Louisiana is teaming up with NASA in a bid to attract new tenants and businesses to a “Space Campus” in East New Orleans that could help the state diversify its economic base and help a city whose economy was hard hit by the COVID-19 pandemic.
NASA and the Louisiana Economic Development agency will explore developing new facilities inside the space agency’s Michoud Assembly Facility, a 50-acre business park, which already has commercial and government tenants.
The Space Campus would see additional commercial office development for existing tenants and new prospects from the public and private sector. Business investment wouldn't be only for the aerospace industry, but aerospace firms will be encouraged to look at the possibilities afforded to them there.
The main building at MAF now consists of a climate-controlled manufacturing space. Existing tenants include Boeing, which is assembling the Space Launch System, and Lockheed Martin, which is developing the Orion crew capsule.
“This year, as we celebrate 60 years of NASA’s operation of the Michoud Assembly Facility, we proudly announce a new chapter in this site’s storied history,” said Gov. John Bel Edwards. “We are excited about partnering with NASA for the development of the Louisiana Space Campus, and we look forward to the future tenants who would locate here.”
Louisiana Economic Development's role is to strengthen the state's business environment and create a resilient economy and the city is looking to take advantage of the investments.
“We're excited about the potential economic impact on the city, especially in light of our ongoing work to revitalize our economy as we recover from the COVID-19 pandemic," said Jeff Schwartz, director of the Mayor's Office of Economic Development in New Orleans.
Louisiana has reported 438,000 coronavirus cases since the pandemic began and recorded 9,903 deaths, of which 28,970 cases and 775 deaths were in New Orleans.
The state is taking a step in the right direction, said John Hallacy, founder of John Hallacy Consulting LLC.
“It’s a laudable goal for Louisiana to try and diversify the base of its economy away from a heavy reliance on petrochemicals and natural gas,” Hallacy said. “I think a 50-acre campus is a reasonable way to start, by helping to spur local economic development.”
While the process is still in the early stages of development, it’s possible a sizeable amount of municipal bonds could be issued for the space campus should the project move forward.
Louisiana wants the Space Campus to be fashioned after the 35-acre Water Campus project. Located between Baton Rouge and the Louisiana State University's main campus, public and private investment has totaled more than $100 million in the initial phase of development. Long-term, the Water Campus hopes to see 4,000 scientists, engineers, researchers and support personnel working there.
The Michaud site hosts defense and civilian agencies and contractors that support development of new products and services. The space campus aims to build on that with a new initiative to attract more tenants.
Robert Champion, NASA director of the Michoud facility, said he was excited at signing a memorandum of understanding with the state.
“For 60 years, NASA has enjoyed a great partnership with Louisiana that has propelled the success of our nation to launch humans into space,” he said in a news release. “This MOU represents an opportunity to further strengthen that partnership as the work at MAF moves us a step closer to landing the first woman and next man on the moon.”
Since NASA took it over in 1961, Michoud has been part of a variety of space program projects including the development and building of space vehicles.
“This agreement will further drive transformative development in New Orleans East, which is already becoming a major hub for STEM in our city,” said New Orleans Mayor LaToya Cantrell. “With continued partnership from the state, a Louisiana Space Campus will not only provide jobs and economic opportunity, but will also inspire us all, particularly our young people, to dream big and boldly.”
Hallacy agreed that young people would benefit from the project.
“This will be a chance for the educational institutions in the area to work with campus businesses to create programs to help graduates get work in their enterprises,” Hallacy said, adding that "space exploration is a hot area once again."
He said the new development would be a boon to the city’s economy as well as helping the state’s revenue base.
“Hopefully, it will employ more than just a handful of research and development people,” Hallacy said.
He noted that while it was great to have high-paying R&D positions, jobs for local workers at the space campus would carry salaries that were generally higher than the average for other workers in the area.
Louisiana’s general obligation bonds are rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch ratings. Since 2011, Louisiana has sold about $9.5 billion of bonds. New Orleans GOs are rated A2 by Moody’s, AA-minus by S&P and A by Fitch. Since 2011, New Orleans has sold about $1.3 billion of bonds.
“The creation of an ‘office park for rocket scientists’ would not only support NASA and America’s space mission, but would also create a physical hub for hundreds of STEM-related jobs in the region and state,” said Michael Hecht, President and CEO of Greater New Orleans Inc.
Some MAF’s major achievements include building Saturn V rockets for 13 separate Apollo and Skylab missions; development of 135 external tanks that fueled Space Shuttle flights; and current SLS rocket and Orion crew capsule assembly.
“Right here in New Orleans at the Michoud Assembly Facility, the rockets to take Americans into outer space are now being built, and will continue to be built, to transport them to Mars,” Cantrell said.
