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- SpaceX is building a Starship rocket-development site and future Mars spaceport in Boca Chica, a remote beach area at the southern tip of Texas.
- SpaceX established its launch site amid a hamlet of about three-dozen homes owned by retiree-age residents.
- Following a marathon of construction and testing, SpaceX in late 2019 presented every homeowner with a buyout offer.
- While many residents initially rejected the deal, SpaceX has managed to persuade more than half of the homeowners to sell. However, several who signed a deal told Business Insider they felt forced to do so under the circumstances.
- SpaceX did not respond to Business Insider’s requests for comment.
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The pathway to Mars is a Grand Canyon, or even a Valles Marineris, of engineering hurdles.
But in tech-entrepreneur Elon Musk’s quest to settle the red planet with a million people, neither he nor SpaceX, the rocket company he founded, likely anticipated a very earthbound and pernicious human challenge: a village of retiree-age homeowners.
For SpaceX to establish permanent cities on Mars, as Musk hopes to do, off-world colonists will need advanced life-support systems, habitats able to block out worrisome radiation, and other crucial technologies that don’t yet exist. Martians will also require a powerful, reliable, affordable, and as-yet hypothetical rocket ship to get supplies and themselves to and from the planet.
Creating an interplanetary human-transport system is the most urgent piece of the Martian puzzle to solve, according to Musk, because it would spur experts beyond SpaceX’s walls to solve the other core challenges of getting to, and surviving, on Mars.
SpaceX, of course, is well on its way toward developing such a rocket system, and it’s called Starship.
The company has built, tested, and begun to mass-manufacture Starship’s car-sized rocket engines, called Raptors; used three of them to successfully launch, hover, and land a stubby steel prototype called Starhopper; and now hopes to fly a 16-story test rocket ship nearly 12.5 miles (20 kilometers) into the South Texas sky, according to an experimental license application submitted by SpaceX to federal regulators this week.
The finished 39-story launch system is designed to include a 22-story rocket booster, called Super Heavy, and be fully reusable, unlike any rocket today. Work toward that dream is progressing rapidly in a region of Cameron County that locals call Boca Chica.
Yet standing in the company’s way is a hamlet called Boca Chica Village and its 30 or so homes.
Options trading The allure and exasperation of Boca Chica
Boca Chica is a remote, bucolic, and beachy strip of land at the southern tip of Texas. SpaceX began seriously considering the region for a commercial launch site in 2011, according to former Cameron County officials interviewed by Business Insider.
The site would be private, allowing SpaceX to move faster and with far less hassle than at its government-leased launch sites in Cape Canaveral, Florida, and Vandenberg Air Force Base in California. Boca Chica is also near the Port of Brownsville, which would permit the delivery of large quantities of propellant and supersized rocket parts. Just east of the site is the Gulf of Mexico, which gives SpaceX a relatively clear range over which to safely launch rockets.
And being close to the equator, the company could use Earth’s rotational momentum to save a little fuel and provide extra assurance that a satellite or other payload would reach orbit.
What’s more, Carlos Cascos, the former judge of Cameron County, previously told Business Insider that Musk viewed the Brownsville area, which is among the US’s poorest regions, as a kind of “genesis project” for boosting economic opportunity.
So starting in May 2012, a subsidiary of SpaceX began acquiring abandoned properties on the cheap. By July 2014, the company gained approval from local, state, and federal authorities to proceed with a spaceport, and in September of that year, Musk, then-Gov. Rick Perry, and others ceremoniously plunged shovels into Boca Chican dirt.
“We’ve got a lot of land with nobody around, and so if it blows up, it’s cool,” Musk said about the yet-to-be-built Starhopper prototype at a press conference in February 2018.
Except there were, and still are, people around. Many didn’t take kindly to Musk’s off-the-cuff remark, especially with the company building a launchpad 1.5 miles from the village’s easternmost house.
