Elon Musk’s Texas Empire Expands to Include Austin Gigafactory, Starbase – Bloomberg

Spanning 8 million square feet, Tesla's Giga Texas factory in Austin is 23% larger than the Pentagon building. Videographer: Mark Felix/Bloomberg

From a sprawling factory outsideAustin to a property-buying binge on the Gulf Coast, Musk is making an imprint in a state that has long welcomedeccentric outsiders.

By Dana Hull and Sergio Chapa

November 5, 2021, 4:35 PM UTC

On the outskirts of Austin, Texas, near the banks of the Colorado River, Tesla Inc.s new auto plant is close to completion. The massive factory, known as Giga Texas, spans 8 million square feet and sits on a roughly 1,700-acre plot.

Some 350 miles away, where the Rio Grande empties into the Gulf of Mexico, SpaceX is building Starship, a rocket designed to take people to the Moon and Mars. SpaceX and its real-estate arm have bought up more than 250 nearby properties, from vacant lots and a gun range to small bungalows owned by snowbirds and retirees. Some employeesincluding Musk himselfhave been living in the houses.

Homes with Tesla Solar Roofs on Weems Street in Boca Chica Village. Photographer: Veronica G. Cardenas/Bloomberg

These colossal projects are flagships in Elon Musks growing Texas empire, which will soon include Teslas new Austin headquarters. The electric-vehicle maker is slated to leave its home base in Palo Alto, California.

Silicon Valley may be the epicenter of startup culture and venture capital. But Texas has business-friendly lawmakers, cheap and abundant land and natural resources crucial to manufacturing-heavy businesses, all of which are critical for Tesla and SpaceX. Texas also does not collect a state income tax or a capital-gains tax on individuals. Musk, the richest man in the world with a net worth of more than $340 billion, relocated his Musk Foundation from California to Texas last December.

Texas Governor Greg Abbott promoted the Gigafactory location last year with this photo of him alongside Musk. Source: Greg Abbott on Facebook

The center of the free-market economy is in Texas, said Glenn Hamer, the CEO of the Texas Association of Business. Hamer moved to Austin just nine months ago, after leading the Arizona Chamber of Commerce for 14 years. Musk is talking about launching rockets to Mars, and theres not a lot of pushback for that type of activity here. Its a clich, but in Texas there really is a sense that the skys the limit.

A self-proclaimed barbecue fan who has taken to wearing a black bandanna around his neck, South African-born Musk is just the type of swashbuckling, eccentric newcomer that Texas has long embraced. He said in December that he relocated to the state full time from Los Angeles. But he hasnt been universally welcomed, drawing criticism from some residents and environmentalists.

SpaceX rocket engines and thrusters, including the new methane-fueled Raptor engines, are tested at the 4,300-acre facility in McGregor, Texas. Photographer: Mark Felix/Bloomberg

Musk has had a toehold in Texas for almost two decades. In 2003, SpaceX bought land in McGregor, Texas, because it needed vast space to regularly test rocket engines.

These days, the path to Mars goes through McGregor: all rocket engines and thrusters, including the new methane-fueled Raptor engines, are tested there. Nearly 600 people work at the now 4,300-acre McGregor facility, which is located around 100 miles southwest of Dallas, and a Raptor production plant will add another 400 to the local workforce.

Musks companies span multiple industries that have deep or growing roots in the state. The auto sector increasingly sees Texas as the Detroit of the South, while NASAs Johnson Space Center in Houston was founded six decades ago.

Musk is not building his presence quietly. He wants to rebrand the community surrounding SpaceXs Boca Chica launch site Starbase; signs bearing the name are already visible on company-owned property. Tesla recently opened a splashy 30,000-square-foot showroom and service center in Austin, adding to its presence in the state capital. Ad Astrathe private school that Musk foundedis now registered in Texas, and the billionaire has joked about making a foray into higher education with a science and technology institute, perhaps signaling budding interest in the idea.

Tesla's new 30,000-square-foot showroom and service center in Austin is the company's third in the state capital. Photographer: Mark Felix/Bloomberg

All of his businessesincluding the Boring Company, his underground tunneling venture, and Neuralink, the machine-brain interface companyare hiring in Texas. SpaceX is seeking a Spaceport Mixologist to handcraft cocktails. Neuralink needs an animal care specialist and a licensed veterinary technician. Teslas new factory, which will make the Model Y and the forthcoming Cybertruck, needs scores of production associates and engineers. Musk has said Tesla will hire about 10,000 workers for Giga Texas through 2022.

