Why NASA's Fire Sale Is Good News for Florida

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Boeing / Reuters

An artist's rendering of Boeing's proposal for a Crew Space Transportation spacecraft approaching the International Space Station

It's never easy watching an English aristocrat sell off parts of the family estate. First the fields and stables go, then the guest wings. Before you know it, you're confined to a few rooms on an upper floor while tourists tromp through the faded parlors and dining salons.

NASA is learning a thing or two about how old aristocracy feels. With the shuttles mothballed, the U.S.-manned program grounded and once buzzing control centers and launchpads standing empty, the agency announced this week that it will surrender three major buildings on the grounds of the Kennedy Space Center to private industry and is perfectly happy to put more of its infrastructure up for grabs as well. To NASA old-timers, it was one more bit of ignominy for a sadly diminished brand. To the aerospace industry and the state of Florida, however, it looks like smart business.

The postshuttle era was never going to be easy, with the loss of 6,000 jobs in Florida and thousands more in Houston and elsewhere. NASA still needs to make the low-earth-orbit milk runs to the International Space Station that were the shuttle's sole job in recent years, but that work is now being handled by Russian Soyuz ships, an arrangement that does nothing for the idled American workforce and costs the U.S. a cool $62 million per seat every time an American astronaut goes aloft. To keep the country in the space game, the Obama Administration decided on a two-pronged approach: NASA would focus its attention on unmanned missions to the planets and deep-space manned missions to be flown in the next decade or two, while private companies would compete for the earth-orbit part of the space portfolio.

Layoffs and hardship for space-shuttle workers.

One of the most powerful players in the industry, Boeing Aerospace, is betting big on winning that competition. Boeing will take over a trio of empty buildings at the Kennedy Space Center, including an Orbiter Processing Facility (OPF), a 128,000-sq.-ft. (12,000 sq m) hangar and office building, where the company will design and build a crew vehicle that it says will be ready for a test flight by 2015. Moving the operations to Florida will not only put the manufacturing facilities just a few miles from the launchpad — as opposed to a couple thousand miles — but also claw back 550 jobs lost in the shuttle stand-down.

"Neither NASA nor the space coast can afford to stand still," said NASA administrator Charles Bolden during an announcement ceremony in the OPF. "We must be aggressive in pursuing this next generation of space exploration and the jobs and innovation that come with it."

NASA's willingness to carve up bits of itself and hand them over to private industry is as much a real estate issue as anything else. The agency has always had an easier time building infrastructure when the money is flowing than unbuilding it when the funding spigot has been turned off, simply because Washington doesn't often pick up such wind-down costs. But in the case of the aerospace community in Florida, that's not necessarily bad. Available buildings and an idle but highly qualified workforce are catnip to industries looking to relocate — provided the state can offer the tax breaks and other incentives to make the move worthwhile.

In 2006, with the shuttle shutdown looming, the Florida legislature established a publicly chartered corporation called Space Florida to dangle the carrots and cut the deals necessary to coax those moves — and it has had some real successes. AAR, an aircraft-maintenance-and-repair corporation, recently moved to Melbourne, Fla., not far from Cape Canaveral. Lockheed Martin, which is building NASA's multipurpose crew vehicle — a souped-up Apollo spacecraft that will be used for the eventual deep-space missions — has relocated its operations to an empty building on the grounds of the Kennedy Space Center. "The state spent about $35 million to refurbish the building," says Frank DiBello, president and chief executive of Space Florida. "But that investment has created about 385 jobs."

It's the Boeing move, however, that has caused the most excitement, with its bigger jobs footprint and successful repurposing of so much Canaveral real estate. What's more, Boeing is not the only company in the commercial space game. California-based SpaceX has already set up operations at the nearby Cape Canaveral Air Force Station and successfully launched an unmanned version of its crew vehicle into orbit and recovered it safely. The company has inked a $1.6 billion contract with NASA for a dozen unmanned cargo runs to the space station, with the possibility of manned flights to follow.

Three other companies, including Virginia-based Orbital Sciences, Washington-based Blue Origin and Nevada-based Sierra Nevada, are also battling for a slice of the commercial-space pie. All of them could compete both for NASA's business and for any other enterprises that open up in earth orbit — and all of them have Space Florida's attention. Only some of the young companies will thrive — that's the nature of the competitive beast — but that's not Florida's concern.

"We're focused on job creation," says DiBello simply. "We're offering them Florida's workforce." He is even courting other countries with fledgling space programs that might not want to build their operations from a standing start. For them, the state offers something that's impossible to duplicate just anywhere in the world: a location close to the equator, which adds velocity when a rocket is launched and makes it easier to achieve orbit — one of the reasons the U.S. built its launch facilities at Canaveral in the first place.

The space program, of course, has always been at least partly a jobs program, but in the past, that was subordinated to the larger, flag-waving business of putting Americans in orbit and boot prints on the moon. In an era of budget austerity and diminished expectations, the jobs part might have to come first. The gamble is that the thrills will follow.