What happened: Midland City Council voted unanimously on Tuesday, July 21, to approve the Midland Development Corporation’s (MDC) performance-based economic development agreement with AST SpaceMobile. The vote gave final approval to a deal that could pay the satellite manufacturer up to $66 million over 30 years if it builds and staffs a 400,000-square-foot manufacturing facility at the Midland Spaceport Business Park.

Council’s vote came after the MDC board unanimously approved the agreement on Monday, July 20. In a separate unanimous vote Tuesday, council also approved the ground lease that allows AST to construct the facility on roughly 23 acres of city-owned airport property. You can read The Permian Press’ complete breakdown of the agreement and its terms here.

Why it matters: Council members said the votes conclude years of negotiations between Midland officials and AST. If the company meets every hiring, payroll, and investment milestone set in the full build-out of the agreement, the project would create 1,800 jobs, $144 million in annual payroll, and at least $150 million in taxable capital investment.

AST receives no money up front. They only earn payments after verified annual performance milestones, and the agreement includes clawbacks if the company later falls short or stops operating in Midland.

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“Incentives are earned, not guaranteed,” MDC Executive Director Sara Harris told the MDC board Monday.

The big picture: Several council members said the protections negotiated into the final agreement ultimately convinced them the project balanced opportunity with taxpayer protection. Councilwoman Amy Burkes said additional negotiating time resulted in stronger clawback provisions and a cessation-of-operations clause that changed her position on the project.

“That is why I now can support this,” Burkes said.

AST must repay 100% of incentives received if it permanently ceases operations in Midland within the first two years. That repayment obligation declines over the following eight years and would continue to apply if another company acquires AST and the Midland operation later shuts down. Because the facility will sit on city-owned land, ownership of the building would also revert to the city if AST abandoned the project.

The final agreement also added a new annual performance floor. If AST achieves less than 60% of that year’s required jobs, payroll or investment targets, it earns no incentive payment for that year. Councilman Jack Ladd also highlighted the taxpayer protections included in the deal.

“If that [$66 million] got paid out, that would mean this project was a massive success,” Ladd said. “They have to have $140 million in annual payroll. This is every year. If they fail to do it, we claw it back, they lose their incentives.”

Go deeper: Mayor Lori Blong said the council’s responsibility was to mitigate risk and to negotiate an agreement that adequately protected taxpayers.

“I’m proud to move forward with that, knowing that we have negotiated a deal that works for the Midland taxpayers and Midland residents,” Blong said. “Also with the hope that this goes forward and exceeds all of our expectations, and I think that it very well has every opportunity to do that.”

Councilman John Burkholder agreed with some residents’ belief that incentive agreements give certain companies an unfair advantage. Still, he said Midland must compete with other cities that use economic development incentives to recruit employers.

“The balance is ensuring that we focus those [economic development] dollars on businesses that diversify our industry, add jobs and focus on developing infrastructure for growth,” Burkholder said. “We are in a competitive battle with the rest of the state and the country.”

Councilman John Norman said he hopes the project also exposes Midland students to career opportunities beyond the oil and gas industry.

“Because we grew up knowing oil and gas,” Norman said. “I think that diversification is very much needed and very important, especially for the youth of our community.”

Councilwoman Robin Poole addressed public comments questioning whether commercial space is still too young an industry for public investment, saying, “uncertainty and irresponsibility are not the same thing.”

“Every [MDC] deal deserves tough questions, and every deal should have to prove itself on its own merits, and I believe this one does by leaps and bounds,” Poole said. “The question is whether we have negotiated a responsible agreement that protects taxpayers and creates a meaningful opportunity for the people of Midland, and again, I believe we’ve done that.”

What’s next: According to the terms of the AST deal, construction on the facility must begin by March 2027, and the plant must be substantially complete by March 2029. The first performance test and the first possible incentive payment come after AST certifies its 2027 job numbers, with an independent CPA’s verification behind every annual certification.