SpaceX is giving Brownsville $220M for water projects. In exchange, the city gave up zoning control of 444 acres near Starbase

Brownsville commissioners approved two high-stakes deals with SpaceX after a 6-hour-long raucous municipal meeting that included two executive sessions and stretched into Saturday night. 

The first deal is a memorandum of understanding described to the public as a binding contract that a SpaceX vice president of legal and regulatory affairs agreed to sign on Saturday after the meeting to get the process started for the rocket-launching company to donate $220 million for regional water projects. 

The second deal, which SpaceX described as an interconnected agreement but was a separate city commission vote, was to remove a 444-acre plot of land from the city of Brownsville’s zoning jurisdiction to disannex privately owned property. 

Collectively, the deals are known as Project Quantum, an effort supported by the Brownsville Economic Development Corporation, which testified in favor of the projects. Brownsville EDC estimates SpaceX has invested more than $3.2 billion since 2014 and employs nearly 5,000 people. Brownsville EDC top executive Gilbert Salinas called the project a chance that comes once in a hundred years. 

The plan is for the city of Starbase to annex the same 444-acre property, which Brownsville agreed to relinquish on Saturday, into its city limits in the coming months as part of a larger annexation play that would enable the new city to grow to more than 7,000 acres. 

SpaceX is purchasing not just land; it sought to disannex from the city of Brownsville to be later annexed by the city of Starbase, but it intends to keep some of the property within Brownsville city limits — the section heading south of Boca Chica Boulevard towards the Rio Grande River. That land is expected to be converted into an industrial park for its vendors, which could generate economic development for Brownsville’s coffers, officials said during the meeting. 

The city of Starbase is undertaking its own annexation process, which is expected to include public hearings in September and would add thousands more acres to its jurisdiction, some of which are for environmental mitigation efforts as offsets. 

Elon Musk’s company SpaceX near Boca Chica Beach in South Texas is now the site of a new municipality known as Starbase, led by SpaceX executives. SpaceX is an increasingly large and powerful landowner in Cameron County. Musk’s business philosophy is to avoid regulatory oversight and move forward with as much unfettered access as possible, using engineers to produce whatever product is on the roadmap. 

As such, Musk’s track record of government oversight is to seek as much control over zoning, taxes, bonds, and access to land as possible for the company’s self-described mission to send people in massive reusable rockets to the Moon, then Mars, and an effort funded with federal taxpayer dollars as an alternative to NASA. 

In the last year, Musk has taken SpaceX public, combined several portfolio companies into one, launched dozens of satellites for the Starlink network, cashed out longtime employees, and invested deeply into Texas, California, Florida, and now Louisiana. 

Brownsville Commissioners voted Saturday night unanimously in favor of both the disannexation and the $220 million regional water project donation. 

The decision drew criticism from local environmental activists and concerned residents over a last-minute deal, while economic development leaders and board members from the Brownsville Public Utilities Board and Southmost Regional Water Authority offered context about how the investment in planned water projects could save ratepayers money in the future. 

Brownsville commissioners said they received SpaceX’s offer of the money as a grant during the public meeting on Saturday, just after dozens of residents spoke against the disannexation deal on the agenda, which offered leaders little time to review the contract. 

Officials had expected to review a disannexation request by SpaceX and were aware of the company’s interest in funding water projects, but had not gotten a copy of the contract until Saturday night. 

A SpaceX official declined commissioners’ requests to delay the water deal and annexation decision vote by 72 hours, or even longer until the regular work week. 

SpaceX representatives also refused an in-person interview request for this news story and asked for questions in writing. The Rio Grande Valley Business Journal provided those questions immediately, and the company has not yet responded. 

Representatives of the Starbase EDC attended the meeting as well, and a local Brownsville-native-turned-SpaceX-executive testified in the company’s favor of the proposed deals. 

The hours-long public meeting included jeering and cheering for and against SpaceX. Brownsville police escorted one Starbase supporter out of the room, as they did with several environmental activists and protesters for disrupting the public meeting with outcry and grandstanding over the six hours. 

Some residents, such as retired local executive Rosemary Martinez, were most concerned about the speed of the decision and lack of transparency by government officials during the process with a heavyweight corporation. 

“I’ve always advocated for Brownsville to have a more comprehensive master plan for development of our community, for more coordination between the city and the Port of Brownsville, which is driving a lot of it,” Martinez said. “Right now, everyone is working in silos. So we’re finding out by accident and everything is so quick. You wonder what is driving these timelines.” 

SpaceX has land under contract scheduled to close next week, slated to be purchased from a cohort of landowners — 28 in total — for an undisclosed price, officials told city commissioners. 

The deal for the $220 million investment — which would not only have paid for previously planned water infrastructure improvements but also increased water supply and potentially saved $4,000 per ratepayer — was pushed through to meet SpaceX’s tight deadlines. 

