Spaceport is still at the mother breast

Spaceport America’s inception was 2005, making it 21, but it’s still a long way from adulthood. 

That statement is based on examining the FY 2024-2025 audit, available here: 

https://osaconnect.osa.nm.gov/auditReportSearchDetail.html?id=12d543f5-6d27-4b26-8fcb-20305a50ca45 

It’s only 56 pages long, despite spaceport spending over $21 million that year and having over $50 million in “current” capital projects. 

One reason for the brevity is that the government audit still considers the spaceport as in its developmental stage instead of a money-losing “business-like” government activity that is expected to be self-sufficient. If it were considered an adult and the business part were not in the black, the New Mexico Department of Finance would probably swoop in to learn if fraud, abuse and waste of public funds were occurring or urge the state to cut the money spigot off pronto. 

$17.9 million of its expenses are grouped under “spaceport development” and the $50 million in current capital projects is  reduced to a list with some repetitions and no financial breakdown making it fluffery–rare in audits. 

There is other fluffery–claims that spaceport created “at least” 240 private-industry jobs that year–just a one-liner with no source or elaboration given. It lists monthly figures averaging about 2,500 a month for “entrants to the horizontal launch area.” With no detail, I assume this includes tourists, construction workers, the six or so regular spaceport employees that run the 24/7 security, and occasional launchers and testers. 

The audit also vaunts 10 “tenants and customers,” making no distinction between them, which includes SpinLaunch, claiming they were active when they left in 2023, making this astonishing hyperbole in an audit. 

But the figures give us terra firma to stand on.

Closer examination of the audit shows $21.6 million was spent that year. 

Of that amount, $11.4 million was expended from the general fund, $3.77 million for Spaceport America government employees and $6.7 million on “contractual services” and $2.18 million on “other costs.” That’s a lot of private-company hiring for a government-owned entity and very vague accounting of public-funds expenditures. Are we jobbing-out administration of this government entity? 

The second component of the $21.6 million FY2025 expenditure is debt, which is $4.6 million a year through 2029. The bond was issued in 2009 and is paid off from 75 percent of the revenue from a .25 percent gross receipts tax collected by Dona Ana and Sierra counties. Both the counties’ GRT ordinances give no sunset for the tax. I hope the people make their county representatives put continuation of the tax to a vote in 2029. 

Some information on the GRT, which is kept in its own “major” fund called the Regional Spaceport District Fund. It looks like over $40 million is in that fund, but having attended the Regional Spaceport District Tax Board meetings in the past, this takes explanation. Dona Ana collects about $7 million or so a year and Sierra County about $500,000. Sierra County pays about $250,000 or so of the $4.6 million yearly debt and Dona Ana the balance based on a “pro rata” formula set up in 2009 that I couldn’t get anyone to reveal. There is always money left over after the $4.6 million is paid and the tax board was and may still be split on what to do with it. It looks like over $11 million is “kept in trust,” where it doesn’t say. Over $2.7 million is invested in a state fund, which from past meetings I know includes at least $1.5 million from Sierra County’s excess GRT. The remaining $26.5 million is considered “accounts receivable,” which I interpret, again based on past tax-board meeting attendance, as being in Dona Ana coffers. And why should Dona Ana not hang onto its own excess GRT? The spaceport may consider it accounts receivable and Dona Ana may not. So this is a pretty bold fattening up of the spaceport’s assets that may end up being fiction. 

The third component of the $21.6 million spent in FY2025 is $5.6 million on capital projects. No detail given. 

Now let’s look at revenue. The spaceport made $6.15 million in FY2025. Income from rent was about $3.9 million. Tours and launches generated $1.225 million, and “lease interest” about $970,000, whatever that is. 

That puts the spaceport about $15.45 million away from standing on its own two feet a year ago. And, sadly, the audit shows spaceport “programming revenue” was down $2.4 million from FY2024. 

The state put in $8.86 million from the general fund and the severance tax bonds fund and the counties paid $4.6 million from their GRT, and spaceport paid $6.15 million, totaling $19.6 of the $21.6 million spent a year ago. The two million remaining was paid from left over cash from the state general fund and severance tax bond fund given years prior. 

Let’s look closer at the income spaceport is making from rent, since the audit includes fluff about “tenants and customers.” $3.9 million in rent, but a little over $3 million of that is the yearly fee Virgin Galactic pays to occupy The Gateway to Space building. Only about $900,000 was collected in rent from all the many other tenants and customers, which means most of the companies listed are fly-by-nighters conducting tests, not tenants. 

Income from “tours and launch” are probably purposely bunched to obscure how little each is generating–only $1.2 million in FY2025. So the 2,500 monthly average of those going to the horizontal launch area, cited by the audit, is mostly construction workers, not tourists and launchers, who are building out the spaceport on the public’s dime.  

This moribund state of use and occupancy of this inland, rural spaceport was predictable. 

Technology was and is the major hurdle. Rocket-powered separating yet retrievable modules is still the goal for private space companies’ viability and for getting to space not just 55 miles or so up, which is what Virgin’s rocket delivered once so far. Separated rocket modules are still landing haphazardly and still require that flights take place over the ocean, not inland. During a February 2024 public meeting in which spaceport officials outlined its master plan, it was stated that inland rocket launch technology was about 20 years away. 

Virgins’ window for offering glamorous up-and-back flights 55 miles up, with about 10 minutes of weightlessness, has probably closed in the intervening 20 years. Or been surpassed by other space companies’ offerings. It’s unlikely Virgin will ever draw 200,000 tourists a year with all its attendant economic development, as predicted and touted by officials trying to sell the GRT tax. 

If Virgin’s plan succeeds, offering flights from and to choice spots such as Dubai, Paris, London, Cairo, etc., it is unlikely Truth or Consequences will book many flights, since it’s in the middle of nowhere. 

The rurality and lack of a large, educated workforce also means the trickle down from jobs will be limited. 

Which means the spaceport may be in its developmental childhood stage for a long, long time, with the public paying for it ad infinitum.