Alaska Legislature Funding Kodiak Launch Complex is a Waste of Money

Dear Legislator:

      This message is written on behalf of the Kodiak Rocket Launch Information Group to explain why it is time to stop pouring money into the black hole that is the Kodiak Launch Complex.  KRLIG was formed in 1995 as an ad hoc group of Kodiak residents who were frustrated with Alaska Aerospace's lack of information and refusal to answer questions about the, at that time, proposed KLC.   As we corresponded with scientists, business people, and others around the country connected to the aerospace industry, our extensive research made it apparent that a rocket launching facility in Kodiak would NEVER pay for itself - a fact that has proven to be true.  It was at this point (1996 or 97) that more and more Kodiak residents opposed what came to be known locally as  "Space Pork Kodiak". A few years ago, an AAC official admitted to the Kodiak Island Borough Assembly that launch revenues had never covered the costs of keeping the facility open. 

     Some legislators have used the term "federally funded asset" in relation to the KLC; this phrase is somewhat misleading.  A more accurate term would be, "Ted Stevens funded asset".  When AAC went to AIDEA for a construction loan in the '90s, they were told not to come back until they could prove they would have the business to pay it back.  This never happened because they could not show they would have sufficient launches to pay back a loan and, more importantly, Senator Ted Stevens (at that time on the Senate Appropriations Committee) pushed through unwanted funding to USAF/DoD for initial construction - 40 million dollars, as I recall.  
      Here is a link to a story that explains what happened:  http://kodiaklaunchcomplex.blogspot.com/2008/12/klc-wasnt-wanted-by-military.html      This story appeared in  the Kodiak Daily Mirror in 2008. 
      Here is an article from the NY Times from about the same time documenting the USAF opposition to funding the KLC:  http://kodiaklaunchcomplex.blogspot.com/2008/10/incontrovertible-proof-that-klc-is.html

     Since 1998, AAC has been entirely dependent on state and federal funds just to keep the KLC open.  I am sure that you will hear from them this year that "several companies are interested in launches and contracts are imminent".  They have repeated that mantra for at least fifteen years with few results.  They will tout their "partnerships" as proof they are major players in the launch industry.  Well, without actual launch contracts they are not what they pretend to be.
       As long as Ted Stevens was in the Senate, the federal funds flowed; once he was out, it wasn't long until the Missile Defense Agency canceled the contract that essentially paid the costs of the KLC just to keep it open in case they wanted to launch a target missile.

    You may also hear claims along the "build it and they will come" line......another ploy AAC has used for years to continue to build more infrastructure requiring more money for maintenance, yet not really acquiring launch contracts. Keep in mind that every launch from the KLC has been paid for by federal government agencies - most have been military-funded launches.  Not one private entity has ever paid to launch a rocket in Kodiak.

    The last launch was September 26, 2011, and as of February 9, 2014,  there are no launches listed for 2014 on their website.  We don't know many businesses that can or should survive when, in almost three years,  they don't perform the service for which they were created.  Funding of the KLC is simply corporate welfare.

    The KLC was built on false premises, a non-existent (or fantasy) business plan, and now just sucks state funding for high salaries for its corporate officers (who do not reside in Kodiak) and maintenance for an ocean side facility that is quickly rusting away.  AAC will claim that they are bringing income and jobs to Kodiak.  This simply not true except when there is construction going on which provides short-term benefits although often the workers are from off-island or even out of state.

     Finally, it is my understanding that AAC has been paying a monthly stipend of $15,000 to the owner of the Narrow Cape Lodge which is used for lodging launch-related personnel;  it has been empty for the nearly three years since the last launch at the KLC.  We have learned that a legislator is trying to get state funds for AAC to purchase the "Space Hotel", which would mean even higher costs for them to maintain the KLC.  This purchase would be a waste of our dwindling state funds.

    Alaska Legislators, thank you for your attention to this issue.  It really is time to stop wasting money on this state boondoggle and close it down.   We have better and more productive uses for state money than the "Launch Pad to Nowhere". 

 We urge you to take action to stop this unrecoverable loss from our dwindling state coffers.  We look forward to your reply and thank you for your service to our state.

