On the cusp of history: a small Texas city adapts to life with Elon Musk and SpaceX


Willy Lowry
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On a hot, sticky morning, Bobby Lerma wades through dusty, ankle-length grass to reach the pink stucco mausoleum that sits on his family ranch outside of Brownsville, Texas.

“That’s my dad up there,” says Mr Lerma, pointing to a white marble engraving on the wall. “Then we have my mom, who is over here on top, and that’s her brother, and then my late wife is over there, so we’re full.”

Well, not quite. The 64-year-old retired municipal judge and lawyer says he intends to be buried next to his kin on the property his mother’s family has owned since the start of the American Civil war in 1861.

Quiet south Texas town adapts to life with Elon Musk and SpaceX

The only concern is that, 11 kilometres from Mr Lerma's sprawling 485-hectare ranch, the world’s richest man, Elon Musk, has built a Jetson-like space facility called Starbase, which has transformed the tranquil area into a bustling hive of rocket scientists and engineers.

They are working on building the largest rocket ever created, the 120-metre-tall Starship, a reusable craft that Mr Musk hopes will one day be able to carry equipment and people on missions to the Moon and Mars.

Starbase rises above a pristine wildlife refuge and abuts one of southern Texas’s last remaining public beaches.

Driving along Texas State Highway 4, the shimmering futuristic rockets loom over an expanse of relatively untouched land, appearing like an alien aberration.

Beneath them in the surrounding wildlife refuge, hundreds of birds and insects buzz through the air only a few kilometres from where the Rio Grande meets the Gulf of Mexico.

When SpaceX launches its powerful rockets, the company has to close down Highway 4 - the only road leading to Mr Lerma's property and Boca Chica Beach.

“We have trouble getting home, because every time they want to do something, the road gets closed and the beach gets closed,” Mr Lerma told The National.

Under Texas state law, public beach access is a constitutional right. But in 2013, the state's legislature amended the law to allow for closures during SpaceX flight operations.

A 2014 agreement between SpaceX and the Federal Aviation Authority (FAA) stated that the company must limit road closures to 180 hours per year, spread out over 12 launches.

But many residents complain that SpaceX has far exceeded that original agreement.

Beyond the nuisance of road closures, there are environmental concerns as well.

“Just from that land being developed, we've already seen harsh declines in different bird populations," said Emma Guevara, an organiser with the Sierra Club in Brownsville, who blames the deaths of ocelots, a type of wild cat that only lives in two parts of Texas, on SpaceX's activities.

Along with other environmental groups, the Sierra Club has filed a lawsuit against the Texas General Land Office and Cameron County, where Brownsville and Boca Chica are located, over road closures and restricted access to the beach.

A recent environmental assessment report conducted by the FAA found that SpaceX had to make 75 adjustments to mitigate its environmental impact to move forward with the Starship programme.

In addition, the assessment called for the company to limit weekend road closures to five per year and said SpaceX should not restrict beach access during 18 federal and state holidays.

SpaceX did not respond to repeated requests for comment. So far, their only public comment on the FAA report has come in the form of a tweet.

“One step closer to the first orbital flight test of Starship,” the company said.

Why Boca Chica?

Boca Chica sits in the southernmost corner of Texas near the gulf of the Rio Grande, a few kilometres east of the city of Brownsville and the US-Mexico border.

The very remoteness that makes it attractive to local residents and visitors alike made it an ideal location for the SpaceX launch site.

“It’s always possible that something goes wrong and so you want to have a good clear area,” said Mr Musk at a SpaceX event in February 2022. “You want several miles around the launch site unpopulated or at least clearable.”

It is also the farthest southern point in the continental US outside of Florida, which means it's close to the equator, making it easier for rockets to reach orbit.

Texas also offered a hospitable business environment for the billionaire entrepreneur to build and base one of the world’s largest private space companies.

In 2014, Rick Perry, then governor of Texas, offered more than $15 million in incentives for Mr Musk to set up shop in Boca Chica.

