Efforts by the Harlingen Economic Development Corp. for a SpaceX incentive package got a boost Thursday when Cameron County commissioners extended an invitation for the group to get involved. The request was mostly a formality, explained Harlingen EDC Director Raudel Garza, but state laws require such an agreement before the group can offer incentives to a company locating outside of Harlingen. The county’s agreement allows Garza to add to the incentive package an extra $450,000 over three years, though there are caveats with that agreement.
Garza said SpaceX approached the Harlingen EDC months ago about contributing, leading to rounds of negotiations and ultimately a plan that would grant SpaceX $450,000 over three years while bringing jobs to Harlingen. “We’ve been working on trying to help beef up the incentive package that Brownsville and the county are offering to SpaceX by contributing a portion of that package,” Garza said. SpaceX receives the $150,000 per year as proposed only if it makes 100 new hires in the area, with 10 percent of those hires residing in the Harlingen city limits, Garza said, characterizing the proposal as a “job creation incentive grant.”
Bringing a launch pad to Cameron County is especially lucrative for Harlingen, Garza said, because the city already has connections to aerospace technologies through United Launch Alliance, which has 200 employees who assemble rockets.
Garza thinks the presence of United Launch will be a boon to Harlingen residents seeking employment with SpaceX in the future. “There’s a group of people here that have those skills already,” he said, explaining that workers there are familiar with metal cutting, welding and riveting.
Garza said having another rocket science company in the county would mean even more innovation and training for Rio Grande Valley residents. “It’s going to elevate the skills of our workforce,” he said. “That’s probably a good thing for SpaceX, too, since they don’t have to import all those employees.” And while the Harlingen EDC pitch to SpaceX requires direct employment in Harlingen, Garza said getting involved with the incentives package is about building up the entire region.
“We’re not looking at it just to benefit Harlingen, but the entire area,” he said.
County Judge Carlos H. Cascos said the cooperation between cities across the Valley and their economic development entities showed that even those not directly impacted by the launch pad construction were understanding the regional importance of the SpaceX project from an economic and educational perspective. “I’ve long maintained that if something comes into Cameron, it’s going to benefit Willacy and Hidalgo counties,” he said. “We’re all tied together, and we can work as a region. We’re doing it with SpaceX.”
Cascos said the county is continuing to iron out its agreements with SpaceX, which include one to reduce or make exempt the company’s county taxes.
At most, the county can offer a 10-year, 100 percent abatement, Cascos said, adding that the tax abatement discussions are nearly complete. “After that, we’ll be able to tax the improvements at our regular tax rates,” he said. “It’s an investment in the future. We will more than make up the money that we’re abating.” The tax abatement agreement could be approved as soon as the county’s next meeting, he said.
A separate agreement concerning essentially everything else is a bit more complicated, though, he explained. “We also have a lot of policy issues that we have to agree on,” he said offering up security and reimbursements as examples of items included in the agreement.
With estimates that the lifetime of this project could be 30 to 40 years or more, he said county officials want to ensure that everything is in place concerning the county’s relationship with SpaceX for the sake of future commissioners.
“We want to make sure we have a good agreement that doesn’t put them into a fiscal bind,” he said.