Blue Origin passes over Houston Spaceport in favor of Alabama

The lobby of space venture Blue Origin features a replica of the Earth, Tuesday, March 8, 2016, in Kent, Wash. The private space company opened its doors to the media for the first time on Tuesday to give a glimpse of how organizations like Blue Origin are creating the next generation of rockets for private and public use. (AP Photo/Donna Blankinship) less The lobby of space venture Blue Origin features a replica of the Earth, Tuesday, March 8, 2016, in Kent, Wash. The private space company opened its doors to the media for the first time on Tuesday to give a ... more Photo: Donna Blankinship, STF Photo: Donna Blankinship, STF Image 1 of / 38 Caption Close Blue Origin passes over Houston Spaceport in favor of Alabama 1 / 38 Back to Gallery

Houston Spaceport lost out on a rocket engine manufacturing facility that could have brought a $200 million investment and 342 well-paying jobs. Blue Origin, the space company created by Amazon founder Jeff Bezos, instead chose Huntsville, Ala., which boasts an experienced work force and powerful political support.

The project had been seen as a way to jump-start development at the Houston Spaceport, which wants to create a cluster of aerospace companies but has just one tenant. Those involved in the effort remain optimistic that Houston will land its next project.

"We can't speak to what other entities had to offer, but we prepared and offered a competitive proposal," Houston Airport System spokesman Bill Begley said in a statement. " ... The process showed that the Houston Spaceport is a viable player in the growing commercial spaceport and aviation field."

But city councilman Dave Martin, whose district includes the Ellington Airport-based spaceport, complained that federal and state officials should have acted more vigorously.

"We didn't want it as bad as their political leaders wanted it," he said.

Martin praised work done by the Bay Area Houston Economic Partnership and the Houston Airport System and said the region's culture, restaurants, sports and museums appeal to recent college graduates who could work for Blue Origin.

"And we're losing out to Huntsville, Ala.? I'm scratching my head on that one," Martin said. "And it all comes down to, Senator Shelby is kicking our butt."

He referred to U.S. Sen. Richard Shelby, R-Ala., who sits on the Appropriations Committee and chairs its Commerce, Justice, Science and Related Agencies subcommittee. They have jurisdiction over NASA's annual budget and appropriations, and Shelby is a vocal and important ally of space companies.

Houston Spaceport was one of more than 20 pursuers for the Blue Origin project. As runner-up, it remained on the list of potential sites until just before the decision was announced in June. That experience could help the spaceport as it seeks other projects, said Bob Mitchell, president of the Bay Area Houston Economic Partnership.

"This is not something that's going to be a complete success overnight. It takes time," Mitchell said.

The Houston Spaceport is attempting to win three other projects, two of which are as large or larger than the Blue Origin project in terms of jobs and financial investment. One of the three is even more high tech than Blue Origin's plans to build rocket engines, he said.

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Mitchell and others cited a variety of factors that gave Huntsville the edge over Houston, despite its long ties to the space industry as home to NASA's Johnson Space Center. Northern Alabama has a cluster of aerospace companies focused on building rocket engines; thus, it has cultivated a high-tech aerospace manufacturing work force.

NASA's Marshall Space Flight Center in Huntsville designed, built and tested the Saturn V rocket that carried astronauts on the Apollo missions to the moon. It developed new rocket engines and tanks for the space shuttle fleet, and it's currently home to the development of NASA's Space Launch System rocket.

United Launch Alliance has a facility in nearby Decatur focused on the manufacture, assembly and integration of launch vehicles and Aerojet Rocketdyne has a Huntsville facility with engineering expertise in solid and liquid propulsion, according to their respective websites.

If Blue Origin had selected Houston, San Jacinto College was standing by to help develop a local work force, chancellor Brenda Hellyer said. She said the school would have adapted existing job-training programs for the petrochemical and aerospace industries. It would have designed classes around the welding, robotics, instrumentation and equipment testing positions that Blue Origin would have needed to fill.