"SpaceX is excited to expand our work in Texas with the world's first commercial launch complex designed specifically for orbital missions," Mr Musk said in a statement at the time.

In the years since, Mr Musk has found an agreeable partner in the state, choosing not only to move SpaceX there, but his electric car company Tesla as well.

“I think Texas has the right amount of rules and regulations,” Mr Musk joked to an audience back in February.

Mr Musk has even made Boca Chica his home base, reportedly living in a bungalow worth only $50,000.

Since SpaceX first arrived in Boca Chica in 2014, the company has been buying up land at a ravenous pace in hopes of creating its own Starbase city.

It is easy to spot the differences between Starbase employees' homes and those that belong to locals unwilling to sell. The first clue is often the Tesla parked in the driveway.

A city on the rise

About 1,600 people work at SpaceX in Boca Chica, which has helped to vastly improve the area's economy.

Brownsville, the nearby city of 188,000, has long been considered one of America’s most impoverished.

The 2020 US Census revealed that the city had a median household income of $40,924, compared to a median income of $67,521 across the US. More than one quarter of the city's residents live in poverty.

The frontier city, which borders Matamoros, Mexico, is most often associated with immigration issues along the southern US border, but that narrative has started to change with the arrival of SpaceX.

The city has an abundance of 19th century historical buildings in various states of disrepair. The years of economic downturn are evident in the hardscrabble streets and dilapidated facades.

But a revitalisation project partially funded by Mr Musk has helped to restore a stretch of the Brownsville city centre to its former glory.

Hip restaurants and bars line several blocks and offer upscale cuisine to the city’s newest residents and SpaceX employees.

At Terra's, a popular new eatery on Washington Street, diners chow down on $18 tacos in a cavernous, exposed-brick dining hall. It is a scene straight out of New York City or Austin, Texas, a city often considered one of America’s hippest.

“[SpaceX] has put us on the map in terms of our potential and it provides just a lot of hope and aspiration,'' said John Cowen, a Brownsville city commissioner. “We're at the centre of innovation now.”

But SpaceX has also sent Brownsville’s house prices soaring.

The median house price as of April 2022 was $239,000. That’s almost $100,000 more than it was in April of 2019, website Realtor.com reported.

Mr Lerma said SpaceX approached him to see if he would be open to selling his property. He immediately declined.

"It's not for sale. No, it means too much to the family," he said.

Driving through a new subdivision on the outskirts of Brownsville, Craig Grove, a local real estate agent, pointed out homes he had recently sold.

“I sold that one right there last year for $329,000,” he said, pointing to a large home with a two-car garage.

Mr Grove, who considers himself the city’s biggest cheerleader, believes SpaceX has offered a much-needed injection of capital and hope into Brownsville.

“There's definitely been a bump - it's something that we never thought we would see, these people coming from California, Seattle, Denver, some parts of the East Coast coming to work at SpaceX, and these high-tech jobs, you know, specialty welding, computer programming, robotics, all these kinds of things,” he said.

Mr Grove even created a subsidiary of his main business to cater specifically to SpaceX employees called Starbase Realty.

He said SpaceX employees tend to buy three- to four-bedroom homes in newer developments that sell for between $200,000 and $300,000.

Those prices are a far cry from what they would pay in Los Angeles or Seattle, he explained.

“It's historically way more affordable,” he told The National. “And when you're looking at it from the perspective of Los Angeles, or these other big metros to Brownsville, it's crazy.”

The influx of new wealthier residents in a city that has a large population that lives on the margins of poverty has upset some locals.

“We’re seeing overcrowding in the city,” said Ms Guevara, the Sierra Club organiser.

“We're having a real housing crisis; it's really really difficult to find affordable housing or even to find housing in general.”

While Mr Musk has brought in a great deal of money, excitement and business to Brownsville - winning him the support of many local politicians - the same cannot be said of the whole community.

