New Mexico Spaceport Leaves Economic Dreams Grounded

From his tiny gem store in southern New Mexico, Robert Hanseck spends his days untangling chakra beads and answering questions about the healing properties of amethyst crystals. After four decades behind the register, he has met thousands of wellness-minded tourists eager to explore the hot springs that span the region.

But he almost never sees the type of traveler he was promised would transform his small town of Truth or Consequences: space enthusiasts.

“It’s been a flop,” he said of Spaceport America, a project that was conceived as the vanguard of commercial space travel — and that has been promoted by state officials for more than two decades as a launchpad for the local economy.

Less than a mile up the road, Arthur Burger, who owns an art gallery, recounted the moment in 2021, not long after he moved to town, when he watched in awe as a rocket plane soared into the sky beyond the nearby mountain range. He remembers the resounding boom.

After years of delays, Virgin Galactic, the anchor tenant at Spaceport America, had sent its founder, Richard Branson, and a team to the edge of space — evidence at last, many in the area thought, that New Mexico was a front-runner in the commercial space race.

“That week, people came in from London, from Taipei,” Mr. Burger said. “It was surreal.”

In this stretch of rural New Mexico, there are plenty of opinions about Spaceport, a futuristic structure on a desolate stretch of desert that has cost more than $200 million in state and local funds.

Residents of Sierra County, which includes Truth or Consequences, and neighboring Doña Ana County have contributed millions from sales taxes to help subsidize the venture.

Many say they are tired of waiting for the payoff that was supposed to come from aerospace-related jobs and from tourists drawn like storm chasers to the scene of the action. But others see it as an ambitious bet on the future that has finally begun to produce results.

This year, Virgin Galactic has conducted six Spaceport launches, the most in any year so far, blasting researchers and space tourists who can afford the $450,000 ticket toward the edge of space.

Virgin Galactic uses a carrier aircraft to take a rocket plane about 45,000 feet above Earth, and from there it disconnects and propels passengers to an altitude of more than 50 miles.

Despite the recent momentum, another setback came in November when Virgin Galactic laid off 185 employees — 73 in New Mexico — reducing the company to around 800, and said it would suspend flights in mid-2024. The layoffs, according to the company, are meant to allow Virgin Galactic to focus resources on a new class of suborbital space planes. And this month, Mr. Branson told The Financial Times that he would no longer invest in Virgin Galactic, noting that the company “does not have the deepest pockets.”

For Amanda Forrister, the mayor of Truth or Consequences, the idea that Spaceport will one day reshape her community still feels possible, but far from a guarantee.

“It is a bit of a question mark,” she said.

Getting In on the Ground Floor

The allure of rockets, space and what exists beyond us has deep roots in New Mexico.

After a military balloon crashed near Roswell in 1947, that southeastern New Mexico town became part of the zeitgeist, driving decades of conspiracy theories from people who believe it was the crash site of an unidentified flying object used by aliens. The world’s first atomic bomb, developed at Los Alamos National Laboratory in the northern part of the state, was detonated at what is now the White Sands Missile Range, where the U.S. military still tests rockets.

So in late 2005, when Gov. Bill Richardson announced a plan to collaborate with Virgin Galactic on a commercial spaceport in the state, it sounded to many like a natural fit — and a potential boon.

“This is a unique opportunity for New Mexico to be on the ground floor of a new industry that will bring new companies, more high-wage jobs and opportunities that will move our state’s economy forward,” Mr. Richardson, who died in September, said when signing enabling legislation three months later.

The reality of commercial space travel felt firmly within reach, and almost immediately Mr. Branson’s company began taking spaceflight reservations at $200,000 apiece.

In 2006, construction began about 30 miles east of Truth or Consequences and ultimately used $218.5 million in public funds. From a distance, the circular structure, on 18,000 acres of sagebrush and yucca, looks almost like something from a sci-fi film. Cattle guards line the two-lane road that leads to its entrance. More than half the money to build it was allocated by the state, and the rest — $76.4 million — was generated from taxes in the local counties.

Voters in Doña Ana County approved a 0.25 percent gross receipts tax to support Spaceport in 2007, and Sierra County voters followed a year later. A state report released in 2005 estimated that by 2020, Spaceport could result in $550 million of additional annual economic activity and bring roughly 4,300 jobs to the area.

“The economic impact of this new spaceport is potentially quite large, reflecting the strong upscale potential of the nascent space tourism industry,” the report said.

The report also forecast 376 suborbital launches in 2019.

In reality, it has created only a small fraction of that — $138 million in economic output in 2022 and about 800 jobs generated, according to a recent report from Spaceport. The first human spaceflight was in May 2021.

“Looking at the numbers and what has taken place over the years, it’s been a bad investment,” said Shannon Reynolds, a Doña Ana County commissioner.

Mr. Reynolds said Mr. Branson’s recent comments were dismaying.

“If he will not invest in his own operation at Virgin Galactic, what are others supposed to deduce from this?” he asked. “I believe we bet on the wrong anchor tenant at the Spaceport.”

‘This Has Been a Long Road’

In recent years, Spaceport and Mr. Branson found themselves up against an increasingly crowded field of billionaire competitors.

