Elon Musk shared new details about SpaceX's planned Mars-capable crewed launch system, called Starship, on September 28.

SpaceX is developing and launching Starship prototypes next to Boca Chica Village, a small neighborhood of retirement-age residents in South Texas.

Citing concerns about safety and disruptions, the rocket company recently offered to buy out everyone's homes in the area. But most residents initially balked at the deal.

While he was in town for his highly anticipated talk, Musk, the founder and CEO of SpaceX, met privately with some of the residents.

Villagers who attended the meeting described it as "awkward," "tense," and "heated," but ultimately productive in that they felt Musk — and SpaceX — listened to their complaints.

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Hours after fans cheered him onstage in South Texas, Elon Musk walked into a morass: a private meeting with perturbed locals whose properties SpaceX, the rocket company Musk founded, had recently offered to buy out.

Residents said Musk attentively listened to their concerns and squashed some of their fears about the buyout process. But they described their roughly half-hour encounter with the tech mogul as "awkward," "tense," "heated," "confused," and "exhausting" — though it ended with handshakes, selfies, and some sense of progress.

Musk heard out his tough audience just before midnight on September 28 during a visit to Boca Chica. The remote strip of land is at the southeastern tip of the state, and it's where SpaceX is building a private launch site and spaceport.

But it's also where about 20 retirement-age residents live in the formerly sleepy residential neighborhood of Boca Chica Village, some of them for decades.

"We weren't playing nice with him. We made it clear we were not happy," Cheryl Stevens, a resident who attended the meeting, told Business Insider.

Why Musk met with villagers in southeastern Texas

A prototype of SpaceX's Starship, called Mk 1, in Boca Chica, Texas, on September 28. Loren Elliott/Getty Images

Musk's main task for the trip was delivering a highly anticipated update on SpaceX's plans for a next-generation rocket system called Starship.

If realized, an operational 39-story launch vehicle may one day fly people to the moon and help colonists move to Mars, perhaps for the price of a modest home.

"The critical breakthrough that's needed for us to become a space-faring civilization is to make space travel like air travel," Musk said during his presentation while standing before a 16-story steel prototype.

Critical to making such a breakthrough, though, is room to safely build, test, and launch such Starship prototypes — vehicles that Musk said last year might explode (though this is a risky reality of any rocket-test program). SpaceX has mostly used Boca Chica for this work, and Musk's presentation, which featured a new Starship launch visualization showing off big plans for the coastal site, underscored the company's hopes for its nascent spaceport.

"I think it's definitely possible that the first crewed mission on Starship could leave from Boca," Musk said.

However, SpaceX has set up its rocket skunkworks close to residents' homes. The company built its launchpad just 1 1/2 miles from properties on the eastern edge of the community — twice as close as NASA permitted spectators to get to its space shuttles in Florida.

An overview of the Boca Chica area in South Texas in 2017. Google Earth

Facing increasingly vocal complaints from residents about excessive security, road closures, a large brush fire started by a prototype launch in July, notices that warned of rocket malfunctions, and other disruptions — plus a mandate from the Federal Aviation Administration (FAA) to boost its liability insurance coverage by 33 times — SpaceX in mid-September mailed every homeowner a "not negotiable" buyout offer.

"It has become clear that expansion of spaceflight activities as well as compliance with Federal Aviation Administration and other public safety regulations will make it increasingly more challenging to minimize disruption to residents of the Village," the company's cover letter said.

SpaceX's Starship prototype behind a home in Boca Chica Village, Texas. Loren Elliott/Getty Images But SpaceX's seemingly generous pitch — three times the appraised value for each home — alarmed many, if not most, residents.

Some told Business Insider they planned to permanently retire in the area and weren't interested in moving.

Nearly everyone had concerns about the offer's base appraisals, claiming they were abnormally low, and thus, even a threefold offer wouldn't come close to paying for a comparable coastal home in South Texas. (Some residents described the appraisals as "lowball" and "drive-by," since they did not evaluate the interior of homes.)

Residents also told Business Insider that property comparisons, which were used to inform value, relied on properties that SpaceX purchased under duress, as well as suburban homes in Brownsville, Texas, that didn't compare to their bucolic coastal setting.

Some who wanted to stay said they feared an eminent-domain process led by Cameron County, in which Boca Chica lies, may eventually force them out to make way for SpaceX's out-of-this-world ambitions.

With tensions peaking, and Musk in town, SpaceX decided to put their CEO and a cadre of residents into a room to work things out.

SpaceX stopped one resident from trying to record the meeting. But according to interviews with five people who were in the room, here's what happened.

Residents said at first they 'felt like we'd been set up'

Elon Musk unveiled the 164-foot-tall Starship Mark 1 prototype in Boca Chica on September 28. SpaceX/YouTube

Days before Musk's Starship presentation, SpaceX invited village residents to come. Around 10 people RSVP'd, and SpaceX picked them up with a shuttle. Helping corral and greet everyone was a senior legal counsel for the company from Washington, DC, as well as a government and business-affairs liaison who worked on-site in Boca Chica.