On a hot June night, a middle-aged man wearing a white sleeveless T-shirt, walks by a large mural of Mr Musk that adorns a building in Brownsville and raised his middle finger at the billionaire.

But Mr Cowen, the city commissioner, was adamant that the city was in a much better place now that Mr Musk is a nearby resident.

“Elon provides a better future for everyone," he said.

Mr Lerma was less diplomatic about Mr Musk's presence in the area, criticising local politicians for “worshipping the altar of King Elon".

While he admitted there could be benefits to having Starbase as part of the community, he worried about its influence going unchecked.

“I'm not in the way of progress - progress is here,” he said.

“Maybe one of my kids might get a job at SpaceX. But will my kid not be able to go to the beach one day?”

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Navdeep Suri, India's Ambassador to the UAE

There has been a longstanding need from the Indian community to have a religious premises where they can practise their beliefs. Currently there is a very, very small temple in Bur Dubai and the community has outgrown this. So this will be a major temple and open to all denominations and a place should reflect India’s diversity.

It fits so well into the UAE’s own commitment to tolerance and pluralism and coming in the year of tolerance gives it that extra dimension.

What we will see on April 20 is the foundation ceremony and we expect a pretty broad cross section of the Indian community to be present, both from the UAE and abroad. The Hindu group that is building the temple will have their holiest leader attending – and we expect very senior representation from the leadership of the UAE.

When the designs were taken to the leadership, there were two clear options. There was a New Jersey model with a rectangular structure with the temple recessed inside so it was not too visible from the outside and another was the Neasden temple in London with the spires in its classical shape. And they said: look we said we wanted a temple so it should look like a temple. So this should be a classical style temple in all its glory.

It is beautifully located - 30 minutes outside of Abu Dhabi and barely 45 minutes to Dubai so it serves the needs of both communities.

This is going to be the big temple where I expect people to come from across the country at major festivals and occasions.

It is hugely important – it will take a couple of years to complete given the scale. It is going to be remarkable and will contribute something not just to the landscape in terms of visual architecture but also to the ethos. Here will be a real representation of UAE’s pluralism.

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

War and the virus
RESULTS

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Isaac Pimentel (BRA) beat Delfin Nawen (PHI) TKO round-3.

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Iraq negotiating over Iran sanctions impact
  • US sanctions on Iran’s energy industry and exports took effect on Monday, November 5.
  • Washington issued formal waivers to eight buyers of Iranian oil, allowing them to continue limited imports. Iraq did not receive a waiver.
  • Iraq’s government is cooperating with the US to contain Iranian influence in the country, and increased Iraqi oil production is helping to make up for Iranian crude that sanctions are blocking from markets, US officials say.
  • Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, pumped last month at a record 4.78 million barrels a day, former Oil Minister Jabbar Al-Luaibi said on Oct. 20. Iraq exported 3.83 million barrels a day last month, according to tanker tracking and data from port agents.
  • Iraq has been working to restore production at its northern Kirkuk oil field. Kirkuk could add 200,000 barrels a day of oil to Iraq’s total output, Hook said.
  • The country stopped trucking Kirkuk oil to Iran about three weeks ago, in line with U.S. sanctions, according to four people with knowledge of the matter who asked not to be identified because they aren’t allowed to speak to media.
  • Oil exports from Iran, OPEC’s third-largest supplier, have slumped since President Donald Trump announced in May that he’d reimpose sanctions. Iran shipped about 1.76 million barrels a day in October out of 3.42 million in total production, data compiled by Bloomberg show.
  • Benchmark Brent crude fell 47 cents to $72.70 a barrel in London trading at 7:26 a.m. local time. U.S. West Texas Intermediate was 25 cents lower at $62.85 a barrel in New York. WTI held near the lowest level in seven months as concerns of a tightening market eased after the U.S. granted its waivers to buyers of Iranian crude.
Updated: June 29, 2022, 12:59 PM