To the sound of thundering engines and applause from spectators, Virgin Galactic began launching commercial space flights out of New Mexico’s Spaceport America last June. But just months after its first commercial launch, the company announced a series of layoffs, and said it would pause spaceflights in mid-2024 to focus on developing a new fleet of ships.
Just northwest of the spaceport in the town of Truth or Consequences, skepticism is brewing. The town is the government seat of Sierra County, and its citizens pay a tax that helps fund Spaceport America. After years of promises from Virgin Galactic and hundreds of millions of public dollars invested, many in the T or C community are wondering whether or not the spaceport can bring meaningful change to the community.
Ingo Hoeppner is a business owner and recently elected city commissioner for the town. He said while he’s happy to see young people getting involved in STEM fields, the spaceport has fallen short of expectations.
“How they spoke about it, and how we got excited about it. It was like being young again,” he said. “As it stands right now, I think the cities and counties can benefit more from the money. You invest in something, you want to see a return, and that return we really don’t see.”
As a newly elected city commissioner, Hoeppner said he’d like to see an expansion of educational programs, but not at the continued expense of the citizens of T or C.
“We [supported], we helped you get off the ground with our money,” he said. “It is time that we can take our wheels off and you can drive on your own.”
Spaceport America was initially built with nearly $220 million in public funds, but some local officials feel the money could be used more effectively elsewhere. Rolf Hechler, the mayor of T or C, said he’s open to the idea of pulling back monetary support from the taxpayer-funded facility completely.
“That’s kind of where I am right now is trying to figure out the mechanism to see if we can even claw back the bond, if we should claw back the bond,” Hechler said. “And if we want to, where do the citizens in our community stand? That money would secure us being able to sell bonds to build a new recreation center, for instance. Now that would directly impact our citizens in this community in a much more positive way I think than [Spaceport America] is right now.”
Executive Director of the New Mexico Spaceport Authority Scott McLaughlin said that while Virgin Galactic’s layoffs are a setback, he still believes the spaceport has the potential to bring a thriving industry that extends through New Mexico and West Texas.
“We went from about 300 employees in the area to something around 200 in the Las Cruces and Sierra County area. So we still have good economic impact, but it’s not as much as we would like, but it will build back up in about 18 months,” he said. “It is a problem that we’re going to have to wait a little longer for [Virgin Galactic] to do this. But when you start doing something that no one has ever done before, there are going to be problems, there are going to be things to be learned, and we see that with new technologies, and we certainly see it with going to space.”
Virgin Galactic President Mike Moses said the company’s new fleet of spaceships that are currently in development could increase revenue brought by spaceflights by a factor of 12. And even with the pause, he said Virgin Galactic is having a positive impact on surrounding communities.
“We have employees that are spending money every single day, their tax dollars are working, their consumer dollars are out in the local businesses. If you just look at our flight rate and you value the relationship that Virgin Galactic brings to the state just by the number of flights, that’s clearly a big deal. But there’s a footprint of employees that are here every single day.”
Moses said that Virgin Galactic is committed to continuing operations out of Spaceport America for the foreseeable future.
“These deals that were struck 15, 20 years ago, envisioned a model that didn’t come true on either side. There are no more tenants out there other than us. And so we’re footing the entire bill. There are other users and other revenue, so it’s not like NMSA’s not getting a little bit of extra revenue, but there’s no permanent presence on a daily basis with the number of employees we send out there every day, ” he said. “What was sold back then was a very big, rosy picture. And it’s taken a long time to get there. I guess my request and my ask of everybody is, let's focus on what we have in front of us, and let’s get a win-win scenario for everybody. Because that’s what we’re committed to.”
Down in Las Cruces, Doña Ana County Commissioner Shannon Reynolds said frustration is mounting with years of delays and unrealized potential coming from both Spaceport America and Virgin Galactic. Much like Sierra County to the north, Doña Ana county residents pay taxes toward the Spaceport.
“I can understand why the frustration is there, because if I told you that, if you make an investment in me, I’ll get you a return in two years, three years, four years. And now, here we are almost 20 years later. I can’t imagine you would be happy about that,” he said.
According to an economic impact report released last summer by The Arrowhead Center at New Mexico State University and the Center for Border Economic Development, in conjunction with the New Mexico Spaceport Authority, Spaceport America was directly responsible for 549 jobs and nearly $13 million generated in federal and state taxes in 2022. But Commissioner Reynolds said the economic impact doesn’t cover the amount of money that the county is collecting and investing every year, based on his analysis.
“How much benefit are we [really] getting in the community? From the government side of it, it’s not enough,” he said. “We are obligated as a county to simply pay the bonds that we secured in 2009 – 2010. When we finish paying off the bonds in 2029, then I will recommend, if I have anything to say, I will recommend that we pull out of the spaceport until we see the economic development that provides us a benefit that we can get a return on the money we put into it.”
As Spaceport America navigates setbacks, some local officials continue to question if this major economic development project can deliver significant financial prosperity to the area.
