The dream of commercial space flight in New Mexico could come to a halt.
Virgin Galactic is threatening to reevaluate its lease agreement with Spaceport America near Upham, N.M., if the state does not protect its suppliers.
Virgin has already sold at least 500 tickets for commercial flights to space, but the company says it could take its business elsewhere if the state does not pass a liability exemption law for parts suppliers.
"I think it would be a big loss for New Mexico in many ways," Sen. Mary Kay Papen (D-NM) told ABC-7. "I am hoping in this next upcoming session we'll be able to pass informed consent for the passengers that would be flying."
An unsigned, undated copy of the lease agreement provided by the state calls for Virgin Galactic to be penalized $2 million if it breaks its lease with New Mexico and then begins flying elsewhere within two years. State officials said Wednesday the company won't post that deposit until it activates the lease. That would bring the state just a small fraction of the moran than $200 million it has invested in the facility.
"We gave the liability limitations to Virgin Galactic originally. It was a mistake not giving it to their subcontractors, so we should do it now," Sen. Lee Cotter (R-NM) said.
For the past two years, the state legislature has refused to pass the exemption.
Virgin Galactic President and CEO George Whitesides denied reports the company will leave the state if the law isn't passed, but he didn't rule it out.
He said the company will work with lawmakers and reevaluate the deal.
Spaceports are popping up all across the country from Texas to Virgina, down to Florida.
Virgin Galactic has already entered a deal to develop another spaceport in the emirate of Abu Dhabi.
State senators told ABC-7 they're hopeful an agreement will be reached.
"I think they are working on a compromise as we speak," Papen said. "We've already invested $209 million in the property. It's a fabulous property and built pretty much to their specifications and to others that would also be able to use the same facility, so I'm hoping that not only will they stay, but they will be attracting others as well."
"It's hard to tell. It's been several years in the legislature. We'll hope they'll actually let us get a vote on it this year," Cotter said.
Both senators said this is a top priority for the upcoming session next month.
Spaceport America Executive Director Christine Anderson acknowledged Virgin Galactic could walk away from the project, but she remains hopeful the company will keep its commitment.
"They really could, if they are not committed. I would hope that they are and I think that they are," Spaceport America Executive Director Christine Anderson said.
Asked if she thought the state failed to properly protect itself in the deal, she said, the agreement negotiated under former Gov. Bill Richardson and approved by lawmakers in 2005 was for the state to build the spaceport and Virgin Galactic to develop the spacecraft.
"It's easy to second guess what was in people's minds," she said. "I'm sure everybody was excited to have Virgin Galactic as an anchor tenant."
Paul Gessing, president of the conservative Rio Grande Foundation, said the lack of protections for the state was not surprising, "given the Richardson administration's record of throwing money at 'development' of these big vision projects" like the spaceport and a $400 million commuter train.
Richardson's spokeswoman did not respond to an email seeking comment.
Other states, including Texas and Florida, are also developing spaceports and aggressively courting commercial space businesses with incentives. Most of them are revamping old airports or other facilities. New Mexico's is unique because it is the first to be developed from scratch.
With an elegant and futuristic design, the spaceport is intended to become an attraction unto itself.
Building the spaceport with taxpayer money could be likened to governments spending taxpayer dollars on stadiums or arenas for sports teams, Gessing said, noting that building a stadium "is not completely speculative with an industry in mind that may never materialize."
"What is truly unique about this project is that it was completely, 100 percent speculative," he said.