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Virgin Galactic crash leads Spaceport to seek extra funding this session

The back side of the Virgin Galactic Gateway to the space terminal/hangar building is seen from the main road into the Spaceport America facility. (Jim Thompson/Albuquerque Journal)

The back side of the Virgin Galactic Gateway to the space terminal/hangar building is seen from the main road into the Spaceport America facility. (Jim Thompson/Albuquerque Journal)

LAS CRUCES — Spaceport Authority officials had already prepared their request for the upcoming legislative session when a tragic accident during a test flight for Virgin Galactic’s spacecraft on Oct. 31 upended all of their revenue expectations for the coming fiscal year at least.

As a result, they have requested an additional $1.7 million from lawmakers when they meet for a 60-day session starting Tuesday. The funding would be a special appropriation, on top of the general appropriation they had already prepared, and would only be used if needed, Spaceport Authority Executive Director Christine Anderson said.

“It’s important to have that cushion,” Anderson said. “We’re very actively seeking other customers in a variety of business sectors, so I’m hoping we don’t need all of that. But, it’s prudent to have it.”

Gov. Susana Martinez included the $1.7 million in her budget proposal unveiled last week in Las Cruces.

“It has been difficult, in the revenue that had been expected by now to be generated. But we are optimistic and that is why we’re investing,” she said.

Sen. John Arthur Smith, D-Deming, who chairs the Senate Finance Committee, questioned if the extra funding was needed, given that Virgin Galactic has agreed to continue making lease payments.

“There was a concern after the accident that Virgin Galactic would suspend their payments, and I’m told that’s not going to be the case,” Smith said.

What the spaceport won’t receive, however, is the anticipated revenue from wealthy customers paying thousands of dollars for trips aboard the Virgin Galactic spaceship. Not for a while, anyway.

Anderson said they will also make a capital outlay request for a new hangar. The $4.5 million hangar would not be as elaborate as those built for Virgin Galactic, she said. But, if the spaceport is going to attract new companies they are going to need another hanger, she said.

Sen. Lee Cotter, R-Las Cruces, has prefiled legislation similar to a bill he introduced last year that would prohibit the Spaceport Authority from using money collected from a local spaceport tax for anything other than paying off the bonds related to that tax. The Spaceport Authority has used a portion of that revenue after making the required bond payment to help cover operations.

“That excess revenue is very dear to us,” Anderson said. “While we’re seeking more customers, it’s very important.” And, it will not extend the time period for paying off the bond, she added.

Cotter’s bill this year would also go two steps further. It would prohibit the Spaceport Authority from being able to issue other bonds in the future, or to take out loans. He said he was troubled to learn that the Spaceport Authority had tried to secure a loan for a visitors center that was eventually nixed by the New Mexico Finance Authority,

Cotter said the original bill establishing the Spaceport Authority has no controls over its bonding and borrowing capacity.

“When I got to the fine print in the bill, we could repay all $76 million and float a new bond without county permission and without voters permission,” he said,

That’s not the case, Anderson said. The Spaceport Authority could seek another bond in the future, she said. But, it would have to go through a county, though not necessarily Doña Ana County, and it would have to be approved by the voters.

“There’s no further bonding capacity on these bonds,” she said. “We would have to go to the voters, they would have to decide.”

Anderson said there are no current plans to seek additional bonding, but it is something her replacement may need 10 or 20 years down the road.

And, she said that, by law, any loan the Spaceport Authority would take out would have to be secured with private funding, not state funding.

“That would be like saying to a private company, you can’t get a loan, period. It’s kind of a crippling thing to do,” Anderson said.

That’s not his intent, Cotter said. He said it is the state, and not local taxpayers, who should be supporting operations at the spaceport.

“The state agreed to pay when we passed the bill to begin with, and I think they should live up to their obligation,” he said.

Garrett said the county has been in discussions with state agencies about having the state take ownership of the southern road. One proposal was a maintenance swap, where the county would take over maintenance of state roads within the county, and the state would take over the spaceport road.

“The main thing right now is simply having the Legislature recognize that it makes sense for the southern road from Upham to be a state highway,” Garrett said. “We’re talking about a major economic resource that could potentially benefit New Mexico in general.”

Garrett said they hope to at least get the conversation started this year, understanding that revenue is expected to be down this year because of a drop in oil prices.

“The priority is to get it listed as a potential project if money becomes available,” he said.

Anderson said they have funding to begin work on the road, but are still awaiting completion of a review by the U.S, Bureau of Land Management.

Walter Rubel can be reached at 575-541-5441.

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©2015 the Las Cruces Sun-News (Las Cruces, N.M.)

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