Musks companies have become a beacon of the local economy. The nose of a SpaceX rocket will be displayed at the new terminal of the Brownsville South Padre Island International Airport, welcoming tourists to the southern tip of the Texas Space Coast. Musk has no shortage of detractors in the border town, but others have made him a mascot. One downtown Brownsville business has been painted with a mural featuring Musks image and the words Boca Chica to Mars.

Murals, business advertisements, and graffiti around Brownsville show an embrace of Elon Musk and SpaceX by segments of the community. Photographer: Mark Felix/Bloomberg (2); Sergio Chapa (2)

Republican-led Texas, now home to nearly 30 million people, is gaining two additional Congressional seats as a result of the latest census, more than any other state. Its growing political clout can be seen in everything from new laws banning abortion and restricting voting rights to the states decision to sue the Biden administration over a vaccine mandate. The red-hot politics havent stopped the flood of transplants from Los Angeles, Silicon Valley, Florida and elsewhere.

It is not a coincidence that Musk has gravitated to the epicenter of the American energy economy. Manufacturing cars and trucks requires a lot of electricity and natural gas, and launching rockets depends on a steady supply of fuel. Tesla has a solar division and sells batteries to homeowners and leading utilities, while SpaceX is getting into the natural gas game.

A Tesla subsidiary registered as Gambit Energy Storage LLC has built a 100-megawatt battery energy storage project in Angleton, Texas, a town roughly 40 miles south of Houston. Utility-scale batteries are needed to store the electricity produced by wind and solar, but they can also become lucrative opportunities. By storing excess electricity when prices and demand are low, battery owners can sell it back to the grid when prices are high.

A Tesla subsidiary registered as Gambit Energy Storage LLC has quietly been constructing a more than 100 megawatt energy storage project roughly 40 miles south of Houston. Photographer: Mark Felix/Bloomberg

Meanwhile, liquified natural gas, or LNG, is of strategic importance for Musk because it is an affordable rocket fuel. Delivery trucks belonging to Houston-based LNG company Stabilis Solutions have been seen at Starbase. SpaceX plans to build a gas-treatment plant, a power plant, a small-scale LNG plant and related storage tanks in Boca Chica, a draft environmental assessment from the Federal Aviation Administration shows. Musk is a big fan of vertical integration, and SpaceX formed its own drilling company, Lone Star Mineral Development LLC, in August 2020. The company has yet to drill any wells or produce any natural gas.

Musks dizzying array of activities in the Lone Star State are not without controversy. Austin is already being convulsed by gentrification, and Teslas new factory, on the citys East Side, will likely exacerbate the housing crunch. SpaceXs expansion plans require FAA approval but are already making neighbors uneasy. Property taxes are going up, and public beaches are regularly closed for SpaceX launches.

Environmentalists and scientists have also sounded alarms about the potential impact of SpaceXs activities. Biologists are fearful that rocket debris is damaging fragile ecosystems and disturbing nesting for the threatened piping plover, a small species of shorebird. In a public comment filed with the U.S. Army Corps of Engineers, one biologist suggested that rocket launches could deafen birds, making them easier targets for predators.

In Brownsville, public beaches are regularly closed for SpaceX launches. Photographer: Mark Felix/Bloomberg

Environmentalists have sounded the alarms about the potential impact of SpaceXs activities on delicate animal ecosystems. Photographer: Mark Felix/Bloomberg

A coalition of 11 environmental groups signed a Nov. 1 public letter asking the FAA to scrutinize SpaceXs proposed expansion in the area. The groups warn that the SpaceX launch site is adjacent to an ecologically unique region that includes a national wildlife refuge, tidal flats for several bird species and beaches that are used by nesting sea turtles. Sea turtles and hatchlings present near the site at the time of engine ignition could be injured or killed by the rocket heat plume, reads the letter.

The relocation of Teslas headquarters to Texas is not unexpected: Musk expressed enormous frustration with California public-health officials during the early days of the coronavirus pandemic, blasting shutdown orders as fascist on a Tesla earnings call.

Musk wants to rebrand the community surrounding SpaceXs Boca Chica launch site Starbase, and signs are already visible on company-owned property. Photographer: Mark Felix/Bloomberg

But the decision hints that Musk is just getting started. Ray Perryman, an economist in Waco, Texas, notes that Musks impact goes well beyond his companys own employees. Manufacturing operationswhether for cars or rocketsoften draw suppliers to the region and, in turn, more people. Perryman expects the creation of about 50,000 jobsand more than $3.6 billion in annual gross state product.

Texas has had its share of characters over the years, and many have been larger-than-life, wealthy risk-takers who came from elsewhere, said Perryman. Theres still a wildcatting mentality here, and theres still a mystique about Texas that Elon Musk fits well.

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Elon Musk's Texas Empire Expands to Include Austin Gigafactory, Starbase - Bloomberg