ULA rockets for Amazon will mean $337.75 million investment, 251 jobs at 3 companies locally
Aug. 19—United Launch Alliance's Decatur plant will help fill the largest order in space exploration history by building rockets to deploy Amazon's planned system of internet satellites, and the effort will require investments here of $337.75 million and create 251 jobs at three companies.
"To have a next-generation rocket produced right here is unbelievable," said Jeremy Nails, president and CEO of the Morgan County Economic Development Association. "They're made from parts made in this area, and that is cool."
ULA will make the largest portion of the local investment, $317 million, according to information presented Thursday to the Industrial Development Board of Decatur in applications for tax abatements.
The investment by ULA would go toward its own new equipment, infrastructure and building as well as construction of a building at its 1001 Red Hat Road property for Switzerland-headquartered Beyond Gravity, which formerly was named RUAG. ULA would create approximately 51 jobs within three years, and Beyond Gravity would create 150.
As part of the project, M&J Industries and its related company would invest $20.75 million to equip three buildings and construct a new one. M&J would add an estimated 50 new employees in two years.
Amazon says it plans to launch a constellation of 3,236 low-earth orbit satellites in Project Kuiper to provide "fast, affordable broadband to unserved and underserved communities" worldwide.
The tech giant said earlier this year it secured 83 launches from ULA, Arianespace and Blue Origin for the program. ULA would make 38 of those launches on its Vulcan Centaur rocket, which remains in development. Amazon has said that agreement is in addition to an existing contract for nine launches on Atlas V vehicles from ULA to help deploy the Project Kuiper constellation.
Decatur Mayor Tab Bowling told IDB that the total Amazon order requires ULA to produce 47 rockets "and they're going to be made right here in Decatur."
The IDB approved an estimated $17.46 million in abatements for ULA's planned projects.
John Elbon, ULA's chief operating officer, said the project, which is scheduled to begin on or before Sept. 1 and be completed April 1, 2026, will double the company's launch rate.
"That is going to extend our longevity (in Decatur) until long after we retire and we're out hunting or fishing," Elbon said. "The constellation will change the world and bring Wi-Fi to areas that have never had it before."
Elbon said his company is going through a transition. It is moving away from its Delta IV family of rockets and the Atlas V as it readies the Vulcan Centaur.
This transition initially meant a possible reduction in force, but the Amazon project "protects several hundred jobs," he said.
Nails said there are a number of companies that locate and operate in this area because of ULA.
"Just that multiplier effect is something people don't understand," Nails said.
Bowling, formerly an account representative in the sales of industrial and safety products, said a $317 million project contract will also create a lot of commissions for local sales representatives that will allow them to spend and create tax revenue in the city.
"Those aren't abated," Bowling said.
Darren Drinkwater, ULA director of production operations, said the project includes three new buildings at its site in Decatur's police jurisdiction. These include a 190,000-square-foot building designed for receiving, and a building for finished rockets that's being designed and is expected to be about 85,000 square feet.
The third building will be 280,0000 square feet for Beyond Gravity, which is also located on United Launch's 300-acre site of Red Hat Road.
IDB attorney Barney Lovelace said the 51 additional jobs at ULA, which currently has 742 employees at its Decatur plant, would have an estimated average annual wage of $75,000 a year, not including benefits.
M&J Vice President Carlton Guyse said ULA has been a key part of the company's growth from a heaving machining company to precision machining in the space and aerospace industries.
This is the third time in four years for M&J to receive an abatement for a new expansion from Decatur, Morgan County and the state. The last abatement was to grow the company to 55 jobs, but it's now up to 62.
"We have a strong relationship with ULA," Guyse said. "What a cool thing it is to go home and say we build rockets that are going to space to protect the country with payloads and revolutionize communications across the world."
The 50 new jobs at M&J would have an estimated annual income of $70,000, not including benefits. The pay for the 150 jobs created at Beyond Gravity wasn't provided.
M&J's investment would be to improve its two buildings on Beltline Road Northwest and construct a new building at 313 Beltline Road N.W. for its subsidiary, Precision Commercial Properties. The improvements also would include the purchase of new precision machinery for its operations.
The M&J project is expected to begin in September and be completed by June 1, 2024. — Breakdown of abatements
—The IDB agreed to abate $8.83 million in non-educational state and Morgan County property taxes for ULA over 10 years, $5.85 million in state sales and use taxes during the period of capital investment and $2.78 million in city of Decatur sales and use taxes during the investment period.
The ULA project would create new property taxes of $10.26 million over 10 years for the state, Decatur, Morgan County and Hartselle school systems. It would create $4.05 million in sales and use taxes during the investment period for the Decatur, Hartselle and Morgan County school systems.
—The Precision Commercial Properties portion of the M&J investment will be $4.05 million. For that project, the IDB approved abatements of $164,450 in property taxes over 10 years, $88,800 in state sales and use taxes during the period of capital investment and $66,600 in city of Decatur sales and use tax.
The project would create new property taxes of $202,500 over 10 years for the state, Decatur, Morgan County and Hartselle school systems. It would create $22,200 in sales and use taxes during the investment period for the Decatur, Hartselle and Morgan County school systems.
—For the other $16.7 million of M&J's $20.75 million investment, the IDB approved abatements of $464,500 in property taxes over 10 years, $274,000 in state sales and use taxes during the capital investment period and $206,100 in in city of Decatur sales and use taxes.
The project would create new property taxes of $572,000 over 10 years for the state, Decatur, Morgan County and Hartselle school systems. It would create $68,700 in sales and use taxes during the investment period for the Decatur, Morgan County and Hartselle school systems.
— firstname.lastname@example.org or 256-340-2432. Twitter @DD_BayneHughes.