“He ought to put one of these in his backyard himself within a mile and a half of his house and launch it, and if it blows up, it would be really cool. Wouldn’t it?” Keith Bloomer, whose family has lived in Boca Chica Village for nearly five decades, told the local CBS affiliate KTHV after Musk’s statement. (SpaceX responded at the time by saying that “Texas is home to hundreds of SpaceX employees and their families,” and the “notion that SpaceX would do anything to endanger them or any of our neighbors is simply not true.”)
Seventeen months later, on September 12, 2019, SpaceX offered to buy out every homeowner in the area around its spaceport site for three times the value of a base appraisal for their properties.
“Elon really did not want — and I totally agree — did not want a situation where one individual might fare better or worse, financially, than their neighbor by virtue that they were a better or weaker negotiator. That did not feel right,” David Finlay, SpaceX’s senior director of finance, told residents in January.
The company, in a letter mailed to all residents by Jones Lang LaSalle, or JLL, a US commercial real-estate firm with offices in Houston, ostensibly gave residents two weeks to decide.
“When SpaceX first identified Cameron County as a potential spaceport location, we did not anticipate that local residents would experience significant disruption from our presence,” the letter read. “However, it has become clear that expansion of spaceflight activities as well as compliance with Federal Aviation Administration and other public safety regulations will make it increasingly more challenging to minimize disruption to residents of the Village.”
At the time, many villagers told Business Insider they planned to reject the deal.
Several homeowners told Business Insider that the appraisals undervalued their properties by using comparison properties that had been foreclosed, sold under duress, or located in a dissimilar area. The JLL appraisals, they added, also docked home values for not being close to bars, restaurants, gas stations, and other amenities found in populated areas. (Brownsville, the closest populated area, is a 30-minute drive west of Boca Chica.)
Even with a threefold boost, many residents felt they could not replace the haven of wildlife they’d found.
“I wrote to them that they can’t value Boca Chica based on amenities and city values,” Dave Cohen, who recently sold his Boca Chica home to SpaceX, told Business Insider. “You live out there because it’s out in the middle of nowhere — it’s because they want to get away from the whole city thing.
“Boca Chica is not Brownsville — I would never own anything in Brownsville. Every place I live is in nature. So was Boca Chica when I bought it.”
Among other concerns, residents were frustrated by the high-pressure timeline to accept the offer.
“I really do want to get out of SpaceX’s way, and I want them to succeed and do what they’re supposed to do,” Maria Pointer, who had hoped to spend the remainder of her life in Boca Chica, told Business Insider in September. “But I want them to support me also, and it’s also not going to be at an eminent-domain price.”
Perhaps sensing that SpaceX’s buyout plan was on shaky ground, Musk himself got together with the area’s most outspoken and upset residents in a private on-site meeting. Those who attended characterized the discussion as “awkward,” “tense,” and “heated.”
After Musk’s meeting with residents, months ticked by with few sales. But new reporting by Business Insider suggests homeowners have sold at least 17 properties — more than half of the remaining pool — to SpaceX, or are finishing a sale with the company. Conversations with the remaining residents about selling are apparently ongoing.
The list of coming departures includes Pointer, who has been among the most vocal with the press and on Facebook about the friction with SpaceX and the terms of the deal. She and her husband, Ray, recently signed a three-times-appraisal deal, the details of which they did not want to disclose. They plan to move out by March 31.
“I wouldn’t say I’m satisfied, but I’m relieved,” Maria Pointer told Business Insider. “We needed to get on with the next chapter of our lives.”
Options trading ‘I feel like I’ve had a gun to my head’
According to some residents who attended two private meetings with SpaceX officials in 2015, the company said they could keep their homes but would have to accept staying in company-paid hotel rooms in nearby Brownsville during certain rocket-launch activities (since there is an unlikely, but significant risk of explosion) about one day a month, on average.
But SpaceX’s shift to buying everyone out instead was no bullet from the blue.
The three-times offer, as residents call it, arrived by certified mail after months of all-night development work, police handing out safety notices warning of possible window-breaking explosions, an 80-acre brush fire that SpaceX inadvertently started with an engine test-firing, frank discussions with FAA officials (which in part led to a 33-fold boost in SpaceX’s launch-accident insurance requirements), and Starhopper’s eventual and dramatic 500-foot-high flight in August.
