At Wallops, a growing financial impact that resonates

A group of business leaders who support the missions of Wallops-area agencies is changing its name after more than a decade. The change is one telling detail from a year that saw significant strides in business activity in the Wallops area in northern Accomack County.

The name change — from the Eastern Shore Defense Alliance to the Wallops Island Regional Alliance — came about in January at a standing-room-only meeting.

"The board decided we'd outgrown the defense alliance (name). We are really representing regional interests," said Chairman Peter Bale, a leader in the unmanned aerial systems industry and senior vice President of SRS GRP.

While the defense alliance name "was tough to give up. There were a lot of people with a lot of smiles in the room" when the group approved its new appellation, Bale said.

The region is attracting increasing attention from outsiders judging by the current alliance membership, which is nearing 250.

"We get everyone from northern Delaware down through to Richmond – we've even had inquiries from Washington, D. C.," Bale said.

Government and business leaders in the region are looking for more growth in the future after a string of successes the past two years at NASA Wallops Flight Facility, and despite one major setback — the explosion shortly after liftoff in October of a rocket carrying supplies to the International Space Station on Orbital Sciences Corporation's third commercial cargo mission under a NASA contract.

A recent study put the economic impact of NASA Wallops Flight Facility in 2014 at more than $808 million, including $248 million in Virginia.

The figure is more than double the number cited in a report commissioned by the defense alliance four years ago, when the impact of all Wallops area operations was set at $400 million — including not only NASA but also Computer Sciences Corporation, Lockheed Martin, the NASA Visitor Center, National Oceanic and Atmospheric Administration Wallops CDA Station, Northrop Grumman, Virginia Commercial Space Flight Authority and VT Griffin/Wallops Institutional Consolidated Contract.

The latest report, by Chmura Economics and Analytics of Richmond, found Wallops Flight Facility spent $85.6 million in Virginia on procurement last year.

The facility, which turns 70 this year, has a $39 million payroll and 275 NASA workers, of whom 165 live in Virginia.

Many more are employed by contractors. Wallops Island Flight Facility supports 1,525 high-tech jobs on the Eastern Shore, according to one of Wallops' biggest boosters, U.S. Sen. Barbara Mikulski of Maryland.

The analysis also found the higher average wage of NASA employees in Virginia as compared to the state's average wage "has important implications for the economic impact due to employee spending."

NASA Virginia workers, including at Wallops and NASA Langley Research Center in Hampton, earned on average $141,702 including benefits last year, compared to the state's average wage of $52,304.

"The indication is that NASA employee spending has a larger multiplier than the average Virginia job, supporting more jobs among consumer-related establishments such as retail stores and restaurants," the report said.

Wallops Research Park open for business

Last year saw substantial completion of the first phase of development in Wallops Research Park, after ground was broken on the $8 million project in a June ceremony attended by Virginia Gov. Terry McAuliffe.

"I'm all in as it relates to Wallops Island," McAuliffe said then, calling the park "the first big piece of what we need to do to build a real aerospace hub" at Wallops.

The 200-acre park, located just outside NASA Wallops Flight Facility, has more than 55 acres cleared and ready for pad development, Manager Julie Wheatley said.

Road construction is nearing completion and water, sewer and storm water facilities are complete, while broadband installation is 85 percent complete.

Additionally, construction is underway on what officials hope will be a major drawing card for businesses — a 1,200-foot taxiway connecting the park to a NASA runway. The taxiway has been fine graded and pouring of the 6-inch base and a final, 16-inch concrete surface is complete.

The state despite two rounds of budget cuts last year preserved $6.5 million to build the taxiway.

The Wallops Island Regional Alliance is among the research park's biggest boosters.

"We're encouraging the growth in there...We've had multiple interested parties attend the meetings," said Bale, adding, "The alliance is very much committed as one of its outreaches to urge the different industry players in technical fields to seriously look at the Wallops Research Park as an opportunity."

There are no announcements of new businesses coming to the research park just yet, but the Wallops Research Park Leadership Council has begun strategic planning for marketing it to potential tenants, according to Accomack County Administrator Steve Miner.

There is a nationwide shortage of ready-to-build sites like what the park offers, Wheatley said.

Supporters hope the timing is right for the newly minted park and its taxiway to attract UAV businesses.

The Federal Aviation Administration in late 2013 awarded Virginia one of six test sites for unmanned aerial vehicle systems. Proposed launch and recover sites for UAV testing under the designation include Wallops.

Wheatley has contacted hundreds of unmanned aerial vehicle businesses from a national list compiled by Kansas State University and received responses from a substantial number.

"This is one of the few times I've seen a nascent industry be birthed in such a way that Virginia could not be poised better to take advantage of it, if we get it right," Virginia Secretary of Technology Karen Jackson said at a symposium on UAVs held last fall at Eastern Shore Community College.

The Association for Unmanned Vehicle Systems International put the total economic impact of UAVs within the first three years of integration into the national airspace at more than $13.6 billion, with more than 70,000 jobs created.

The impact on Virginia could be $342 million by 2025.

