SpaceX to lease UL Lafayette property on Pecan Island before buying it

The University of Louisiana System Board of Supervisors has approved a lease agreement that would allow SpaceX to access UL Lafayette-owned property at minimal cost ahead of an anticipated purchase. 

The deal involves 5 acres of university property that was once the site of Pecan Island High School. The school closed after damage from Hurricane Rita in 2005. UL-Lafayette obtained the property through a donation last year and has leased the property to an affiliated nonprofit for $1 per year. The organization would then sublease the property to SpaceX in exchange for improvements to the property and buildings on it. 

The promised improvements are detailed in an attachment to the sublease agreement the UL System did not include when it provided the contract to board members ahead of Thursday’s meeting. The Illuminator asked for the attachment and was directed to file a public records request, which the system has not responded to yet.  

The lease comes as SpaceX moves forward with a $100 billion launch facility on Pecan Island, in Vermilion Parish, called Starbase Louisiana.

SpaceX is being offered low-cost rent as UL Lafayette faces ongoing budget issues that have led to staff layoffs and other austerity measures, including faculty being prevented from using promised funds and traveling to present their research. 

The campus chapter of the American Association of University Professors called out system leaders on its Facebook page this week ahead of the meeting. 

“How does [the lease] fit with goals for raising revenues and closing the budget gap?” the post reads. 

The lease includes a provision that could result in some level of compensation for the university. If the improvements are delayed, SpaceX would have to pay a fair-market rental rate for the property. 

The Vermilion Parish assessor’s website lists the value of the parcel for tax year 2027 at more than $340,000, or roughly $72,000 per acre. The undeveloped property just to the west is valued at $152 per acre.

The lease allows Space X to use the property for: 

• business and administrative offices
• engineering, scientific and research activity
• residential lodging, dormitory and housing for personnel, contractors and guests
• dining and recreational facilities
• training and workforce-development uses
• warehousing, staging, laydown and storage
• parking, maintenance and fueling of vehicles and equipment
• fabrication, assembly, testing and light industrial operations
• communications, antenna, satellite and information-technology facilities
• standby and emergency power generation and associated fuel storage
• security and access-control facilities
• construction, installation, operation, maintenance, repair, replacement, demolition and removal of any of the above 

“This structure of the transaction and ultimately the sale is consistent with the board procedures for lease and our sales,” Chris Herring, the UL System’s vice president for facilities, capital planning and development, told the board. “University stands to receive either fair market value in rents if the project is delayed or the proceeds from the sale once conducted later next year.” 

The lease will “facilitate the development of Starbase Louisiana and support the educational, research, workforce development and public-service missions of” the university, according to the document. 

Details on the sale were not included in the documents.