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SpaceX cancels Texas subsidy that required Boca Chica operation in 2018

Capitalism in space: SpaceX has canceled a small Texas subsidy that required it to begin operations at its Boca Chica spaceport by September 2018.

The company terminated a deal reached with the office of then-Gov. Rick Perry in late 2013 that earmarked $2.3 million from the Texas Enterprise Fund for the future spaceport at Boca Chica beach, which is near Brownsville. The project has experienced delays and SpaceX had received about $400,000 of the money, but it now has paid back all of it.

The deal mandated that, to receive the incentives dollars, the spaceport be operational by Sept. 30 this year and employ 180 people by the end of 2018. It appears SpaceX was unlikely to meet either target.

This does not mean that SpaceX is abandoning the spaceport, only that it can’t meet the schedule required by this subsidy. This also might explain why they requested an additional $5 million from Texas. They knew they were going to lose this $2.3 million subsidy and were lobbying to make up for it with other state funds.

Hat tip Robert Pratt of Pratt on Texas.

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3 comments

  • Dick Eagleson

    My understanding is that SpaceX requested the extra $5 million to cover more infrastructure – roads, I suspect, and maybe additional water supply – that will be needed to accommodate a planned expansion of the facility to include BFR-BFS production, maintenance and launch.

    Mr. Z is not guilty of contributing to it here, but I weary of all the brainless carping chatter from both Left and Right about SpaceX’s penny-ante so-called “subsidies” for Boca Chica. So long as it is normative for governments to provide roads and common for them to provide water service as well, SpaceX is being completely reasonable to request improvements to such infrastructure in order to adequately support its operations.

    The Left are particularly hypocritical to complain of “subsidy” in this case. These are the same folks who oppose any privatization of infrastructure such as roads and water systems. So one can support government monopoly roads and utility services, but cannot then legitimately also object to a private enterprise requesting improvements to such services when launching a “greenfield” project in a location that is underserved by such infrastructure.

    Unless, that is, the Left is willing to grant SpaceX the right to condemn property beyond its property lines and do the other needed work so long as it’s done entirely on SpaceX’s dime? Yeah, I didn’t think so.

    SpaceX was already planning to spend nearly $100 million building out facilities within its property lines and, thereafter, employing a lot of people. Expansion related to BFR-BFS might well double SpaceX’s previously planned Boca Chica investment, and its employment numbers, over the next few years.

    Then there’s all the recently announced new hotel projects on the southern part of South Padre Island looking to benefit from the frequent and year-round spectacle of upcoming SpaceX launches. This “trickle-down” investment and job creation is likely to be worth as much or more than that directly attributable to SpaceX.

    Right now, this area has only a single “jackpot” season of roughly two weeks every year when it is overrun with libidinous, drunken and scantily-clad undergrads on Spring Break. Regular launches from Boca Chica would provide a lot of additional “jackpots” every year even if each was just a day or two or three in length. Plus, the people likely to come for the launches will probably spend more, per capita, per day, than the Spring Breakers and be a lot less trouble for local law enforcement.

    The county that includes Brownsville and Boca Chica within its borders is, literally, the poorest in TX. Five years down the (publicly-funded “subsidized”) road, that mantle is going to pass to some less impecunious place. But all some people seem to have to say about that is “Subsidy!” Get a life.

  • ken anthony

    In summary… people are stupid.

    I do find it interesting that some activities make desolate places valuable. Economics continues to work where planning falls short.

  • Kirk

    I wonder how SpaceX’s plans are evolving, and if, at this point, they still expect to launch Falcon 9s from Boca Chica. Might they decide that their two functional pads out of Florida are sufficient to handle their East Coast launches?

    During the Falcon Heavy post-launch news conference, Mr. Musk spoke about starting BFR testing “maybe next year” saying “we’ll either do that at our South Texas launch site, near Brownsville, or do ship to ship. We’re not sure yet whether ship to ship or Brownsville, but most likely it’s going to happen at our Brownsville location, because we’ve got a lot of land with nobody around, and so if it blows up, it’s cool.”

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