More on the XCOR-Midland deal

Today’s Midland Reporter-Telegram has more details about the agreement between XCOR Aerospace and the Midland Development Corporation (MDC) that will be formally announced Monday. It confirms earlier reports that the deal will involve XCOR moving its corporate headquarters to Midland and establishing an R&D center there, while maintaining its facility in Mojave, California, as well as, interestingly, “seek a location for an operational base on the East Coast.” XCOR COO Andrew Nelson told the paper that the company’s R&D unit is the “heart and soul” of XCOR: “All of our senior people — they’re going to be working and living there.”

The company will gradually ramp up operations there while Midland International Airport gets its spaceport license—a process expected to take 18 months—and make improvements to the hangar it will use there. XCOR will sublease the hangar from MDC for $1 per year for 10 years (MDC will lease the hangar from the city, which owns it, at the market rate of $6,000 per month; over $700,000 of the $10-million deal covers the difference in those rents.) XCOR promises under the deal to have $200,000 in payroll based in Midland during than initial 18-month period, growing to $1 million in the first 12 months after the airport gets its spaceport license and then to $12 million in 60 months. That deal, the paper adds, including “clawbacks” should XCOR fall short of those payroll milestones in the contract.

The article adds that XCOR has been interested in Midland for a few years, identifying it (among several other locations) as a possible expansion site several years ago, but put those plans on hold until last year because of the state of the economy. XCOR was in “serious discussions” with another, unnamed city when MDC, unaware of XCOR’s interest, contacted the company based on recommendations provided by a consulting firm.

The deal, to be announced Monday after approval by the MDC board of directors and the Midland City Council, has attracted a high-profile guest: Texas Governor Rick Perry, who will appear at a press conference announcing the deal at the Midland airport. This press conference is different from the media teleconference scheduled for Monday afternoon, which will feature XCOR and MDC executives as well as unspecified local government officials.

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