Space X to stay in Hawthorne through 2022

spacex6.jpg Sounds like the Elon Musk space transportation company is receiving a nice deal from the city. As part of the agreement, reported by the Breeze, Hawthorne has agreed on a $260,000 cap on annual license fees, which are based on gross receipts. So as the company gets larger, as is likely, its tax bill won't skyrocket. The city currently receives about $475,000 a year from gross receipts, property taxes, commercial utility taxes and employee sales taxes.

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."

As I report in the November issue of Los Angeles magazine (piece is not yet online), Space X has been leasing any and all available property close to its headquarters, right next to Hawthorne Municipal Airport and formerly the building where Northrop made fuselages for the Boeing 747. At last check, nearly 1 million square feet was spoken for. The workforce stands at roughly 1,800, up from around 200 in 2005, and that number is certain to increase.

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.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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