The last shuttle drove into SpaceX's work-yard compound shortly before 8 p.m., where workers had finished assembling a 16-story prototype of Starship's spaceship the day before. Residents said their handlers directed them to a sandbagged area just a few yards to the left of a small riser, on which Musk spoke for about 40 minutes.

Immediately after, he walked offstage, and SpaceX cued the residents to head to the shuttle, which they expected to drop them off at their homes less than a mile away. But once everyone had boarded, SpaceX invited the residents to join them at Stargate: a two-story technology park funded by the University of Texas Rio Grande Valley (which SpaceX uses as a launch control center).

"They turned around and said, 'Well, we're going to take you over here to the Stargate, upstairs, and we're going to have a special guest come meet you there,'" said Patricia Mitchell, who has owned a home in the village since 2005 with her husband, Walter.

SpaceX workers rush to and from a Stargate facility to a launchpad during tests. Dave Mosher/Business Insider They arrived to a spread of wine, beer, cookies, chips, and other snacks. The group got comfortable on couches, chairs, and stools awaiting their "special guest," whom they could only presume was Musk.

As the residents were settling in at Stargate, Musk returned to the stage at SpaceX's work yard to take questions from media. Christian Davenport of The Washington Post asked about SpaceX's long-term plans for the Boca Chica site.

"It will definitely get fancier than it currently is. The reason it's not fancier is because it would have taken too long to build the buildings," Musk said. "I think it will be a lot more buildings and a lot more stuff. Way more stuff than is currently here."

An illustration of SpaceX's planned 39-story Starship rocket system at a launch site in Boca Chica. SpaceX/YouTube

Later on, Jeff Foust of Space News asked about the future of residents in light of the FAA's apparent safety concerns.

"We're going to make sure that the risks to the public is extremely, vanishingly small. Almost nothing, basically," Musk said. "I don't see any fundamental obstacles. We are working with the residents of Boca Chica Village because we think, 'Oh, it's time; it's going to be quite disruptive to their — to living in Boca Chica Village.' Because it'll end up needing to get cleared for safety a lot of times."

He added: "I think the actual danger to Boca Chica Village is low but is not tiny. So therefore, we want supertiny risk. Probably over time, better to buy out the villagers. And we've made an offer to that effect."

Most residents in the room at Stargate didn't learn about the Q&A or Musk's comments — the clearest yet from the company regarding the villagers' futures — until just before 11 p.m.

"We would have rather been down there or streaming. We just weren't savvy enough," Maria Pointer, who was there with her husband, Ray, said.

"Everybody felt like we'd been set up," Walter Mitchell said. "We had questions we wanted to ask right there and have media exposure."

Read more: Watch Elon Musk reveal SpaceX's new plan for Starship, a rocket system designed to populate Mars

As some residents in the room played back streaming video of the Q&A session, agitated at having missed the remarks — and at being in their second hour of waiting for Musk — SpaceX's senior legal counsel addressed the room. She announced that Musk would arrive in about 15 to 20 minutes, noting that anyone who needed to leave could be driven home. She also opened the floor to concerns or questions to pass along.

"She invited a dialogue at that time," Stevens said of the moment. "And suddenly everyone wants to unload on her."

Residents began heatedly questioning the "nonnegotiable" wording in their buyout offers. They also brought up what some described to Business Insider as an "aggressive" two-week deadline to accept the deal, as well as what seemingly everyone felt was an undervaluation of their properties.

"We all felt that deadline, and three times, and 'not negotiable' — we felt that was a threat," Mitchell said.

As the complaints petered out, a few residents left. One person forgot her pain medication, and her husband followed her out. Another left from exhaustion. Silence came over the room just before Musk walked in, which was sometime around 11:20 p.m.

'Nobody knew how to talk to this guy'

Musk. Loren Elliott/Getty Images

Musk arrived with an entourage of about five or six people and immediately walked up to the residents, most of whom were sitting in a small semicircle of chairs and a couch. Everyone stood up, and Musk shook their hands, then he started speaking about why SpaceX picked Boca Chica to be the company's private spaceport.

"He talked about the regulations in Florida and why it was better for them to be here rather than in Florida because things could get done a bit faster," Ray Pointer said.

After a few minutes of opening remarks, Musk paused and there was a brief pause.

"It was pretty awkward. Nobody knew how to talk to this guy," Maria Pointer said. "You could tell people were feeling excited or flattered."

But Ray Pointer apparently broke the silence. In an interview with Business Insider, he said he wasted little time expressing to Musk how he thought the appraisals and SpaceX's buyout offer process generally were unfair.

"I said I thought it was unconscionable that we were having to see ourselves — in so many words — dispossessed with a short-notice letter and the sword of Damocles over our heads concerning eminent domain. Those aren't my exact words, but that's certainly what I wanted to get out," Ray Pointer said. "And then the Mitchells chimed in with their feelings about that as well — similar feelings — and then everyone started going at it."

