Silicon Valley On The Beach
What do Amazon’s Jeff Bezos, Tesla’s Elon Musk and Lockheed Martin all have in common? They, along with a dozen or so aerospace and defense companies, are investing in the Florida Space Coast and/or Melbourne, Florida, as a launch point to advance their missions in space. It’s not surprising that this investment activity is fit to elevate Melbourne as the anchor city of economic growth in the region.
And there’s good reason they are investing in this picturesque beach community as a gateway to space. Close to the equator where the Earth spins most quickly, the location enables rockets to maximize “escape velocity,” making Florida’s Space Coast a top location for rocket launches even before it served as the site of Apollo 11’s blastoff to the moon in 1969. Today, the area is experiencing a major revitalization driven by “new space” private investments.
As Bezos said at a symposium in September 2018, his aerospace company, Blue Origin, already has poured about $1 billion into the Space Coast to build a massive rocket factory near Kennedy Space Center, a popular tourist destination. With the help of a $500 million contract awarded by the U.S. Air Force, the company is investing another billion dollars in 2019 toward the development of New Glenn, a heavy-lift launch vehicle designed to transport satellites and, eventually, people into orbit.
Meanwhile, Musk’s SpaceX made international headlines in February 2018 with the maiden flight of Falcon Heavy, a heavy-thrust reusable vehicle that is taking the billionaire one step closer to his mission to transport humans to Mars. More recently, SpaceX was in the news for sending up India’s first private satellite, ExseedSAT-1, a one-kilogram satellite developed in Mumbai and integrated in Hyderabad, aboard a Falcon 9.
Lockheed Martin’s space sector just landed a $7.2 billion deal from the U.S. Air Force to build its GPS III satellite, the first in a new generation of GPS navigation stations with improved services and longer lifetimes. As a result of this work with the government, Lockheed Martin is seeking to fill 1,000 job openings for its offices in Orlando, Melbourne, Cape Canaveral, and Titusville.
Also taking off in the Space Coast: the manufacturing of small satellites, an emerging niche market as the world becomes dependent on them for internet of things-based services (think Amazon’s Echo devices). In just two years, Melbourne-based Harris Corp.’s small satellite revenues jumped from zero to $100 million, according to SpaceNews.
With all the amazing job opportunities these projects are generating, it’s no wonder why USA Today is calling the Space Coast the “next Silicon Valley,” attracting millennial scientists and engineers eager to be a part of the next big thing. The dynamic changes in the area also are pushing up hotel demand, especially in the underserved market of Melbourne, where the city council unanimously approved plans to develop a 156-room property by Hilton. A part of the Hilton’s Tapestry Collection, an upscale boutique brand known for its unique style and personality, the property is slated to open in early 2020 and will be Melbourne’s first hotel in the downtown neighborhood and one of its key attractions.
At 11 stories high, this Hilton property will become the city’s tallest building and boast incredible city and water views from its indoor-outdoor rooftop lounge. Located just two miles away from the Orlando-Melbourne International Airport, the hotel also will be perfectly situated to welcome high-profile corporate Silicon Valley On The Beach Business Lifts Off Across Florida’s Space Coast guests visiting the Space Coast on business as well as leisure travelers coming to enjoy the Florida beaches and tourism activities.
As an incentive for the Hilton project, the city of Melbourne is securing a $2 million U.S. Housing and Urban Development loan and will give the developer, Willow Street Capital, more than $800,000 in property-tax reimbursement over a 20-year span. The city also sold Willow Street Capital the .6-acre plot of land for $500,000, well below market value.
Attracting foreign investors, the construction of the hotel is a qualified EB-5 visa project, sponsored by The LCP Group, L.P., a real estate investment firm that specializes in the development and acquisition of premium branded select- and full-service hospitality properties throughout the United States.
“Unlike traditional EB-5 projects where investors receive a de minimis fixed return with no upside potential, this particular EB-5 opportunity gives investors the advantage of sharing in the benefits of the project’s success, which will be realized after the sale targeted for year five,”
– Francis Lively, Chief Executive Officer and President of The LCP Group
According to a feasibility study conducted by the leading hotel consulting firm HVS, this is a high-yield opportunity in which investors can double the amount of their investment.
The Hilton project along with others in the area — including the $30 million, eight-story Highline apartment complex and the 11-acre Hidden Harbor Estates gated community along the Eau Gallie River — certainly will raise the value of real estate in Melbourne. But the city’s already a desirable location, with U.S. News & World Report ranking Melbourne as the 29th “best place to live” in the U.S. out of 125 locations. One big selling point: its low cost of living. Compared to Silicon Valley’s Palo Alto, where homes average over $3 million, the median price of a house in Melbourne is $189,000, according to Zillow. Plus, Florida has no state income tax, whereas California has the highest rate in the United States.
Florida also is a very business-friendly state. The Tax Foundation just ranked it as having the fourth best business tax climate in the country and it is seventh on Forbes’ “Best States for Business” list.
But the cherry on top is the Florida sunshine. With temperatures rarely dipping below 70 degrees Fahrenheit in Melbourne, residents there can enjoy an active outdoor lifestyle filled with golf, tennis, kayaking and deep-sea fishing. Pristine beaches stretch along the Space Coast’s Indian River Lagoon, which boasts one of the most biodiverse estuaries in the Northern Hemisphere. And there is always some cool art exhibit or cultural event to catch in the revitalized Eau Gallie Arts District, bringing a youthful vibrancy to the community.
And that community overall has a strong Indian presence. According to the Indian Association of the Space Coast, an organization that began in 1991 to promote the rich cultural heritage of India, about 1,000 families from India have settled in the area.
“With all that it has going for it, the Space Coast is clearly primed to rise as a technology and innovation leader in the State of Florida and nationally,” said Lively of LPC Group. “We are excited to be contributing to the economic growth in the area and are seeing a huge demand from foreign investors seeking to participate in our hotel development.”
