Inside the Capitol

Friday, December 16, 2005

12-21 Such a Deal

Syndicated Columnist
SANTA FE -- New Mexico has an opportunity to be "the launch pad for the new space industry," as British entrepreneur Sir Richard Branson puts it.
Becoming the world's first commercial spaceport is exciting. We have an adventuresome governor and possibly the world's best businessman to lead us in this quest. We also have a huge state surplus that can provide us the stake to get into the game.
But it's not a done deal yet. New Mexicans still have to approve the gamble. Gov. Bill Richardson will ask the next three legislative sessions for a total of $100 million in severance tax bonds to build the spaceport. The state's transportation budget will kick in another $35 million.
Congress and local communities in southern New Mexico will be asked to come up with the other $90 million. The local government contribution would be in the form of a gross receipts tax.
There is sure to be lively discussion at all levels of government about whether this Buck Rogers venture is meant for us.
The odds on the gamble aren't a complete roll of the dice. Paul Allen and Burt Rutan, who sent SpaceShipOne 65 miles up to win the $10 million X Prize, will build SpaceShipTwo for Branson. It will accommodate seven or eight passengers, instead of the three of its predecessor.
Branson is known as a Midas, whose touch turns all his projects to gold. He parlayed a single record store in London into a global conglomerate of entertainment, communications, airline and railroad companies, all bearing the Virgin brand.
The guy is amazingly charismatic and would make a great salesman for New Mexico. But his new Fox-TV show "Rebel Billionaire" hasn't turned to gold yet, although it is doing well in Australia.
The first of SpaceShipTwo's launches are sure to make major headlines. Branson is scheduled to be on the first flight, along with actress Victoria Principal. But the first year or so of launches will be from the Mojave air strip in California, while New Mexico's spaceport is being completed.
By the time they reach New Mexico, will some of the newness have worn off? Maybe not all of it. Gov. Richardson says he plans to be on one of the first flights after the launches begin in New Mexico.
Assuming he wins the governor's race next year and doesn't go anywhere before his term is over, he'll still be governor in 2010 for that flight. New Mexico would then have the first governor to climb Mount Everest, followed by the first governor into outer space.
Safety will be of paramount importance on these flights. Over 50 test flights are planned before the SpaceShipTwo will be ready for passengers. Trouble with any of the flights would greatly diminish the value of New Mexico's investment.
But if all goes well, it appears the sky is not the limit. Branson says he already has 100 fully-paid reservations for $200,000 and nearly 40,000 deposits from 126 different countries. The 100 reservations equal $20 million and the nearly 40,000 deposits, at $20,000 apiece, fully refundable, appear to have put another $800 million in the bank.
So that brings up the question of why Branson can't foot the $225 million for a spaceport himself. Development of SpaceShipTwo will be expensive, but the prototype already has been developed and tested. SpaceShipOne reportedly cost $20 million to build.
If Branson built the spaceport himself, would he build it here? I'm guessing he would build it in California, from where the first flights will occur.
So we have to make some investment to get him here. We've been beating ourselves up for 20 years because we let Microsoft get away. Knowing what we do now, we'd have seen to it that Bill Gates and Paul Allen got the $35,000 loan they needed in 1978. But keeping Microsoft would have been much more complex than that.
Maybe Richardson and Branson have all the questions answered. And maybe they don't. In the coming weeks and months, we'll pose some of the questions that may help New Mexicans and their public officials make an informed decision.
WED, 12-21-05

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail)



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