"We were brought in to find out what their needs were and to figure out how we were going to be able to help," Hellyer said.

Blue Origin likely had another objective in mind, said Bill Ostrove, space market analyst for Forecast International. The space company, currently competing against Aerojet Rocketdyne to build an engine for United Launch Alliance's new Vulcan rocket, may have selected Huntsville so that United Launch Alliance wouldn't choose Aerojet Rocketdyne simply because they both have locations in northern Alabama.

Blue Origin's new facility in Huntsville would build the BE-4 engine being developed for United Launch Alliance, as well as Blue Origin's New Glenn reusable launch system.

"There was kind of a perfect storm," Ostrove said.

Blue Origin's new facility will be in Cummings Research Park, the nation's second-largest research park. Construction can begin once an engine production contract with United Launch Alliance is awarded, according to a June news release from Alabama Gov. Kay Ivey.

Blue Origin did not answer emailed questions concerning speculation that its facility may be built only if its engine is selected for the Vulcan rocket.

Ostrove added that Blue Origin is the favored supplier and will likely win the bid. United Launch Alliance and Blue Origin are jointly funding development of the BE-4 rocket engine by Blue Origin.

"If ULA decides to continue development of the Vulcan rocket, and it is powered by the BE-4 engine, Blue Origin has announced its intention to manufacture those engines in North Alabama," Shelby told the Chronicle in an email.

"I have long believed that the Russian-made RD-180 engine should be replaced with an American engine," Shelby said, "and I have been working with my colleagues in the Senate to find an alternative that will enable a smooth transition away from the Russian rocket engine while maintaining America's policy of assured access to space."

Blue Origin will employ up to 342 people in the new facility with an average salary of $75,000 and competitive benefits. It will make an approximately $200 million capital investment in the state, the news release said.

The state of Alabama offered a host of incentives, including a 3 percent jobs credit, 1.5 percent investment credit and 20-year property tax abatement, where the state approved years 11 to 20 with an estimated value of $647,745.

Ostrove said Houston may have better luck with a facility focused on human spaceflight, an area where Johnson Space Center has developed expertise, or other sectors where Houston already has a foothold.

A JSC spokesperson said the NASA center is "supportive, involved and highly values its place in the Houston community," but it would decline to comment on business decisions made in the private sector.

Despite the setback, Begley said the Airport System's commitment to the spaceport is "as strong as ever."

The Houston Spaceport recently announced that it started searching for a design-build firm to develop roads and utilities. It is also building a new air traffic control tower at Ellington Airport that will have a mission-control area.

"Blue Origin is a high-profile company and it would have been absolutely fantastic if we managed to attract them to Houston," said David Alexander, director of the Rice Space Institute at Rice University. "But the spaceport plans are going ahead."

Alexander said technology for horizontally launched spacecraft, the only kind permitted from Houston, isn't yet developed enough to warrant a spaceport terminal. So it's smart to first develop an aerospace community that could position the spaceport to take advantage of both the growth in commercial space ventures and ultimately horizontal-launching technology once it becomes available.

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Alexander also emphasized local expertise from Johnson Space Center, access to colleges and universities, connections to other industries, and an international transportation system provided by the Port of Houston as well as Bush Intercontinental and Hobby airports.

The fact that the Houston Spaceport was runner-up for the Blue Origin facility shows how far it has come since it was licensed two years ago, Alexander said. It also illustrates the economic benefits the spaceport could one day provide.

"Things don't just fall off of trees," he said. "You have to work for them. And that's what they're doing. I think in the long run it will really pay off."

Mitchell, with the Bay Area Houston Economic Partnership, also remained upbeat, particularly about the future for supersonic air travel, where having a spaceport in a large city presents many advantages.

Martin said he hopes to see new space technology at the facility in 20 years or so.

"It doesn't change our direction," the councilman said. "We just need to fight a little bit harder."