Starbase borrows $1.5 million from SpaceX

STARBASE, Texas (ValleyCentral) — The city of Starbase finalized plans to borrow about $1.5 million from SpaceX on Monday.

Under the agreement, Starbase will borrow about $1.5 million from SpaceX at 0% interest. The city plans to pay SpaceX back in 2026, when Starbase will collect property taxes for the first time.

“The main purpose of this note is to finance a portion of the budget that we have just approved all the way through Sept. 30, 2025,” said Andre Ayala, a managing director at Dallas-based Hilltop Securities, the city’s financial adviser.

Voters created Starbase in May.

Most cities in Texas collect property taxes, which cover the cost of public services.

“In our case, we don’t have any property tax revenues because we have not adopted a tax rate. That, again, will be adopted this September,” City Manager Kent Myers told the City Commission during a meeting on Monday. “So we don’t have any property tax revenues to live on for the next five months.”

Sales tax is another important source of revenue for local governments.

“We also do not have a local sales tax,” Myers said.

Without a sales tax or a property tax, the city’s revenue would be limited to development fees, permits and small amounts of miscellaneous money.

That left Starbase with $512,000 for operating expenses.

Starbase, though, wanted to spend about $1.9 million between May and September.

The budget included about $1 million for general government expenses and nearly $867,000 for law enforcement.

To balance the budget, Starbase decided to borrow about $1.5 million from SpaceX. The City Commission finalized the details during a meeting on Monday.

Ayala, the city’s financial adviser, walked the City Commission through the process.

Starbase would borrow $1,528,000 at 0% interest by issuing a tax revenue anticipation note.

SpaceX would buy the debt in a deal called a “direct placement.”

Starbase would receive $1,500,652. The remaining $27,348 would cover financing costs.

The city plans to pay SpaceX back in 2026, when Starbase collects property taxes for the first time.

Ayala said the city had an estimated tax base of about $855 million.

Based on that amount, Starbase would need to adopt a property tax rate of 17.87 cents per $100 of taxable assessed valuation to pay SpaceX back, Ayala said.

That would add $178.70 to the bill for a home valued at $100,000. Exemptions and other factors may affect the amount paid by individual property owners.