A Tale of Two CITEs

Last week, a tourist stopped in to the Hobbs Chamber of Commerce looking for a local attraction: a "ghost town" used to test futuristic technologies.

Chamber of Commerce employee Tiffany Bishop had disappointing news for the visitor: The ghost town doesn't exist—yet. But on April 3, the Center for Innovation, Testing and Evaluation took a big step closer to fruition. After originally considering locations in either northern New Mexico or near Las Cruces, the project's designer, Pegasus Global Holdings, has scrapped the Santa Fe/Albuquerque corridor option in favor of a potential site near Hobbs. With Pegasus filing lease applications with the New Mexico State Land Office earlier this month, the project appears to be going forward despite lingering questions about its viability.

Pegasus Global Holdings is known for its defense contract work, mostly in telecommunications. It is based in Washington, DC and Reston, VA, and has a subsidiary in London. CEO Robert Brumley was a policy advisor to the Secretary of Commerce under former president Ronald Reagan.

Pegasus' efforts to establish itself in New Mexico began inauspiciously. As former New Mexico Economic Development Department Secretary Fred Mondragon told SFR last fall, when Pegasus approached the state during former Gov. Bill Richardson's administration, EDD had serious doubts that the company had any of the investors or partnerships it would need to accomplish the proposed testing. Pegasus also wanted the state to pay $5 million for its feasibility study and $20 million per year for 20 years to lease testing space from CITE.

EDD didn't bite.

Under current Gov. Susana Martinez, however, Pegasus' luck changed. Last August, the state signed a memorandum of understanding with Pegasus, agreeing to give the company non-financial assistance to develop the CITE project. Now the State Land Office is getting in on the action, and may lease land to Pegasus for the project.

Representatives from both Las Cruces and Hobbs say they'd welcome the development.

"We'd love to see it come to Doña Ana County," says Eric Montgomery, business development manager at Mesilla Valley Economic Development Alliance in Las Cruces. Montgomery describes the site as an area of state trust land west of Las Cruces, just outside city limits. Doña Ana would welcome the jobs CITE would bring to the area, Montgomery says—though he's hard-pressed to say just what jobs they would be.

"Because [CITE would have] so many different operations and so many different approaches, it's hard to say the specific opportunities [that] are going to blossom from this," Montgomery says.

Montgomery also tells SFR that, to his knowledge, Pegasus has not assured the county that it will hire a certain number of people locally.

Lisa Hardison, president and CEO of the Economic Development Corporation of Lea County, says she believes Pegasus will bring "technical and administrative" jobs to the area.

Although Pegasus' own literature states that the $200 million project would create 3,500 jobs, it adds that all but 350 of those are "indirect"—temporary construction jobs and project work for scientists coming in to use the site. Pegasus' agreement with EDD states that the company may test energy, transportation, communication, resource development and security technology at CITE. Pegasus spokeswoman Alarie Ray-Garcia (a former spokeswoman for Gov. Richardson) says Pegasus is "still in the process of identifying potential customers" and can't give more detailed information about its plans.

If Pegasus opts for the Las Cruces site, the Land Office could reap the benefit, using Pegasus' lease payments to supplement the land grant income fund, which helps fund New Mexico's public schools. But the Hobbs site, according to an employee at the Lea County EDC, includes mostly private and county land.

Either way, Hobbs expects a decision from Pegasus within the next 30-40 days. The employee notes that the Hobbs area lacks the presence of environmental activism that pervades the original Santa Fe/Albuquerque potential site, so perhaps the project would meet less resistance.

State Land Commissioner Ray Powell does have to consider the impact to any state land leased for such a project, however, notes Bruce Frederick, staff attorney with the New Mexico Environmental Law Center. Although Powell is charged with maximizing income for the state, he also must make sure the land isn't damaged and that the state isn't incurring any liability, Frederick notes. And Powell has a lot of autonomy, because he acts independently of the governor.

"It's hard for people to come in and challenge the things that [Powell] does because he has so much power and discretion," Frederick says.

The list of technologies to be tested at the center  includes nuclear energy and security technology useful to federal law enforcement. Pegasus currently has a contract with the US Department of Defense to create devices that interfere with electronic warfare detonation signals, and Pegasus CEO Robert Brumley previously told SFR that the CITE project was inspired by Pegasus' own difficulties in finding US land on which to test its defense technologies. Pegasus also recently entered into contracts with two other defense contractors to develop the CITE project, Science Applications International Corp. and Advanced Insights Group Inc. Ray-Garcia tells SFR that Pegasus may test its own defense technology at CITE, but adds that this would exclude anything "destructive." Hardison says Pegasus has assured Lea County that it's "not going to test anything of a destructive nature there."

"I can't say we have any negative impressions from what they're doing," Montgomery says. "I think, with any project you look at, any business that's looking to locate in any area, it's going to come down to whether or not they can do it. And that's really more of a business decision than it is anything else."

Santa Fe Reporter