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$20M loan OK’d for spaceport

Copyright © 2013 Albuquerque Journal

SANTA FE – Spaceport America got a green light Wednesday to take out a $20.8 million private loan to build two visitor centers in southern New Mexico, a move supporters described as an important business step for the commercial space flight venture.

Members of the state Board of Finance, including Gov. Susana Martinez, voted 7-0 to authorize the loan, which spaceport officials said could be completed within 30 days. Construction of the visitor centers could begin soon after.

“We’re thrilled,” spaceport Executive Director Christine Anderson told the Journal after the vote. “This was critical for the success of our business model.”

However, several Board of Finance members expressed concern Wednesday about the possibility state funds will have to be used to pay back the loan if the spaceport’s visitor estimates prove to be overly optimistic.

Already, $209 million in state money has been appropriated to pay for construction of the main Spaceport America facilities.

“There is no absolute assurance that taxpayers won’t at some future point be obligated to these facilities that are being financed,” board member Robert Aragon said.

In response to the concerns, Anderson and spaceport board members assured Board of Finance members that they do not intend to ask for state funding to pay off the loan. The tourist centers are projected to draw 200,000 visitors annually, a figure that would help make them financially self-sustaining, they said.

One of the two visitor centers would be a 6,000-square-foot building just off Interstate 25 in Truth of Consequences, about 30 miles from Spaceport America.

Land for the visitor center near TorC already has been purchased, and its roadside location will hopefully pique the curiosity of passing motorists, Anderson said.

From that site, shuttle buses would take visitors to a 25,000-square-foot visitor center at the spaceport. That visitor center – dubbed Spaceport Central – would include a three-dimensional theater, an exhibit hall and other features.

The Spaceport Authority has already funded the design and furnishing of the visitor centers, Board of Finance members were told Wednesday.

“What we need is money to build those two buildings,” Anderson said.

Under the proposed terms for the loan, Spaceport America would have 21 years to pay back the loan with a 3.8 percent interest rate. Payment on the loan would not start until construction is complete, spaceport officials said.

Meanwhile, three different investment banks have shown strong interest in funding the loan, Anderson said.

Money to gradually pay back the loan would come from two primary sources – visitor fees and an annual licensing fee that would be paid to the spaceport by a third-party vendor hired to run the tourist centers.

The Board of Finance’s approval for the $20.8 million loan is the latest step forward for the spaceport, which appeared to face an uncertain future when Martinez took office in January 2011.

After taking office, Martinez replaced the board of directors for the spaceport and ordered a financial audit of the construction costs of the project, while saying the state could no longer be the spaceport’s “major financier.”

The endeavor has picked up steam recently, however, as Martinez earlier this year signed into law legislation that exempts spacecraft parts manufacturers from liability lawsuits by passengers. That legislation had been sought for several years by Spaceport America and Virgin Galactic, the spaceport’s anchor tenant.

Virgin Galactic completed an April test of its rocket-powered space vehicle in the Mojave Desert.

Company officials say more than 600 passengers – who will pay $200,000 per person to be rocketed more than 60 miles up from the Earth’s surface – have put down deposits for flights from Spaceport America. The flights could begin as soon as the end of this year.

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