States Competing for SpaceX by Offering Financial Breaks

Space Exploration Technologies Corp. Chief Executive Officer Elon Musk founded the company in 2002 to build and launch rockets to serve the International Space Station and shuttle tourists into space.

In a glass-walled conference room at the California headquarters of Space Exploration Technologies Corp., Chief Executive Officer Elon Musk told Texas officials he was interested in building the worlds first commercial rocket launchpad in their state -- if the state could compete.

In the months after the 2011 meeting, state and local officials gave Musk, a billionaire, what he and his lobbyists sought: about $20 million of financial incentives, laws changed to close a public beach during launches and legal protection from noise complaints. SpaceX, as the company is known, hasnt said whether the Texas site, near Brownsville, the poorest metropolitan area in the nation, will be selected over locations in Florida, Georgia and Puerto Rico.

State and local governments often fall into bidding wars for jobs, offering tax breaks and sweeteners amounting to $70 billion annually, according to Kenneth Thomas, a political science professor at the University of Missouri in St. Louis.

Youve got to make sure youre providing what everybody else is providing for tax incentives and tax breaks, said John Baldacci, who was governor of Maine from 2003 to 2011 and regularly received requests for tax breaks.

Space Exploration Technologies Corp.'s unmanned Dragon capsule is seen in orbit, in... Read More

Space Exploration Technologies Corp.'s unmanned Dragon capsule is seen in orbit, in this undated handout photo. Close

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Space Exploration Technologies Corp.'s unmanned Dragon capsule is seen in orbit, in this undated handout photo.

Three years of discussions among Texas officials and SpaceX representatives culminated with the incentive offers, according to interviews. SpaceX hired lobbyists and flew a key lawmaker to its offices. Musk gave about $12,000 in campaign contributions.

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States Competing for SpaceX by Offering Financial Breaks