Launch or Lose Funding Ultimatum Given to Alaska Aerospace

Legislature pressures Alaska Aerospace to launch

by James Brooks/ editor@kodiakdailymirror.com

Apr 22, 2013

On Sunday afternoon, a rocket soared to orbit from a launch pad on Virginia, a successful launch that may mean good news for the Kodiak Launch Complex 4,000 miles away.

This spring, the Alaska Legislature voted to cut 1 percent (about $80,000) from the Alaska Aerospace Corporation’s FY2014 funding. Hidden within the funding for Alaska Aerospace — which operates the Kodiak Launch Complex — is a catch.

If Alaska Aerospace does not sign a long-term commercial launch contract by March 31, 2014, the legislature will cut its budget by one-quarter.

That’s below the amount AAC leaders have said is necessary to maintain the Kodiak Launch Complex and keep AAC running as a viable corporation, but AAC CEO Craig Campbell said he’s confident his company can meet the challenge.

“I concurred with the challenge that we need to produce a customer in the next fiscal year,” he said. “They actually gave us a little breathing room.”

Alaska Aerospace Corporation was founded by the state in 1991 as a means to develop the aerospace sector of Alaska’s economy. It built the Kodiak Launch Complex to compete with California’s Vandenberg Spaceport, which launches satellites into polar orbits.

While the first years of AAC’s operation were funded through revenue from launches and grants from the federal government, since 2011 AAC has become reliant upon regular state subsidies.

In 2011, the Legislature approved $4 million for AAC. In 2012, it signed off on $8 million in direct subsidies. That year, Governor Sean Parnell also approved $25 million to expand Kodiak Launch Complex.

Legislators approved another $8 million this year for AAC, but cut the corporation’s funding request by 1 percent, paralleling similar cuts to other state departments.

Rep. Alan Austerman, who represents Kodiak in the state House and sits on the AAC board of directors, said legislators’ patience is running out. “We can’t just let it continue to go on and on and on,” he said.

Campbell said AAC can bear this year’s cut, but he now faces a tight deadline to generate revenue and wean the public corporation off state funding.

Sunday’s launch in Virginia shows one possible way forward. The launch came from Wallops Flight Facility, a state-owned spaceport run by Dale Nash, who headed Alaska Aerospace before Campbell.

The rocket, named Antares, was designed and built by Orbital Sciences, which has not yet picked a West Coast launch site for the Antares. Kodiak is in the running, as is Vandenberg.

Launching the Antares from Kodiak would require a major expansion of the spaceport here, something already planned under an agreement with Lockheed-Martin.

Lockheed, however, has been slow to sell space aboard the rockets it plans to launch from Kodiak, and planning for the Launchpad expansion has stalled. Unless Lockheed can confirm a launch date, Campbell has said he will not put state money at risk by expanding the Kodiak Launch Complex.

Orbital Sciences offers a second route. Because the Antares launch Sunday was successful, that rocket may be more attractive than Lockheed’s to satellite owners who want to reach orbit.

The ball is in Orbital Sciences’ court, but Alaska Aerospace isn’t sitting still.

As it waits for an answer from Orbital and Lockheed, the state-owned corporation is negotiating contracts for smaller rockets that can be launched from Kodiak’s existing launchpads.

“I think I’m going to have one in the near term, this year,” Campbell said.

Campbell’s optimism is matched by Sen. Gary Stevens, who formerly sat on AAC’s board of directors and represents Kodiak in the Alaska Senate. “I think you'll find that in the next two years they'll have some successful projects and some successful launches,” he said. “I think it’ll show that they’re in the market and they can successfully compete.”

Until a company signs on the dotted line, however, AAC will continue to move closer to March 31, a date that might be its final countdown.

As of April 22, it has been 573 days since the last launch at the KLC.

Contact Mirror editor James Brooks at editor@kodiakdailymirror.com.