"Our goal is simple. We intend to make it easy for the user to come do their work at reasonable cost, without a lot of headaches and importantly, get into the air on schedule. NASA's flexibility in this regard helped to attract Orbital to launch there, and can do the same for UAS activity," said Miner.

Space tourism on the rise

In addition to prospects for space- and aviation-related industry, the region continued to attract more tourists, in part as result of several high-profile rocket launches from Wallops during 2013 and 2014.

The launch of the lunar research mission called LADEE on a Friday night in September 2013, for example, resulted in a 100 percent increase in the number of visitors at the Chincoteague Chamber of Commerce compared to the same day the year before, Executive Director Evelyn Shotwell said.

Lodgings on Chincoteague filled up ahead of the launch, bringing a welcome boost to the resort town's economy after the end of the summer tourist season.

Virginia motels as far south as Exmore, nearly 40 miles away from Wallops, were at or near capacity as space enthusiasts arrived to view the launch.

NASA estimates some 14,000 people viewed the LADEE launch, including 1,400 invited guests, 70 journalists and 50 social media users chosen from hundreds who applied for media credentials.

The NASA Visitor Center had 2,080 visitors that day, more than it had in the entire month of September in recent years.

Additionally, traffic on the Chesapeake Bay Bridge-Tunnel — the southern gateway that leads from the Virginia mainland to the Eastern Shore peninsula — was up more than 16 percent on launch day compared to the same day the year before, and traffic was up 5 to 10 percent in the days just before and after the launch.

LADEE also had a remarkable effect on NASA's social media numbers, according to Rebecca Powell, NASA Wallops Flight Facility web operations chief.

"In terms of social media, the LADEE launch was one of the biggest points of growth for us," said Powell, noting in particular the popularity of a NASA photo of a frog being catapulted into the air as the rocket launched. The photograph later was named one of CNN's top images of 2013.

Activities at Wallops continued to attract attention and visitors in 2014, in particular with test and demonstration flights of the Antares rocket, followed by two successful commercial missions to the International Space Station conducted by Orbital Sciences Corporation.

Chincoteague motels "have seen a dramatic increase in occupancy since the MARS pad became operational and a part of everyday business on the Shore," said Bale.

Tom Derrickson, owner and general manager of the Hampton Inn on Chincoteague, said NASA activities have greatly benefited his business since it began more than 12 years ago.

"In general, the events that have been going on for years at NASA have benefited us, especially in the off-season and the shoulder season," he said.

This time of year, the vast majority of hotel guests, "probably 85 to 90 percent," are there for work related to NASA or other Wallops agencies, Derrickson said.

"NASA itself and everything they are doing has a positive effect on our hotel business —we love them."

Orbital Sciences' Antares project resulted in a big jump in guest numbers from time to time, "but we've always been busy," Derrickson said.

After the failure of an Antares rocket in October, he wondered what the effect would be on his business, but so far he hasn't seen a drop.

Rebounding from a setback

Crowds were are on hand at the usual viewing sites on Oct. 28 when a 13-story Antares rocket carrying a spacecraft loaded with cargo for the International Space Station exploded seconds after liftoff.

The failure broke Orbital Sciences Corporation's string of five previous successful Antares launches from the Mid-Atlantic Regional Spaceport on Wallops Island.

The $200 million mission was supposed to be the third commercial mission of eight planned under a $1.9 billion contract with NASA.

The blast, caused by a failure in a first-stage engine, damaged the spaceport complex in the area immediately around launch pad 0A. A second launch pad for solid-fuel rockets was not damaged.

Orbital quickly announced a plan to move forward, including accelerating the planned introduction of an upgraded rocket using a different engine as well as the purchase of one or two launch vehicles from other companies for upcoming missions.

"All news I have seen on that is positive that their plan will work, and it seems more likely than not that the company will return to flight at Wallops Flight Facility with only one launch in Florida," Miner said.

Repairs to the Wallops complex should allow Orbital's operations to resume there in early 2016, the company said in a release.

Congress in December designated $20 million for spaceport repairs.

"We're very excited by the commitment by both the state and federal government for the reconstruction of the launch facility," Bale said.

"As the nation's only NASA-owned launch site, the Wallops Island Flight Facility is a centerpiece of our space and science infrastructure," Mikulski said after the bill passed. She noted the Antares project brings $250 million in economic development to the Wallops region.

Prospects

The next anticipated big news related to Wallops is about the NASA contract for the next round of commercial cargo missions to the International Space Station, for which Orbital is a competitor.

"With the new engine and a proven record of success, Orbital remains a prime contender for this second round," said Miner.

The contract, if Orbital gets it, would extend its launches from Wallops to 2024.

The announcement is expected in June.

Beyond that could come launches of other payloads, including for private clients, Miner said, noting Orbital "is one of the few American companies poised to grow this business — and they are here."

Those types of missions likely will involve greater integration needs than current launches and therefore could grow industry in the region, he said.

"In short, we are looking at the potential growth of a viable and sustaining launch site for commercial activity well into the future."

cvvaughn@dmg.gannett.com

757-787-1200, ext. 115

On Twitter @cvvaughnESN


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