“We worked really hard all week with your staff. We think that it’s a really good deal. We’ve partnered with BPUB in the past to extend the [water] pipeline along State Highway 4 and wastewater back, so we have a really good working relationship with them,” attorney Sheila McCorkle, SpaceX’s vice president of Starship Legal and Regulatory, told commissioners. “But this needs to be done today. We’re just out of time on our side.” 

SpaceX is now under contract to donate $220 million to Brownsville, which will be delivered in installments and deposited into an escrow account starting with $40 million due within 30 days of Aug. 29 because the contract was presumably signed after the meeting. The rest of the $180 million is expected to be paid over six installments of $30 million each. SpaceX does not receive any ownership stake or pre-payment of its water bill as part of the deal, but the money must be spent on the regional water projects within the first year. 

“This land is tucked between the landfill and the port and other industrial activities, and the reason we’re seeking to expand is that we have key operations that would take advantage of the shipping channel and port operations. The reason we’re asking to expand it, is because there’s no services provided by the city in this area,” McCorkle said. “In partnership with the city of Brownsville, we could bring these services online to further our economy. We thought deeply about what we could do to make sure that we give back to the greater Brownsville community, and water is something that we think of as liquid gold. It will support businesses and will allow for more jobs and economic growth in the region — much beyond what SpaceX is doing.” 

But what exactly SpaceX will do with the property remains unclear. 

There are more than 5,000 people who work at SpaceX at Starbase near Brownsville each day, and 70% of its workforce are those who are born and raised in Brownsville and the surrounding area, company representatives said Saturday.  

“We’re super proud to be here and want to continue that investment,” McCorkle said. 

SpaceX is the “unnamed industrial customer” that is the fourth-largest water consumer in the Brownsville Public Utilities Board’s portfolio. In 2025, the company used 37 million gallons of water, which costs upwards of $660,000.

Joseph Hollmann, who holds a PhD in electrical engineering, is a board member of the Brownsville Public Utilities Board and president of the Board of Directors of the Southmost Regional Water Authority. 

Hollmann said that he recognized the city’s decision was “difficult” and wanted to be supportive.

“This is transformational,” Hollmann said. “This allows us to reduce our dependence on the river significantly. I know that people are worried about water and electricity.”

The plan is to release effluent water from the brackish groundwater desalination plant back into the bay to help restore the wetlands because it has less salinity than the ocean. 

“The thing that we’ve been trying to do is not the design; we have an idea about how we want to do it. It’s more that, oh my goodness, it’s extremely expensive and we don’t want to put this on our local ratepayers,” Hollmann said. “A lot of what Texas has is low-interest or zero-interest loans. We didn’t want to go that route.” 

The Brownsville Public Utilities Board was already planning an 8 million gallon-per-day water reuse project that includes a 36-inch pipeline connecting the Robindale Wastewater Treatment Plant to the Resaca de la Guerra. 

Plus, the Southmost Regional Water Authority, of which the Brownsville Public Utilities Board owns a slice, operates a brackish water desalination plant with capacity up to 7.5 million gallons of water each day. The Brownsville utility was already planning on expanding the plant up to 10 million gallons per day by drilling new wells into the aquifer. Tentative long-term plans included Brownsville’s goal to increase that to 20 million gallons per day of brackish desalination into potable water. 

But cost has been the barrier. 

The brackish water desalination project, which would increase capacity from 7.5 million gallons per day to 10 million, would cost $46 million, at least, because it requires constructing at least two new wells. The 20 million gallons per day upgrade could cost $202 million because it would require 20 new water wells. 

The wastewater reuse project did receive a $12.7 million grant from the Texas Water Development Board in February 2026 and is expected to be completed by 2030. But the total cost of the project is $40 million, which means the Brownsville Public Utilities Board, a nonprofit organization, would have to take out a low-interest loan or seek other grants to fill the funding gap. 

Blanca Campbell, legal and compliance analyst at SpaceX in Brownsville, testified during public comment in favor of the disannexation request, saying that the company has been an inspiration to local children who can now see rockets rise into the sky in their own backyard. 

“They have seen what it means when significant work takes place in the community that raised us,” Campbell said. “I consider myself fortunate to share in that moment.” 

Lemy Sanchez, a member of Valley Interfaith and other activist groups, said that she’s not against economic development efforts but worries that there’s not enough participation from the local skilled workforce for these jobs — even after a decade of possibly developing workforce training programs. 

“Let’s stop promising jobs that they [local training programs] cannot fill,” Sanchez said. “When SpaceX first came, some people were for it, and there were a lot of promises made. But it’s been a decade, and those promises have not been kept, specifically jobs, technical jobs. The students [still] don’t have the skills or the experience, and they had 10 years to build this gap.”