The SpaceX deal to create a manufacturing site on Terminal Island in the Port of Los Angeles is off, Los Angeles City Councilman Joe Buscaino has announced, dealing a setback to the goal of creating a “Silicon Harbor” in San Pedro.
The Hawthorne aerospace company scrapped the new site because it wanted to “streamline” operations, SpaceX said in a statement. The proposed Terminal Island site — originally meant to help develop a spacecraft headed to Mars — had been hailed as a game-changer for San Pedro’s efforts to revamp its waterfront and downtown image.
“While I feel crushed,” Buscaino tweeted Wednesday morning, “I feel confident that other innovators will see the huge value they get in San Pedro.”
In April, the Port of L.A. approved a 10-year lease allowing SpaceX to use the former Southwest Marine Shipyard; SpaceX would have paid $1.38 million a year in rent for the 18-acre Terminal Island site, and could have extended the agreement by as many as 20 years. The company could have offset up to $44.1 million in rent by improving and upgrading the site during the first decade.
SpaceX was set to develop its ambitious Starship spacecraft — which will eventually take folks around the moon and travel to Mars — on Terminal Island.
(The prototype of that craft, formerly known as the Big Falcon Rocket, was recently completed at a facility in Boca Chica, Texas, and is expected to have a test run in March or April.)
When the Terminal Island deal was announced, many saw it as a way to boost the waterfront. Officials began planning a water-taxi service that would take the new SpaceX employees across the Main Channel to the waterfront and downtown harbor for daily lunch excursions.
Everything from shops to dining and housing would get a boost, many locals predicted at the time.
“It’s an amazing opportunity,” Elise Swanson, president and CEO of the San Pedro Chamber of Commerce, said when the deal was announced. “Businesses will be developed and move in to support what’s happening at SpaceX.”
But those redevelopment plans will now have to move forward without SpaceX.
“To streamline operations, SpaceX is developing and will test the Starship test vehicle at our site in South Texas,” the company said in a statement. “This decision does not impact our current manufacture, design, and launch operations in Hawthorne and Vandenberg Air Force Base in California.”
While the Texas facility is home to the Starship prototype, SpaceX will still develop the full-scale version out of Hawthorne, according to the company’s founder, Elon Musk.
Port of L.A. spokesman Phillip Sanfield lamented SpaceX’s decision in a statement Wednesday, but also noted that many other SpaceX projects remain.
“Our ongoing work with Space X and other advanced technology companies,” he said, “is important to our efforts to advance the port through innovation and new technologies.”
Buscaino has also tried to remain upbeat. He said he remains committed to pursuing companies, including a “tech giant,” for what he envisions as an innovation district in San Pedro.
“We are well on our way toward creating an innovation district and Silicon Harbor where you can take a water taxi or a Bird or Lime scooter to work,” the councilman tweeted before dawn Wednesday, when he announced the Terminal Island deal was off. “ElonMusk saw the value, others will too.”
While I feel crushed about #SpaceX pulling the #SuperHeavy out of the @PortofLA, I feel confident that other innovators will see the huge value they get in San Pedro. (1/2)
— Joe Buscaino (@JoeBuscaino) January 16, 2019
We are well on our way toward creating an innovation district and #SiliconHarbor where you can take a water taxi or a @Bird or @Lime scooter to work. @ElonMusk saw the value, others will too. (2-2)
— Joe Buscaino (@JoeBuscaino) January 16, 2019
Staff writer David Rosenfeld contributed to this report.
