SpaceX seeking up to $5 million more in spaceport funding from state

Posted January 29th, 2018

SpaceX is seeking new state funding to build a commercial spaceport in Texas, even though the high-profile project that it began near Brownsville in 2014 is behind schedule and millions in state tax dollars already set aside for it have yet to be spent. 

Hawthorne, Calif.-based SpaceX — founded by billionaire entrepreneur Elon Musk with the aim of reducing the cost of space travel and one day facilitating the colonization of Mars — is seeking up to $5 million more from the state to help build infrastructure related to the launch facility at Boca Chica beach outside Brownsville, a Cameron County official has confirmed. 

Meanwhile, McLennan County — which encompasses Waco — also has applied for some of the same state spaceport funds through an entity it has created to develop a spaceport. 

Kris Collins, an official with the Greater Waco Chamber of Commerce, declined to reveal the name of the aerospace company that McLennan County has been working with on a potential spaceport project. However, SpaceX already has a major rocket design and testing facility in McGregor, which is near Waco, and the company previously has been awarded local incentives for economic development. 

SpaceX declined to comment. 

About $15.3 million in state funding already has been set aside for SpaceX’s planned Boca Chica spaceport, but only about $3 million has been disbursed so far — and SpaceX has returned a small portion because it has fallen short of hiring goals as the project failed to keep pace with its original timetable. 

Boca Chica is in Cameron County, about 20 miles east of Brownsville at the southernmost tip of the state, where Texas 4 dead-ends into the Gulf of Mexico. Musk initially said that SpaceX will invest $100 million at the site, and he predicted it could be sending up rockets by late 2016, although that date since has been pushed to late 2018 at the earliest. 

New state money for the project would come from a highly specific state economic development fund, called the Spaceport Trust Fund. No more unencumbered money had been left in the fund until the Texas Legislature quietly added $5 million to it last spring during final negotiations over the state budget. 

In 2016, a SpaceX executive advocated during a joint legislative committee hearing that more money be put into the fund, saying at the time that SpaceX planned to push lawmakers for an infusion during the 2017 legislative session. 

Cameron County Judge Eddie Treviño Jr. said the Cameron County Spaceport Development Corp. recently applied for the new state money at the request of SpaceX. He said he didn’t have additional details, and Nick Serafy, who chairs the county’s spaceport development corporation, declined to comment. 

McLennan County applied for the money through its own spaceport development corporation. Collins declined to provide details of McLennan County’s potential project. 

Under eligibility requirements to receive funding from the Spaceport Trust Fund, local governments must form spaceport development corporations and they must be working with “a viable business entity” that has “the financial, managerial and technical expertise and capability necessary to launch and land a reusable launch vehicle or spacecraft.” 

The money is intended to help pay for “infrastructure necessary or useful for establishing a spaceport.” 

Only three Texas counties have formed spaceport development corporations — Cameron, McLennan and Midland -- meaning they’re the only counties eligible for the funding. Midland County was awarded about $2 million from the spaceport trust fund in 2014, but the company it initially had been working with — XCOR Aerospace — filed for bankruptcy last year, and Midland County hasn’t applied for any of the new spaceport funds now available. 

In November, Gov. Greg Abbott’s economic development and tourism division issued a request for proposals from county spaceport development corporations interested in applying for the $5 million in new funding, with applications due last month. A spokeswoman for Abbott said the division merely acted at the behest of the Legislature in seeking the proposals — because the money was appropriated for the specific purpose of a spaceport — and currently is weighing the applications. 

The funds were added during a conference committee last year between Senate and House negotiators as they hashed out differences over the state budget. The funding was part of a House budget rider, and a spokesperson for state Rep. John Zerwas, R-Richmond — the House’s top budget writer — referred questions about it to state Rep. Rene Oliveira, D-Brownsville, who did not respond to requests for comment. 

Two South Texas lawmakers who were members of the budget conference committee — state Rep. Oscar Longoria, D-Mission, and state Sen. Juan “Chuy” Hinojosa, D-McAllen — also didn’t respond to requests for comment. 

Caryn Schenewerk, SpaceX’s director of governmental affairs, attended a 2016 legislative committee hearing at the campus of UT-Rio Grande Valley in Brownsville and urged lawmakers to replenish the Spaceport Trust Fund. 

“One of the things I want to highlight for you is that, unfortunately, the Spaceport Trust Tund was not funded in the 84th Legislature and we will certainly be advocating for it to be considered by the 85th (which took place in 2017) and for it to be part of the budget in the 85th Legislature,” Schenewerk said at the time, according to the Rio Grande Guardian. 

“By contrast, Florida consistently funds its space infrastructure fund to a tune of $20 million a year,” she said. “Those infrastructure matching grants go to exactly the kind of activities that we are undertaking at Boca Chica. They are public-private partnerships for investing specifically in what is so costly an undertaking — the infrastructure.” 

A total of $13 million from the Spaceport Trust Fund was earmarked for SpaceX’s project at Boca Chica beach in 2014, but only $2.6 million of it has been spent. In addition, SpaceX has been pledged $2.3 million from the state’s jobs-focused Texas Enterprise Fund, but only $400,000 has been distributed to it — and the company has returned about $81,000 of that sum — because the project hasn’t kept pace with employment targets. 

The slower-than-expected rate of development at the Boca Chica spaceport is partly the result of difficulties building on the beach after the bedrock proved to be deeper than expected and the water table turned out to be higher than expected, prompting SpaceX to bring in hundreds of thousands of cubic yards of new soil to stabilize the site to support future structures. 

Other slowdowns have been caused by the company’s focus on more pressing issues after one of its rockets exploded in 2015 shortly after liftoff from a leased launch pad at Florida’s Cape Canaveral Air Force Station and another exploded on the pad in 2016, temporarily grounding some of SpaceX’s commercial operations both times. 

Musk -- who started electric car-maker Tesla, among other companies, and is known for bold and futuristic pronouncements -- said during the Boca Chica groundbreaking in 2014 that rockets launched from the site would carry commercial satellites at first but it eventually could be critical to establishing a human presence on Mars. 

“It could very well be that the first person that departs for another planet will depart from this location,” Musk said at the time.