Copyright © 2015 Albuquerque Journal
TRUTH OR CONSEQUENCES – Spaceport America’s spectacular 12,000-foot runway in the middle of the desert is quiet most of the time.
New Mexico has tacked its hopes onto the idea that one day it will be busy: that aspiring “spaceline” Virgin Galactic will transform the runway into a “spaceway,” rocketing well-heeled passengers to space and back.
But after a fatal accident during a test flight last fall, the company’s timeline for takeoff is again pushed back indefinitely, forcing the state to come up with a new business plan.
Virgin Galactic says its new SpaceShipTwo is about 75 percent complete. Testing will resume when the spaceship is ready to fly, but the company has previously said that is not anticipated until next year.
Christine Anderson, executive director of the New Mexico Spaceport Authority, is scheduled to present the updated business plan next month for the $218.5 million, taxpayer-funded facility – one that further expands potential revenue sources beyond Virgin Galactic.
Anderson previewed the plan for the Journal, saying Spaceport will target new tenants, including emerging companies in the “new space” industry; commercials like the recent Land Rover spot shot on site; tourism; special events; and merchandising.
Education remains central to the spaceport’s mission, Anderson said, but not as a revenue source.
Financial independence still hinges on Virgin flying one day, she said, but there are many other opportunities to pursue in the meantime. The goal is to decrease the portion of the operating budget covered by legislative appropriations.
In fiscal 2015, Spaceport America covered 60 percent of its $2.6 million in expenses with revenue from business propositions – namely the $1 million Virgin Galactic pays for its lease plus tourism, events and commercials, Anderson said. The rest was covered by about $450,000 from the state’s general fund, as well as funds rolled over from prior years and a payout of excess pledged revenue from the construction bonds.
The new five-year business plan updates a 2013 edition. A review of that plan reveals missed targets.
One example: “By fiscal year 2014, the operational budget of the NMSA must be completely covered by income generated from its launch services and other business sectors,” the 2013-2018 plan said.
“The goal is that none of this be paid by the state, whether from space or nonspace revenue,” Anderson said. “It’s going to take a few years.”
Both critics and supporters say new revenue streams can’t come soon enough.
The Legislature has funded spaceport operations at around $450,000 per year for the past three years. It has also covered $142.1 million in construction costs, while Doña Ana and Sierra counties have footed $76.4 million of the construction bill through a gross receipts tax.
Billy Garrett, chairman of the Doña Ana County Commission, said he supports Spaceport America but views it as a “relatively high-risk, long-term investment” that requires new strategies so that taxpayers “can see some real, tangible returns on the investment they’re making.”
“It takes a long time to get businesses committed to what we have to offer in New Mexico,” he said. “That should have started from the very beginning, in my opinion. I think it has been a weak effort that has been overly reliant on Virgin.”
Anderson frequently notes the spaceport team had been, until recently, concentrating its efforts on completing construction. With the build-out largely finished, Spaceport America is ready to begin marketing itself, she says – and earlier this month hired a marketing director to lead that effort.
Spaceport America’s iconic terminal is leased to Virgin Galactic for 20 years, but the runway is open for any business, Anderson said. Spaceport America boasts 18,000 acres of land and 6,000 square miles of restricted air space that companies testing new space technologies need, she said.
SpaceX – one of two companies with cargo contracts to deliver goods to the International Space Station on NASA’s behalf from Cape Canaveral, Fla. – is Spaceport America’s second tenant. SpaceX has a five-year lease and has invested $2 million in facilities and a vertical launch pad, where it plans to test its Falcon 9 rocket for reusability.
Spaceport America also has a la carte customers such as Albuquerque’s UP Aerospace and Texas-based Armadillo Aerospace, which have used the spaceport to launch experiments and commercial payloads and to test developmental rockets. Anderson envisions signing on additional tenants and launch customers.
The range of companies to target is broad. As NASA has turned its focus to deep space exploration, commercial enterprises are sprouting to take over other aspects of near space travel and investigation.
“A lot of these companies have different purposes,” Anderson said. “Some are developing medicines, delivering goods and services; some are developing products.”
Stephan Reckie of Colorado is an “angel investor” in new space, a sort of venture capitalist targeting startups that need a cash infusion of under $1 million.
His company, Angelus Funding, has invested in space tourism with a stake in WorldView Enterprises, which says it is considering launching space tourists from Spaceport America via a high-altitude balloon, and in NanoRacks, a company working on a range of space products and services, and in a reality show aiming to send people to the space station.
Finding “the true startups that will get to sustainability” is the “Holy Grail,” he said, but the industry is moving slowly as companies work to bring down the cost of flying to space.
With so many new space companies in the testing phase, there is a growing amount of commercial cash and less dependence on federal dollars, said Ed Harris, director of partnerships with CASIS, a nonprofit that seeks to link space startups with investors.
Spaceports should look at attracting companies testing new technology, some of which may become industry leaders in the future, he said.
“There is not enough going on at Spaceport America right now for an investor to come out and look at it,” he said. “But there is the possibility that that could happen.”
Branding and events
Photo shoots, commercials, sponsorships, corporate events, weddings: Anderson sees Spaceport America as a venue for hire, particularly when “people want to link their brand to our brand.”
Nike and J. Crew, U.S. car brands Ford, Dodge and GMC, and British automakers Aston Martin and Jaguar Land Rover are among companies that have done advertising or public relations at Spaceport America. Anderson declined to say what any of these companies – or Spaceport’s launch customers – pay to use the facility, citing ongoing negotiations with new customers.
Anderson envisions selling Spaceport America merchandise online and through “global partners in other countries.”
Merchandising “generates revenue, but it also generates brand awareness.”
Spaceport America recently offered a preview to a couple of dozen middle-schoolers and parents of its “Gateway Gallery,” a room with a view of Virgin’s hangar, filled with interactive video games, displays and a G-shock simulator ride.
There is pent-up demand for spaceport-related tourism, said Frances Luna, Sierra County Commission vice chairman.
“We’ve been seeing tourists coming to the area constantly, wanting to see something, to go to a place that talks about the spaceport, to see the facility,” Luna said. “It’s great. But the spaceport is behind the curve four to five years.”
Anderson envisions formal, $59 tours, beginning in June, with the opening of the Gateway Gallery and a new temporary visitors’ center planned for downtown Truth or Consequences, a little more than 30 miles away.
“We’ve welcomed 3,000 visitors per year,” Anderson said. “We hope that is going to get into the six digits shortly.”
Jeffree Dukatt runs an eclectic souvenir shop on the road through Truth or Consequences heading to the spaceport. Dukatt has added spaceport-themed T-shirts to an impressive collection of tie-dye. They’re not big sellers yet, but he has high hopes.
“A lot of people from out of state, especially out of the country, want to go out there and look at it,” he said. “They want to see part of history. They want to see it because it’s new.”