Did RGF blow it on the Spaceport? Corrected/Addendum added

Great, New Mexico taxpayers are now on the hook for another $21 million for the spaceport. The money is supposedly needed to build two visitor centers for the facility. This is on top of the $209 million the taxpayers put up to pay for the project in the first place.

RGF has been a long-time opponent of taxpayer support for the Spaceport, but we did support efforts to create liability protections for the Spaceport during the 2012 and then 2013 sessions (the protections were adopted in the 2013 session).

While we stand by both views on their merits and I still hope the taxpayers are able to see some benefit from this facility, I wonder: absent the liability protections, would Virgin Galactic just have picked up and left us alone? Would we have to fork over another $21 million (not to mention maintenance on the entire project and other potential projects like the extended runway).

In other words, should we have just helped the trial lawyers kill the project entirely when we had the chance? Comments welcome.

We have to admit that between Aragon’s comments in the article “There is no absolute assurance that taxpayers won’t at some future point be obligated to these facilities that are being financed” and the fact that the Spaceport Authority had to go to the Board of Finance, that we assumed that taxpayers could legitimately be on the hook for all or part of the $21 million. Then I received a call from Aaron Prescott with the Spaceport Authority which puts my mind at ease to a large extent:

This $20.8M loan is entirely privately sourced, with no burden on the taxpayer. It has been sought as a way to bring private money into the project for the first time, and to take advantage of historically low interest rates. We are answering Gov. Martinez’s call for private investment and public private partnership.

NMSA’s underlying statute, the Spaceport Development Act (NMSA 1978 §58-31-1 et seq.), permits NMSA to seek private loans on the condition that 1) it cannot pledge the full faith and credit of New Mexico or create a general obligation of the state, and 2) the financing package receives approval by the State Board of Finance. Our banks are fully aware of the lack of a taxpayer backstop (it will be in the loan documents), and the Board signaled its approval yesterday.

Today’s ABQ Journal coverage of the loan had an accurate quote from SBOF member Robert Aragon, but it was in the context that just because it is state law that the taxpayers won’t be obligated by our loan, doesn’t mean it couldn’t happen.

His comments notwithstanding, NMSA fully intends to obey its own enabling legislation. The only collateral in this loan is the project being financed, i.e. buildings and land.

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6 Replies to “Did RGF blow it on the Spaceport? Corrected/Addendum added”

  1. I still cannot understand why it was acceptable to give Virgin Galactic protection from product liability, but not New Mexico owned and operated businesses and products, which I favor. But to a wealthy out-of-state firm, it is crony capitalism – pure and simple!

    And, did I miss if the media reported that a local, county or state entity will not pay operating expenses, including maintenance, for the visitor centers.

  2. Privately funded? Well, OK, but who are the funders and the terms? Will “the funders” have first lien on ALL Spaceport revenues, and leave us tax payers sucking you know what?

    Inquiring tax payers need to know.

  3. What revenue stream was pledged to pay off this loan? I don’t think most New Mexicans understand you just can’t “visit” the Spaceport. You have to go to one of the Welcome Centers and then take a shuttle van. Current cost is around $200 for a family of four. And then if you actually want to get near the taxpayer funded $209 million terminal building, I read that would be an extra cost “behind the scenes” on-site tour. 200,000 visitors a year? How many of those will actually be the people who paid for this in our rank at or near the bottom in every economic category?

  4. Dear NM Tax Payers,

    They are working for you to bring in much needed tourism to the State of New Mexico. This will generate $’s for the state. You should all be supporting and
    thankful such a project is happening. This is a hugh project with hugh potential. Stay positive and we will all benefit greatly even neighboring states and the whole United States. We should all count our blessings cause they are great on this protect. Go Spaceport America

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