Starbase, the SpaceX site, is likely Texas’ next city. What happens next?

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McALLEN — Nearly 10 years after SpaceX, Elon Musk’s effort to colonize Mars, began operating in a small community in Cameron County just a few miles inland of the Gulf Coast, employees who live there and other residents will vote next month to incorporate their Starbase community as Texas’ newest city.

If the majority of them vote yes on May 3, the leaders they elect at the same time will have the responsibility of creating a city from the ground up.

What does it take to have a fully functioning city?

A few of Starbase's first steps as a newborn city can be anticipated because state law sets certain requirements for raising and spending public money and how governing bodies can operate.

Texas generally gives municipalities a lot of discretion on how to manage and govern themselves, according to Alan Bojorquez, an attorney who specializes in city governance.

“The reality is, Texas cities under the law are not required to do much," Bojorquez said.

He emphasized that much of what the new city of Starbase will do will ultimately depend on what services and programs city officials and residents want the city to provide.

Day One

Before Starbase can officially incorporate, the election results must be certified by Cameron County. Incorporation will be effective on the day that Cameron County Judge Eddie Treviño enters an order stating the community has incorporated, according to the Texas law.

As a Type C municipality, Starbase will have a commission form of government — a mayor and two commissioners — who will be elected by the voters on the same day they vote to incorporate. Their terms in office last two years unlike the typical four-year terms held by officials in larger cities.

City leaders are required under Texas law to hold elections and public meetings at least once a month. The city is also required to archive records and provide them for public inspection under the Texas Public Information Act.

The mayor will be tasked with running the city’s daily operations, unless voters later approve hiring a city manager. Many Texas cities and towns have a city manager who reports to elected leaders. They have broad responsibilities including hiring and firing other leaders like police and fire chiefs.

Leonardo Olivares, a former city manager to multiple cities in the Rio Grande Valley, including Rio Grande City, Weslaco, La Joya and Palmview, said the city commissioners must set priorities quickly.

“What are the needs of the community in terms of development, commercial, industrial development?” Olivares said.

Cities also need a budget if they want to spend money, which they will have to do if they provide services such as water, sewer, police or fire.

"I think the initial challenge for the first commission of Starbase is going to be to share with the electorate what they are going to be doing," Bojorquez said.

SpaceX leaders have made no secret of their plans to grow Starbase.

In a letter to Treviño, the county’s top elected official, submitted with the petition to incorporate, Starbase Manager Kathryn Lueders wrote that the community wished to incorporate so it could continue to grow.

“Incorporating Starbase will streamline the processes required to build the amenities necessary to make the area a world class place to live—for the hundreds already calling it home, as well as for prospective workers eager to help build humanity’s future in space,” Lueders wrote.

She added that through agreements with the county, SpaceX performs several civil functions such as management of the roads and utilities. They have also established a school and a medical clinic.

Incorporation would allow SpaceX to take over the management of those functions.

The company has already made moves to commercially develop the area as well. SpaceX is building a $15 million shopping center and restaurant there and a $100 million office facility and industrial factory.

Making money

The city has to figure out how to pay for the services it plans to offer.

The major sources of revenue for cities are property taxes and sales taxes. City leaders can approve an initial assessment of property taxes but sales and use taxes must be approved by voters through another election.

There are limits. For property taxes, a Type C city is limited to $1.50 per $100 of valuation, depending on population.

For sales tax, cities are capped at two cents per dollar. They may allocate one cent toward general revenue, up to half a cent may go toward economic development and they could dedicate up to half a cent toward property tax relief.

“There's going to be continual activity out there so I think it's a responsible thing to do — plan for that continued growth,” Olivares said. “You’ve just got to manage it right. You've got to get some good people out there who know what they're doing.”

Company town

In essence, Starbase will be a company town — an idea that evokes the image of early 20th century workers settling down around the coal companies or mills that employ them.

One of the most well-known in Texas is Sugar Land, which was home to sugar plantations beginning in the mid-1800s that later became the Imperial Sugar Company. The city was incorporated in 1959.

Company towns have persisted and the SpaceX employees living in Starbase appear poised to establish the newest one. What they hope to accomplish through incorporation will likely have a lot to do with the company’s activities, Bojorquez said.

“Because this is a project that is closely affiliated with SpaceX, you can imagine that the goals for the municipality are probably in pretty close alignment with the needs of SpaceX," Bojorquez said.

There have already been signs of that, and, at times, those goals were incompatible with the regulations of the county.

While Cameron County officials have welcomed SpaceX — touting investment and job creation — and allowed the company to conduct its operations with seemingly little pushback, there have been instances where the two have been at odds.

In November, SpaceX requested a variance for the county’s lot frontage requirements to maximize what Starbase could build on four available lots at Boca Chica Village, a small residential neighborhood near the SpaceX offices where Elon Musk owns a home.

The hope, a SpaceX engineer told the county commissioners, is that they would be able to recruit more employees to live there. The county, however, denied their request.

In addition to being able to adopt more permissive rules, the city could also gain control over the closure of Boca Chica beach on weekdays for launches.

The Texas Senate approved a bill that would transfer that authority to them from the county, a move that the county judge and the commissioners publicly opposed. The Texas House has yet to vote on the bill, which is needed for the proposal to become law.

Other benefits to becoming a city include the ability to acquire real estate through eminent domain, a process by which governmental bodies can force the transfer of property, for fair market value, if it’s for a public purpose.

Bojorquez said the process is often used to build roads, water infrastructure and drainage.

"I think it's clear in this example that most of the reasons are being provided by SpaceX," Bojorquez said of the possible motivations behind seeking incorporation. "I have no opinion about whether it's right or wrong. It's just unique."

Reporting in the Rio Grande Valley is supported in part by the Methodist Healthcare Ministries of South Texas, Inc.

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