Read more: Kodiak Daily Mirror - Legislature pressures Alaska Aerospace to launch

State of Alaska Will End Up Paying Entire 125 Million Dollar Bill for Launch Pad

There have been various news releases recently regarding the Alaska Aerospace Corporation and Kodiak Launch Complex funding for Launch Pad 3 construction. Gov. Parnell recently approved $25 million on top of the $8 million inserted into the state’s operating budget for the AAC for the remainder of 2012 ($33 million total) and the governor and AAC would like the public to believe Lockheed Martin will finance $100 million out of the $125 million needed for Launch Pad 3 and future KLC infrastructure.

However, the State of Alaska Capital Project Summary Fiscal Year 2012 Supplemental (March 8, 2012) proposed budget list for FY13 and FY14 shows the state’s proposed designated general funding of $100 million to the AAC “to complete the facility.” While lying to the public the state is prepared to foot the whole bill. The AAC is back to square one before the launch complex was built, when it had no funding and former CEO Pat Ladner said, “Build it and they will come.”

The Missile Defense Agency (via the Air Force) gave $80 million in 2010 to the University of Alaska Fairbanks for defense programs and for the AAC and Kodiak Launch Complex. How much did the AAC receive?

Regarding larger vehicle launches from the KLC the AAC board of directors is sitting on important environmental hazard information that it does not want the Kodiak public to know, especially those people living in close proximity to Narrow Cape. Concerned residents should check out the Kodiak Launch Complex section in NASA’s Environmental Assessment for Launch of NASA Routine Payloads, dated November 2011, as the hazards are listed. Before any further KLC infrastructure takes place, the public should demand a site-specific environmental impact statement for Narrow Cape because of future contamination to the island and human health risks.

By Carolyn Heitman

Read more: Kodiak Daily Mirror - State will end up footing whole bill for new launch pad

Funding shuffle hides money going to Launch Complex (by Carolyn Heitman)

(Note that it's been over 9 months since a launch has occurred at the KLC and only one launch is scheduled for 2011 (27 Sept) as of 24 August 2011)
The Alaska State Legislators recently cut $4 million dollars to the Alaska Aerospace Corporation (AAC) to cover operating costs for the rest of 2011. However, the governor’s fiscal year 2012 budget still includes $4 million out of the $8 million AAC is requesting for operating and sustainment funding. Currently AAC has $29 million in its account for the remainder of 2011 and should use its own funds rather than ask for more handouts from the state. Perhaps if it did not pay its top employees such high wages it would have more operating funds. Annual salaries are over $2 million.

In order to finance AAC and the Kodiak Launch Complex through the rest of 2011 Sen. Lisa Murkowski, Sen. Mark Begich and Rep. Don Young have requested $9.5 million from Congress.

Since AAC is set up as a private corporation with corporate bylaws, it is time the state and federal government (using taxpayers’ money) stop funding it and the Kodiak Launch Complex. Without federal funding neither would be operating. Since 1993 the AAC has received a minimum of $305.7 million dollars in revenue — $144.8 million in federal grants, $134.3 million launch revenues and $26.6 million from the state of Alaska (mostly flow-through federal monies) — and to date AAC has not paid any dividends to the state, which was the original agreement. It would be interesting to know how many other private corporations are financially supported by the federal government, thereby adding to the national debt.

Last year when the Missile Defense Agency (MDA) stopped funding the Kodiak Launch Complex, it left a nice parting gift to the state by giving $80 million to the Air Force. In turn the Air Force funneled the same amount to the University of Alaska Fairbanks, a portion of which will be appropriated to AAC.

Starting in July AAC will operate under the Alaska Department of Military and Veteran Affairs, while at the same time intending to establish an Alaska Aerospace and Missile Defense Technology Center through the University of Alaska, which would make it more difficult to track Department of Defense/federal funding to AAC, Kodiak Launch Complex and Fort Greeley. It doesn’t hurt having retired military employees working for AAC, UAF (president) and ex-employees of the AAC working for the University of Alaska to rubber-stamp and push through Department of Defense funding for missile defense programs without the public’s knowledge. Talk about a stacked deck!

AAC also intends to use the National Guard Cooperative Agreement for further Kodiak Launch Complex infrastructure development (Alaska Aerospace Corporation Financial Statements, June 30, 2010) and much needed federal funding could be directed away from the needs of the National Guard. In past years federal funding for the Kodiak Launch Complex was earmarked and funneled via of the Army National Guard at Elmendorf Air Force Base — again to make funding more difficult for the public to track.

