ONLY ON NC9: Spaceport America economic impact study lacks supporting documents

LAS CRUCES, N.M. -

A NewsChannel 9 investigation reveals serious problems at Spaceport America. 

The $220 million, taxpayer-owned launch site for vehicles going into space is owned by New Mexico and managed by a team paid for with tax dollars.

On multiple occasions, Spaceport America officials claimed to have had a $20 million economic impact in FY2016. 

However, when asked for a copy of the economic impact study or documents supporting the claim, Spaceport America’s chief financial officer, Zach De Gregorio, told NewsChannel 9 he didn’t use any documents and sent NewsChannel 9 a PowerPoint presentation with five slides. 

“It’s just the PowerPoint,” said De Gregorio.

When asked how he did an economic impact study without any documents, De Gregorio said, “I had a lot of conversations and I talked with local business owners, customers and with city officials. I talked with my teammates and I got a really good sense of what was the activity in FY16.”

Meanwhile, in Las Cruces, Chris Erickson, an economist at New Mexico State University said he worries the lack of documentation will jeopardize the spaceport’s credibility with lawmakers.

Erickson said, “Of course presenting a slideshow is pretty typical but you’d expect documentation to backup that slideshow.”

Erickson also said, “This is a classic mistake people do when they're doing impact studies which is they only look at the positives and they don't take into account the cost."  

According to the PowerPoint presentation obtained by NewsChannel 9, the state invested about $944,000 into the spaceport in FY2016.

However, the slideshow doesn’t mention that taxpayers in Doña Ana County paid $6.2 million in FY2016 to pay back bonds used to build the spaceport.

It also doesn’t show that Spaceport America lost $1.9 million that same year.     

Still, Spaceport America officials are claiming to have a 20-fold return on the state's $944,000 investment.

Sen. George Muñoz, D-Gallup, called the spaceport a "boondoggle" and told NewsChannel 9 that it's a multi-million dollar bad investment.

Muñoz also said the lack of documentation puts lawmakers in a tough position.

He asked, “How do you tell a kid that needs lunch, sorry, we gave this money to the spaceport instead of meals for education?"

Additionally,
Muñoz criticized Spaceport America for failing to meet its objective which is to be a launching site for spaceships.

Erickson disagreed and said he thinks the spaceport has potential but is being mismanaged.

He said, “I think you can make the argument that the spaceport is a good investment for the state but the problem is when you use these funny analysis that's using trumped up numbers that just undercuts the credibility of the spaceport administration and spaceport management."   

When NewsChannel 9 requested copies of the spaceport's contracts through the state’s Inspection of Public Records Act, officials with Spaceport America tried charging reporters for the information which, legally, is free to inspect.

“Their response to you is really alarming,” said Peter St. Cyr, the executive director for the New Mexico Foundation for Open Government.

St. Cyr said, “
Taxpayers have invested hundreds of millions of dollars into this facility and the spaceport managers don't get to impose their own secrecy rules and block access to the documents that allow you and the public to scrutinize their day-to-day operations and their affiliations with these private companies.”

“They also have no right to block you from inspecting them and making your own copies with your own equipment,” St. Cyr added.

When asked why doesn’t Spaceport America follow the state’s Inspection of Public Records Act, CEO Dan Hicks told NewsChannel 9, “We have sought and obtained confirmation that the public may take digital photographs of public records produced for inspection. We will augment our policy to reflect this specific procedure.”

Hicks’ response did not address the issues encountered regarding Spaceport America failing to respond to certain IRPA requests.

When asked about exaggerating their economic impact, Hicks said, “The chart was intended to show the economic value of the activities at Spaceport America compared the funding received from the NM General Fund.  It was simply a comparison chart to convey value added.  An Economic Impact Study was not needed to provide a qualitative assessment of our value per NM general fund spending.  The focus of the discussion was for our CFO to explain the assumptions he used to compile the information in that impact chart.”









 


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