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.