Midland Development Corporation board members have approved what could be one of the largest economic development agreements in the organization’s history.
At a special meeting, board members unanimously approved a resolution authorizing an economic development agreement between the MDC and AST & Science, whose subsidiary AST SpaceMobile manufactures satellites near Midland International Air and Space Port.
Under the agreement, AST will lease a 23.107-acre tract owned by the city of Midland near its present location at the Spaceport Business Park at the northeast corner of the intersection of La Force Boulevard and Business Interstate-20. AST plans to construct a 400,000-square-foot building for satellite manufacturing and production on the acreage. As part of the agreement, AST also agrees to create 1,600 full-time jobs with a payroll of $128 million by the end of 2036 and invest $100 million in facilities and equipment by the end of 2034. AST would be entitled to earned capital incentive payments if it creates and maintains an additional 200 full-time jobs and increases its payroll to $144 million. This would make AST among the largest private employers in Midland.
“This positions Midland as a national hub for space, defense and communications,” MDC Executive Director Sara Harris told board members.
If the facility is fully built out, the agreement would mean $1.466 billion in annual regional economic output and expand Midland’s gross domestic product by 1.8%. It would also support 4,000 additional jobs across the region.
AST arrived in Midland in 2018 under an agreement to create 162 jobs and make $14.25 million in capital investments in exchange for MDC incentives. Last year, the two entities approved a new agreement for AST to create 50 new jobs and make $3 million in capital investments. The agreement just approved does not replace either agreement, Harris said.
Harris stressed to board members that the agreement does not include a property tax incentive.
“This is fully taxable property value that could generate $116 million in property tax revenues over 40 years. It’s a 132% return on investment from property taxes alone,” she said.
The agreement also includes a clause under which incentives to AST would be withheld or clawed back if the performance requirements are not met. AST has exceeded its obligations under those prior agreements, Harris added.
MDC agreed to reimburse AST for the first 30 years of the lease term with the amount not to exceed $16 million. Each year from 2027 to 2036 that the company complies with its obligations, MDC will pay AST $3 million in capital incentive payments.
The agreement drew support from some members of the public for the job creation, additional tax revenues and potential to diversify the economy. One speaker called it the type of project that could change Midland’s tax base.
Another speaker criticized the board for what he called a lack of transparency. The short notice for the meeting did not give the public time to receive adequate information to understand the agreement, engage with board members or allow board members to meaningfully engage with the public. He unsuccessfully urged the board to table the vote until its regular August meeting to give the public time to understand the agreement.