Arlington took its next steps in the commercial space race last week by approving five new components of its agreement with E-Space.
E-Space, a satellite communications startup, is expected to hire 700 people for high-paying jobs in 7 years once its facility at the Arlington Municipal Airport is ready.
The city council on Aug. 26 voted unanimously to approve five resolutions that outline new components of the deal to bring the commercial space company to the city’s municipal airport.
The move outlines expectations between the city and E-Space, what support the company will receive from Arlington in construction and terms for the lease of space at Arlington’s airport.
Lyndsay Mitchell, Arlington’s director of strategic initiatives, said the package of resolutions is the natural next step in the partnership.
“The purpose of the development agreement is to really just set up the relationship between the EDC (Economic Development Corporation) and E-Space related to what we are building,” Mitchell said. “It's a way to explain very clearly what is being built, what is the maximum cost of the project, and some of the other details related to moving forward.”
Those details include terms for a lease, performance expectations and outlining responsibilities of Arlington and the company.
E-Space did not respond to multiple KERA News requests for interview.
The company announced last year it was moving its North American headquarters to Arlington. The company was founded in 2022 by industry veteran Greg Wyler.
E-Space has plans to have offices, manufacturing and logistics based out of Arlington. As part of those plans, the Arlington Economic Development Corp. is building new facilities at the city airport.
Mitchell said those buildings will then be rented by E-Space under a 30-year lease, with two 5-year renewal options.
Those buildings aren’t built yet, though. Mitchell said part of the resolutions passed by council deals with that.
Construction and lease terms
The city will invest up to $115 million in constructing a 480,000-square-foot manufacturing facility, a 33,450-square-foot hangar and to cover “soft costs,” like design, project management and construction management.
The city has already devoted funds to some of those soft costs and initial construction, leaving $88 million of city money to be invested.
It’ll also pay for “horizontal infrastructure” like utilities and landscaping, according to Mitchell.
E-Space will invest another estimated $100 million in the space, according to a presentation Mitchell gave to the council. That expense from the company will cover things like humidity control, a clean room, security systems, specialized manufacturing equipment, office furniture and even a Secure Compartmented Information Facility, or SCIF, that will allow the company to discuss sensitive information confidentially.
After the date the development agreement is executed, Arlington will waive any fees accrued for development, review, permitting, inspection and impact, according to the presentation.
When the structures are completed, E-Space will be locked into a 30-year lease with two opportunities for a 5-year renewal, according to the city. That rent will start at $4.9 million per year and will increase by 3% every five years, according to the resolution approved by the council.
Performance agreement
Arlington has made tax concessions as part of the deal to bring E-Space to the city, but the company has to meet certain standards to receive those benefits.
According to the resolutions, the company will be required to fill 400 jobs in the first five years and 700 jobs in the first seven years with an average salary of $95,000.
“That will be probably the most visible impact for folks here in Arlington,” Mitchell said. “But there's also quite a bit of just general economic impact with what we like to call ringing cash registers all around town. Additional taxable sales that not only E-Space will generate, additional economic activity from their employees.”
Any E-Space sales will also have to originate in Arlington, allowing the city to collect the tax revenue on those sales. Philanthropic support to initiatives and institutions in the city will be required, too, along with a responsibility to promote the city to its investors, suppliers, affiliates and business connections.
In return, E-Space will receive a 75% rebate on city-specific leaseholder and personal business property taxes for the first five years, according to the city. After that, the rebate will drop to 50% through Year 10.
Mitchell said the economic impact of sales taxes isn’t quite clear yet. The company is still relatively new and figuring out things like pricing.
“They're at a stage in their business planning where they have a vision of where they want to go,” Mitchell said. “They're moving quickly and implementing that vision, but it's not completely solidified yet.”
Arlington has also committed to returning a quarter-cent of sales tax for any taxable sales more than $100,000.
Those benefits will not happen if the company does not comply with its requirements.
What comes next
The city will officially break ground on the project sometime in September, according to the presentation Mitchell gave to the council.
Also this month, the city and EDC are expected to approve debt for the projects. Then, in November, the city and EDC are slated to finalize the vertical construction package.
The project is expected to be complete by Spring 2027.
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