The Mitchells explained how the offer they received for their property, which the couple planned to pass down to their children, wouldn't buy them a somewhat comparable setup in nearby South Padre Island, the nearest beachside real-estate market (though a much hotter one as a popular tourist destination).

"He was very polite and listened to what we had to say on that matter," Ray Pointer said. "He just absorbed it and waited for the next blow."

When someone brought up the "nonnegotiable" issue with the buyout offer letter, Musk chimed in with an edit.

"He goes, 'It's negotiable.' And everyone goes, 'It is negotiable?'" Maria Pointer said. "It surprised us and floored us."

While the threefold number was not negotiable to be fair to everyone, Musk apparently said, SpaceX would consider new appraisals that addressed residents' concerns. Shortly after that, two residents said they asked about eminent domain and whether or not those who chose to stay would eventually be forced out for reasons of safety or convenience.

"He said that he didn't want to do that; that's not what he wanted to do," Ray Pointer said. "But that's not an answer to the question."

Read more: SpaceX wants to buy a small Texas neighborhood. It can't force residents to move, but a nonprofit that supports the company wields that power.

Two other residents said they "didn't mind" SpaceX's presence and inquired about staying, according to others in the room. (One of the residents previously described himself to Business Insider as "the biggest SpaceX fan in Texas," so much so that he moved to Boca Chica in 2015 to retire near the company's launch site.)

Residents brought up a community meeting SpaceX held in 2015, not too long after the company had broken ground on its launch site. According to residents, officials said the company would — during temporary launch evacuations under a previous (and now abandoned) plan — house residents in hotels in Brownsville, about 20 miles west of Boca Chica.

Walter Mitchell made himself clear. "There are people here that want to keep their property," Mitchell said he told Musk. "I said, 'You guys said in that meeting that you would take us and put us in hotels.' I said, 'Can that work? And they can keep their property?'"

"Well, if they don't mind frequent shuttles to a hotel frequently, we could probably do that," Musk responded, according to Mitchell.

Residents also brought up other grievances and needs: a request for soundproof windows, a more courteous and helpful on-site contact with the company, and more transparency from the company about its activities.

Free Teslas and selfies

After airing their complaints and feeling heard by Musk, residents told Business Insider the "heated" and "exhausting" mood of the room began to change. That shift appears to have happened when the Mitchells cracked a joke: Could Musk throw a free Tesla electric car into everyone's buyout offer?

"We started laughing, almost all of us," Stevens said, though Musk then said that even as CEO, he is required to buy his own vehicles from the company.

From there, residents said the previously "heated" conversation shuffled between a mix of joking and technical explanations. The SpaceX fan struck up a conversation about metals used in Starship. Musk apparently also described a long-term plan to move away from land-based launchpads and instead use offshore platforms near Boca Chica Beach to fly Starship with less risk to the ground.

The above animation of SpaceX's "Earth to Earth" rapid-transportation concept was revealed years ago, but the company has not yet publicly mentioned it in the context of Texas.

"He mentioned that they have to take off right offshore, but they have to land somewhere, right? And you can't do that on land in the middle of Paris, I think he said," Maria Pointer said. "So you have to have offshore facilities everywhere."

As the conversation loosened up a bit more, an aide called an end to the meeting.

"He shook everyone's hand, and at the end of it, everyone took selfies," Ray Pointer said of Musk (though he noted that he himself did not).

'I don't think we were supposed to live next to a rocket-ship yard'

Maria Pointer in her front yard in Boca Chica as SpaceX workers assemble the Starship Mark 1 prototype next door on September 27. Jonathan Newton/The Washington Post via Getty Images

Residents returned home after midnight and began to soak in what had transpired.

"I don't feel like I'm on the dark side of the moon as much as I was before," Maria Pointer said. "I feel like they are seriously learning where all the fault lines were, where all the gaps were, where things were just falling through because they move so fast, and we don't move that fast."

Residents said SpaceX has not only extended its buyout-offer deadlines but also dispatched an appraiser to more fully evaluate their homes and consider properties in coastal areas. If those assessments come back with a more fair valuation, multiple residents who initially said they'd decline the deal told Business Insider they would reconsider selling to SpaceX.

But some residents said they still felt doubtful and pained about their futures. For instance, the Pointers have invested years of work into their Boca Chica property to make it a customized and comfortable retirement homestead. Others said they relied on their properties for rental income or planned to pass them down to their kids.

"I appreciate where he's going. I understand the Mars thing — I got it — and I'm happy with everyone going forward with that. I think that's an important thing to do; he's doing a good thing, and that's fine," Ray Pointer said. "But as far as I'm concerned — for me? — he's ruining my life and my situation out here. That being said, I just have to move on under the circumstances."

Maria Pointer later added: "I just don't think this is our life. I don't think we were supposed to live next to a rocket-ship yard."

SpaceX did not return multiple requests comment for this story ahead of its publication.

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This story has been updated.