News Column

SpaceX to Keep Headquarters in Hawthorne Through 2022

Oct. 31, 2012

Sandy Mazza

SpaceX

Hawthorne, Calif., will be able to hold onto its most prominent business for at least the next decade under a new deal with Space Exploration Technologies Corp.

SpaceX agreed to stay in its 1-million-square-foot headquarters building through 2022 as long as the city reduces certain taxes on the business as promised.

The deal includes a $260,000 cap on annual business license fees, which are calculated based on gross receipts -- meaning that the more revenue SpaceX makes, the more fees it would have to pay. This agreement will allow SpaceX to maintain a flat tax rate as it gets larger.

Additionally, if SpaceX chooses to expand its facilities in the city, fees for planning and building will be dramatically reduced by 75 percent of what is normally charged. City officials, aware that officials in Florida and Texas were trying to woo the emerging rocket company, enthusiastically backed the deal in a unanimous City Council vote last week.

"When they mention SpaceX in the future, they're also going to mention Hawthorne," Mayor Danny Juarez said. "We're very, very proud of that."

PayPal founder Elon Musk used his fortune to start SpaceX in 2002. The young company relocated from several offices in El Segundo and Los Angeles to one giant warehouse near Hawthorne Municipal Airport in 2008. It has expanded quickly, with this year being the most fruitful of all, thanks to a $440 million NASA contract to design and develop the near future of U.S. human spaceflight. The contract includes 12 cargo missions to the International Space Station. On Sunday, SpaceX's Dragon space capsule successfully completed the first of those missions, returning to Earth with 1,673 pounds of cargo after having delivered 882 pounds of supplies.The company has about 2,000 employees and is in the process of hiring hundreds more. Hawthorne officials expect to receive a total of about $600,000 annually in fees from the business once its current expansion is complete. The city currently receives about $475,000 a year from gross receipts, property taxes, commercial utility taxes and employee sales taxes.

"SpaceX is in a rapid growth mode," said Katherine Nelson, SpaceX's vice president of marketing and communications. "These incentives are just ensuring we're in a position to continue to grow. We are always looking for the best opportunities for our business and for our growth, so we're pleased we were able to come to an agreement with Hawthorne and we can keep our headquarters here."

In addition to reduced fees, the company's economic development agreement with Hawthorne includes a "corporate citizenship" clause that allows the city to use the SpaceX logo for its own branding, and encourages the company to engage with schools and community events.

Association with a company that is a leader in privatizing space travel is such a hot commodity that officials in Florida and Texas have offered millions of dollars in incentive packages to lure SpaceX to build its planned rocket-launching facility in their state. Councilwoman Olivia Valentine called the company an inspiration.

"They are going to bring to us not only a wonderful company, but they've made a real commitment to maintain their place of business in the city, and to provide an inspiration to our schoolchildren," Valentine said. "I think the city is going to benefit greatly from having them here, and I look forward to a long association with them."



Source: (c)2012 the Daily News (Los Angeles). Distributed by MCT Information Services.


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