The FAA says it has not asked SpaceX to permanently remove everyone from the area to grant a launch permit or license for Starship operations.
“Unless there are operations that cause full-time danger to the public … then we protect the public only during those operations that are hazardous. So it’s not 24/7,” Brigadier Gen. Wayne Monteith, the FAA’s associate administrator for Commercial Space Transportation, told Business Insider. He added that persuading residents to move permanently is part of SpaceX’s “business case” and not something the FAA has mandated.
SpaceX is permitted to close Highway 4 — the only road out to Boca Chica Beach, which runs through the planned spaceport — three times a month, on average. That’s according to the company’s environmental-impact statement, a document that regulators required before the company could begin building out a spaceport, and its original agreement with Cameron County.
Full-time residents such as the Pointers said that while they’ve enjoyed watching and documenting SpaceX’s progress up close, they’ve grown exhausted with a situation they never sought in retirement.
In interviews with Business Insider in the past year, the Pointers frequently expressed fears of being pushed out of their homes by a quasi-governmental entity called the Cameron County Development Corp. The group, essentially formed to support SpaceX, has eminent-domain authority for “spaceports,” and its chair told Business Insider last year that he’d “be willing to explore” using the power if necessary.
The Pointers say they were glad to put their fears and sleepless nights behind them, even though they feel they did not get the value they were seeking for their home.
“It’s a good thing,” Maria Pointer said. “This is a test area. It’s too noisy and you can’t sleep — they’re working 24/7. Do you really want all of this 600 feet from your bedroom window?”
It’s unclear why other vocal holdouts, such as Bonnie and Terry Heaton or Sam Clauson and his wife, Bernice, sold their homes to SpaceX. For years, both families had openly criticized the company and initially eschewed its three-times offer. Neither couple responded to interview requests.
One resident, whose identity Business Insider verified but who requested anonymity for fear of reprisal, said of selling their home: “I feel like I’ve had a gun to my head to make this deal. It’s like they’re saying, ‘Take this or else.'”
SpaceX did not respond to requests for comment, and JLL declined to speak with Business Insider on the record. But a person close to the matter, whose identity Business Insider verified but who also requested anonymity, said the buyout offers took on more relaxed timelines after the initial letter, that resident disputes over property values are “a matter of opinion,” and emphasized that the buyout process was professional.
The resident who spoke on condition of anonymity also noted their decision came after inviting a prominent eminent-domain lawyer to the village to meet about a dozen residents and answer their questions. No one in the room, this person said, walked away feeling emboldened to stand up to SpaceX.
“He said we were in a no-win situation, that all that anyone would get was fair-market value plus relocation costs,” the resident said. Also, the lawyer is believed to have said that SpaceX’s three-times-appraisal offer was a “brilliant” move on the company’s part, since a jury in an eminent-domain proceeding determines how much a homeowner gets — and they would not be sympathetic to anyone who turned down that kind of money.
“Because we’re in a poor county, the typical jury might just be barely above poverty level,” the resident said. “So they’re not going to award us a lot of money, even though this is very screwed up.”
Many people in the village attempted to hire an independent appraiser to secure better buyout offers from SpaceX, but because the valuations could be contested in court — and SpaceX has a formidable legal team — almost no one in the county would do it.
“No appraisers would come out here,” Maria Pointer said. “We went through five, and our lawyer went through three.”
The anonymous resident said they reached one appraiser who “was very empathetic but couldn’t get off the phone fast enough,” adding that the appraiser said: “No way — I don’t want to go to court over it.”
One licensed appraiser did come out, and he assessed about 15 properties for $1,500 each. Although SpaceX is said to have rejected all those appraisals and instead opted to use its own follow-up valuations, residents said the company did work with them to find other ways to slightly boost their property values on paper.
Key to that process — and key to helping holdouts like the Pointers feel heard — was SpaceX flying out Finlay, the company’s senior director of finance, to the village to conduct several door-to-door visits with residents.
This story is the first in a Business Insider series about SpaceX in South Texas called “Last Town Before Mars.”
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