected in FY 2019 to $32.2 million in FY 2029.

The report also compared Spaceport America’s competitive advantages with 11 other U.S. spaceports now licensed to operate by the Federal Aviation Administration and concluded that New Mexico is in a “leading position” to compete with other facilities.

Among the key advantages is the Spaceport’s location next to White Sands Missile Range, allowing it to operate in 6,000 miles of restricted airspace, an area larger than the state of Connecticut. In contrast, all other U.S. spaceports must work with the FAA to divert commercial airlines every time a rocket is launched.

In addition, apart from Space Florida, Spaceport America is the only other U.S. spaceport that offers both vertical and horizontal launch capabilities.

Although the report didn’t quantify the Spaceport’s impact on education and workforce development in New Mexico, it emphasized the facility’s significant potential to reinforce science, technology, engineering and math, or STEM, education in the state.

Spaceport educational outreach efforts have reached thousands of K-12 and university students around the state, helping to inspire interest in STEM careers, Lujan Grisham said.

“(The Spaceport) helps diversify our economy with productive, competitive and exciting careers for young people,” the governor said. “… Apart from encouraging STEM education, it’s creating high-wage jobs that generally start at $80,000 a year.”

Among other things, the facility hosts the annual Spaceport America Cup, the world’s largest advanced rocketry and engineering competition, which brought about 1,500 university students from 14 countries last June.

Engineering teams from the University of New Mexico and New Mexico State University both competed in the rocket launch competitions, while also competing against each other in a separate “Chile Cup” face off.

Lujan Grisham presented an award to the winning UNM team at Thursday’s news conference.

“Through the Chile Cup, we’re highlighting some of the world’s best engineering and STEM students who are being educated right here in New Mexico,” the governor said.

$1B in Spaceport impact projected by FY 2024

New report says facility generating positive returns

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