AAC is a private corporation which will operate through both the state of Alaska and the Department of Military and Veteran Affairs, doing Department of Defense activities on state public land (Narrow Cape). Where else has the Department of Defense launched missile targets and defense satellites from public-use lands? Something is wrong with this picture.

In October 2010 the Alaska Aerospace Corporation received $227,195 from the Federal Aviation Administration (the agency who licensed the KLC and is also a cooperating agency with the AAC) for the First Commercial Space Transportation Infrastructure Matching Grant for a Rocket Motor Storage Facility for the Kodiak Launch Complex (now the FAA is helping fund construction projects at the KLC). The AAC is always claiming to be broke and asking for hand-outs so where did it get the matching funds? The storage facility is not one building but will consist of 5 ‘Earth Covered Magazines’ (dirt covered structures). The first structure was completed last year and the second is scheduled to be completed this year. The Kodiak Launch Complex was never intended or developed to be a commercial launch site but a government/military facility. The AAC’s goals also include the creation of a Kodiak Economic Development Zone. Who will most benefit from that action remains to be seen.

This summer the AAC is planning preparation work for the installation of a ‘Liquid Oxygen Air Plant’ at the Kodiak Launch Complex (KLC) for larger ‘medium-lift’ launch vehicles that require liquid fuel. The vehicles would take off from Launch Pad 3 which will be located on the Cliffside above Fossil Beach. The AAC has consistently told the Kodiak public from the beginning that NO liquid- fueled vehicles would be launched from the KLC, only solid fuel vehicles. The liquid fuel plant could potentially leave the door open for launching interceptors from the KLC in the future, depending on new U.S.-Russia treaty agreements.

The previous U.S.-Russia ‘Start Treaty’ prevented the launch of interceptors from the KLC. However, the 2011 AAC ‘Proprietary and Competition Sensitive’ report mentions just that. An excerpt from the report states: “With the maturing of the missile defense industry, there will be a need to provide sustainment testing of the system to insure that the mission readiness of the interceptors does not degrade. Test launches of interceptors from the KLC can accomplish such testing without taking the missile defense system off-line. This sustaining aspect of missile defense is possible at KLC and AAC may have an opportunity to regain missile defense operations at KLC.” Are missile silos in Narrow Cape’s future?

When I contacted the Alaska Department of Natural Resources (AAC’s landlord) to find out if the Alaska Aerospace Corporation had provided an updated detailed plan of operations or a permit application for the liquid fuel plant, I was told that the DNR transferred land management rights and authority to the AAC and that the DNR is a ‘cooperating’ agency. Being a cooperating agency the DNR should be well informed of what is transpiring out at Narrow Cape, however, the department had no knowledge of the liquid fuel plant or was not willing to release the information. There has been no updated DNR/AAC Land Management Agreement or Development Plan since 2009, nor when contacted, did the Federal Aviation Administration admit to receiving a permit application from the AAC for the installation of the liquid fuel plant. Apparently the AAC is blatantly going ahead with whatever development it chooses at Narrow Cape without applying for permits or notifying the DNR or the Kodiak public of any proposed plans. No thanks to Senator Stevens the AAC was never required to do a Narrow Cape/KLC ‘site-specific’ environmental assessment.

Kodiak has a local representative (retired military) sitting on the Alaska Aerospace Board of Directors along with Rep. Austerman (a non-voting member) but residents as a whole very seldom get any updated reports or feedback in the local paper on what the AAC is proposing for Narrow Cape. When it comes to Alaska state public lands any development is suppose to be for the maximum benefit of the people and Kodiak does not need another Vandenberg or Cape Canaveral. From the AAC’s actions all these years it appears to have been originally set up as a military entity under disguise of a state agency, hiring mostly military retirees and their NASA friends and taxpayers should not be stuck with financially supporting it and the KLC and it is time to take away the Golden Fleece.

Carolyn Heitman is a 44-year Kodiak resident.

Read more: Kodiak Daily Mirror - Funding shuffle hides money going to Launch Complex