Florida's space economy threatened by shuttle's end

MIAMI (Reuters) - At El Leoncita Cuban & Mexican Restaurant near the Kennedy Space Center on Florida’s “space” coast, a bar sign says it all:

“No happy hour on launch days.”

Business from tourists is so strong that when a U.S. space shuttle blasts off a drinks promotion is never needed. Throngs waiting for their margaritas snake out into the Titusville eatery’s parking lot, according to owner Miguel Sanchez.

“It’s the busiest day of the year -- crowded, crowded,” Sanchez said.

But like other local business operators, as well as policymakers, Sanchez worries sales will drop and jobs will be lost as Florida’s signature, half-century-old space economy risks being eclipsed by the end of the space shuttle program.

The federal government’s space shuttle program, which is so much part of state lore that Floridians voted to depict the winged space vehicle on a 2004 commemorative quarter coin, now has just a few missions left before winding down in 2010 after 29 years of flights.

And there is no clear replacement for what is an important driver of the fourth most-populous U.S. state’s economy, as the Obama administration is debating a new U.S. manned-space program that would at best be many years away from new launches.

Florida’s economy has been especially hard hit by recession. U.S. state and local governments are sapped by budget deficits, while fledgling private-sector efforts to carry Americans into space for fat fees appear to be nowhere near getting traction.

“The private space programs are not taking off,” said Dr Hank Fishkind, an economist at Fishkind & Associates in Orlando. “And (the state’s) space agency does not have the votes nor money to be supportive.”

But on Monday, in California, billionaire Richard Branson unveiled a small passenger spaceship aimed at creating a commercial space tourism industry. Virgin Galactic, an offshoot of Virgin Atlantic Airways , hopes the craft will carry tourists into zero gravity beginning in two or three years.

BRAIN DRAIN

The average annual salary at Kennedy Space Center, the shuttle’s ocean-side launch site that draws crowds the size of rock concerts for blastoffs, is $77,235, or double that of the typical worker in surrounding Brevard County.

When the shuttle program ends, analysts said, as many as 8,000 contractors and other space workers could be let go.

“Nobody wants to lose that many high-paying local jobs,” Fishkind said. “It has terrible effects on that local economy; it will affect the space program. Those skills go away.”

Another Titusville restaurant owner, Laurilee Thompson, said economic fallout from the shuttle’s end could be as severe as 1975, when local unemployment shot up to Depression-era levels after the end of the Apollo moon launches.

“When the shuttle program ends, it’s going to take a big chunk out of our gross every year.” said Thompson, whose Dixie Crossroads Seafood Restaurant is renowned for serving sweet, but hard-to-peel, rock shrimp.

The Dixie’s sales typically double or triple on shuttle launch days, she said, adding that downsizing the shuttle’s large workforce will be as severe a blow to her business as the dwindling of launch-day tourists.

“The shuttle is kind of like rock shrimp. It’s really labor intensive,” she said. “The shuttle takes a tremendous workforce to keep it operational. ... Even when the next generation spacecraft gets here, it’s only going to take about a third of the workforce to maintain it that the shuttle does.”

APPLES AND ORANGES

The rest of Florida, whose large economy and 18.3 million people are strikingly reliant on tourism and housing, also gets a meaningful lift from America’s space programs that put the first people on the moon four decades ago.

During the 2008 fiscal year, NASA activities generated $4.1 billion in overall economic benefits for the state, including $2.1 billion in household income, and 40,802 jobs, according to a state study.

NASA last year spent $1.8 billion in Brevard, where 93 percent of the space center’s 15,000 workers live. The space shuttle also drove much of the county’s fast population growth over the last three decades.

Wall Street credit-rating agencies worry about the fallout on Brevard from the space shuttle’s end. Fitch Ratings warned it may downgrade some county revenue bonds partly because of the impending layoffs at the space center.

Government officials acknowledge the state’s space economy will never be the same, even if the federal government goes ahead with a proposed new manned space program that the head of a presidential panel has said was fatally flawed.

“There is no escaping the transition that will occur when we go from a very labor intensive, reusable space flight system to one that is expendable,” Frank DiBello, head of Space Florida, a state agency. “Simply by its nature, it is going to take a smaller workforce.”

DiBello said in an interview that the state government wanted to diversify beyond space launches into other areas of aerospace, as well as energy, agriculture and biotechnology.

“Florida has now a nice foothold in those areas, but we want to accelerate growth,” DiBello said. “What we need to do is diversify the number or areas we can apply that workforce to a broader array of applications.”

“Essentially, we’re going to replace a watermelon-size volume of activity with a lot of apples and oranges ...,” he said. “We’re concentrating on a very aggressive business development program to create 300, 400, 200 jobs at a time.”

Yet, on the space coast, economic anxiety is displayed on checkout counters, where customers are encouraged to pick up and sign pre-typed letters to President Obama that implore him to make good on campaign promises to back the space program.

The letter-writing campaign and a website, www.savespace.us, are part of a movement by local residents to make space programs a U.S. budget priority.