Nine days after Mr. Branson’s 2021 suborbital spaceflight — the one Mr. Burger watched from his art gallery — Jeff Bezos took a similar voyage with his aerospace company, Blue Origin, which launched from rural West Texas. Elon Musk’s SpaceX, which was briefly a tenant at Spaceport, now has launch sites in Florida, Texas and California.

For many local residents, their deep frustration has been caused not only by the delays but also by concerns about the use of public funds.

In 2020, Dan Hicks, the executive director of Spaceport America, was fired after a whistle-blower came forward with allegations of financial mismanagement and abuse of authority.

The state hired a firm to investigate, and the state auditor said it had found “a severe breakdown of internal controls that resulted in possible waste and abuse of taxpayer funds.”

In an interview, Scott McLaughlin, who succeeded Mr. Hicks as Spaceport’s executive director, said the recently released economic impact report by his team pointed to encouraging signs on the horizon.

“This has been a long road requiring patience by the citizens and policymakers,” Mr. McLaughlin said. He noted that aside from Virgin Galactic, another key tenant is SpinLaunch, a company building technology aimed at providing rapid, low-cost access to space. The company had its first test flight in 2021.

“A main priority of mine,” Mr. McLaughlin said, “is to find new tenants.”

He said a large part of his job involved talking to companies almost weekly about Spaceport and giving tours to prospective tenants a couple of times a month.

“Many of the companies we are talking to, though, are very early stage in their technology development, so our recruitment might go over two or more years,” Mr. McLaughlin said. “With young companies, it is hard to know who will eventually succeed or fail.”

Before dawn on a recent morning — days before Virgin Galactic announced its plan to halt launches in the middle of next year — more than a dozen STEM educators and students arrived at Spaceport America for what would be Virgin Galactic’s sixth and final launch of the year.

The air was frigid, and the group huddled on a concrete slab a short distance from the runway. At 9 a.m., the Virgin Galactic aircraft, known as V.M.S. Eve, lifted off, carrying two researchers and a space tourist who had paid $450,000.

The aircraft circled high above in the sky before the rocket plane, known as V.S.S. Unity, separated and hurled the crew toward the edge of space for several minutes, reaching nearly three times the speed of sound. From liftoff to touchdown back at Spaceport, the mission lasted about an hour. It then takes Virgin officials weeks to prepare Unity for another launch.

“It’s quite something to see,” Mr. McLaughlin said in a parking lot where about a dozen onlookers had traveled to watch the flight.

“Sometimes this lot is full,” he said. “Sometimes it is not.”

Earthbound Attractions

While Spaceport America’s launch site address is given as Truth or Consequences, the heart of the town of 6,000 people is a 40-minute drive away on the Rio Grande.

The town, once called Hot Springs, got its name in 1950 after the host of the game show “Truth or Consequences” pledged to air the program on its 10th anniversary from the first place to rename itself after the show.

This time of year, as winter transplants arrive to escape the cold, cars with license plates from Minnesota and Montana line the main road. On a recent afternoon, hours after the launch, the Spaceport America visitor center in town, inside an old adobe-style building, was empty.

Kathleen Sloan, a local journalist and longtime resident, said she was tired of promises about Spaceport and found the whole situation to be a bit of a farce since Virgin Galactic aircraft could theoretically take off from some airports.

Local residents, she said, “have paid enough.”

And yet the town’s growth is undeniable.

In a little over a year, PreReal Investments, based in New York City, has bought more than 100 properties in Sierra County at a cost of roughly $40 million. The company plans to resell the mixture of homes and commercial spaces.

But while the company promotes the property’s proximity to Spaceport America, “our choice was driven by the county’s natural resources,” said James Prendamano, PreReal’s chief executive.

The “hot springs, a wide array of world-class outdoor activities” were critical to his investments, he said.

That type of investment is reassuring, said Marianne Blaue, who moved to town with her husband, John Masterson, in 2016 after they left tech jobs in Seattle.

Eager to help build a sense of community in their new home, they soon opened Truth or Consequences Brewing Company, the first brewery in town, and have noticed a steady stream of fellow transplants arriving, especially since the pandemic began.

While Ms. Blaue knew a bit about Spaceport before moving, she hadn’t realized just how close it was to her new home. They’ve had Spaceport and Virgin employees and a handful of customers on space missions stop in for a beer, said Ms. Blaue, whose selection includes space-named brews such as Star Eater Black I.P.A. and Cosmic Blonde.

“There will always be an interest in space,” she said, “and I think that is beneficial for the community.”

On the afternoon of the recent launch, Mr. Hanseck, who owns the gem store, watched as cars trickled past his shop. This time of year, he said, most of his clients are snowbirds in town for the winter.

While Mr. Hanseck unpacked cardboard boxes of merchandise, he considered the longstanding promise of space tourists descending on his community. He chuckled to himself.

“I know what people come here for, and it’s not to go to space,” he said. “It is wishful thinking at best.”

On the same afternoon, Mr. Burger was at his gallery, working with a local artist to put up a new painting.

He has enjoyed escaping the saturated art scene of Santa Fe, he said. These days, he spends much of his time showcasing the work of Sierra County artists, including high school students.

“Did you hear the boom?” he said with excitement to a patron who lives in town, referring to the sound when the V.S.S. Unity re-entered the atmosphere. “There are few places in the world where you can see and hear something like that.”