Starbase is launching its own EDC. But doesn’t collect sales tax — yet

The city of Starbase is forming its own economic development corporation to promote industrial development, attract new businesses, encourage business expansion, and grow the local economy. 

On Monday the Starbase City Commission approved the creation of a new EDC with a part-time executive director role expected to become full-time, along with an initial board of directors. 

The city is “seeking a high-velocity executive director to launch and lead its newly formed Type B Economic Development Corporation. This foundational executive role is primarily dedicated to building and operating the EDC as a lean, revenue-generating entity that drives Starbase’s economic growth through public-private partnerships, infrastructure financing, and large-scale development projects.” 

The city is looking for an individual with at least seven years of experience in the field. The salary band is between $150,000 to $190,000 according to the meeting agenda packet. 

The city of Starbase doesn’t collect sales and use taxes but has the authority to impose a local sales and use tax of up to 2%, which would be in addition to the 6.25% state sales tax. This could potentially apply to the value of construction materials used to build out the SpaceX infrastructure, if approved. 

City leaders approved an initial $120,000 budget from the general fund to start the EDC, which is planned to be funded by the issuance of bonds. 

“We are not going to impose sales tax,” Cayetana Polanco, the city of Starbase’s new city administrator, told the Rio Grande Valley Business Journal. “The way this EDC will be mostly funded will be through the issuance of bonds. I think this is the next stage of the city and we’re trying new things.”

Those bonds can also be used to “finance qualifying economic development projects, including industrial facilities, business recruitment, job creation and related infrastructure improvements,” Polanco said.

Mayor Bobby Penden, vice president of Texas Test and Launch for SpaceX, is on the new EDC board. Other board members include local attorney Camille Brown Bagnall, legal counsel for Protocol Labs; Jamin Gallman, senior director of human resources for SpaceX and leader for Ad Astra School; Parker Buntin, whose LinkedIn profile shows he’s a staff materials engineer for Radiant; Albert Traylor, head of product marketing for Aumni; Mercedes Zhang, vice president of Manhattan Venture Partners and Karthik Muthuswamy, medical director for SpaceX. 

Three local residents of the city of Starbase submitted a petition to create the EDC: Brandon J. Conroy, senior environmental regulatory engineer at SpaceX; Anthony Greco, senior engineer at SpaceX; and Cesar Ruvalcaba, director of Starbase IT engineering. 

It’s unclear how the economic development corporation will navigate the dynamic in which nearly all of the commercial, industrial, and retail projects within the city of Starbase so far are on property owned by SpaceX and are not open to the public.