Florida Spaceport Authorizes Bonds That Could Be First Issued by the Agency

The Spaceport Florida Authority has authorized $15.5 million of bonds to finance development of a space-vehicle construction plant in what could be the first debt issue to be sold by the authority, its program director said yesterday.

The official, Albert Thomas, said the facility would provide commercial spaceflight companies with flight hardware processing, data retrieval, and analysis. Eastern American Teak Corp. will build the project.

Last October, the authority approved its first bonds - $50 million of revenue bonds to finance space launch and support facilities - but Mr. Thomas said the sale is on indefinite hold because of management changes at General Dynamics Corp., the contractor for that project.

The Eastern American Teak bond authorization, approved Sept. 11, "is the hottest thing we have going right now and I think there is a good chance it will result in a bond issue," he said.

The Eastern American Teak facility will occupy about five acres at Port Canaveral, near launch pads at Cape Canaveral Air Force Station and Kennedy Space Center, and will employ up to 85 people, said Eddie Ellegood, the authority's director of operations.

The company, based in Brevard County, is a privately held Florida corporation that specializes in developing facilities for the commercial spaceflight business.

Mr. Thomas said the borrowing could be arranged as a small-issue industrial development bond issue, in which case the authority would have to apply to the state of Florida for an allocation as a private-activity issuer. This approach could result in a bond issue by mid-1992, he said.

If Congress passes pending legislation to guarantee tax exemption for municipal debt issued in support of commercial spaceflight, the authority might be able to avoid the IDBs, Mr. Thomas said.

The bill, sponsored by Rep. E. Clay Shaw Jr., R-Fla., is currently before the House Ways and Means Committee.

Authority officials have argued that the space-launch facility is similar in function to an airport or a port authority, which is allowed to issue tax-exempt debt for publicly owned facilities leased by commercial vendors.

The spaceport authority official said that, even if the bill passes, it may not cover the Eastern American Teak Corp. project, which will not be an actual launch facility. The proposed legislation would amend existing law detailing the tax exemption on airport bonds to include borrowings for space facilities.

Mr. Thomas said the authority has discussed a number of space-launching projects with aerospace companies that could result in "over $100 million" in borrowings if the legislation is passed.

In addition, Mr. Ellegood said the authority also may consider selling bonds to finance 10% of a proposed $1.1 billion coal-powered electrical plant north of Titusville, Fla., by the Southern Electric International Inc. One by-product of the facility, liquid hydrogen, could be used to fuel space launch vehicles.

The authority, established by the Florida Legislature in 1989, is the nation's first debt-issuing agency with specific permission to sell municipal bonds for commercial spaceflight development. Florida lawmakers have set the maximum amount of debt the authority can sell at $500 million.

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