Colorado's Aerospace Industry Poised For New Generation Of Growth

On the heels of two high-profile contributions to spaceflight, including this week’s planned Artemis 1 mission, Colorado’s aerospace industry is reaching for new heights, helped along by the state’s talent pool and availability of land, combined with a substantial military presence and political representation that is supportive of the industry’s aspirations.

Plus, Denver is “a mile closer” to spaceflight, as area economic development officials like to say.

Star Harbor Space Academy chose Colorado for its 53-acre spaceflight training facility because of “the ease of actually being able to move forward with our project, the enthusiasm we had from the political representatives and the aerospace ecosystem and how incredibly collaborative it is here,” Star Harbor CEO Maraia Tanner said at Bisnow’s inaugural Colorado State of Aerospace event, held at Visser Precision in east Denver.

Colorado edged out California, Texas, Florida and Puerto Rico for the campus, which Star Harbor will build on a tract it purchased near Interstate 25 in Lone Tree, with operations expected to begin in 2026.

The state isn’t a new player in the aerospace industry, with the company that is now Lockheed Martin establishing a presence near Denver in 1955. The state’s scientists are still making meaningful contributions, with local Lockheed engineers playing key roles in the development of the Orion spacecraft that is expected to launch into lunar orbit on Friday.

These decades of experience in the aerospace industry have created a talent pipeline that attracts younger companies as they seek to expand, panelists said, and the state’s wide open spaces also weigh in its favor.

“We knew we wanted to put engineering and testing together, so that really starts to limit where those possibilities are in the country,” Ursa Major Technologies Chief Operating Officer Nick Doucette said during the event. 

The ability to locate engineering, manufacturing and testing operations together was one of three key factors in the firm’s decision to select Berthoud, Colorado, for its 90-acre campus, Doucette said. Other factors included the ability to attract talent and the fact that the company’s CEO is from Lyons, “so he was certainly very aware of the opportunities here in Colorado.”

But challenges remain, among them the shortage of “patient capital” among investors who are used to faster returns, as well as the lack of specialized space, including sensitive compartmented information facilities, or SCIFs, needed for companies to support government contracts, something not currently available to smaller aerospace startups.  

SCIFs, which are enclosed, secured facilities where classified information, products and materials are processed and stored, are expensive. They require compliance with federal regulations and cut people in them off from the outside world, which can be an issue for attracting talent. 

“SCIF space is a big issue,” Lockheed Martin Director of Real Estate and Facilities Tom Green said on the panel. 

The time required to build and certify SCIFs creates challenges, Green said. He added that the company has invested in its first modular SCIF space, and while it didn’t cut cost, it saved time. Lockheed Martin has added 2M SF of SCIF space in the past four years.  

Finding these spaces is a huge challenge for smaller companies and supply chain issues create hurdles to building them for larger ones.

Delays in procurement of both standard and specialized equipment “has been a really hard pinch point for us,” Burns & McDonnell Project Development Lead Josh Foerschler said during the event. 

Labor shortages in the construction industry further compound the difficulties, he said.

While the idea of “WeWork for SCIF” space has been tossed around, several panelists said that the specialized, highly regulated nature of the spaces makes the application of a coworking model difficult, especially because empty SCIF space is also very costly. 

Lockheed Martin has been able to lease out its SCIFs as long as the end user is a similar company, for instance in a scenario when Lockheed loses a government contract to a competitor and can then provide space to that competitor to do the work, Green said.

Because of the costs of aerospace research and development, Doucette raised the question of how state governments can incentivize capital investments to help companies offset the costs of facilities so they can focus on product and technology.

“It costs $25M to go rocket testing,” Doucette said. “That's a small one, big ones you can add some extra zeros.” 

Other challenges include addressing the impact of aerospace on the environment. 

“A lot of people focus on the exhaust that’s expelled during a launch, but when you look at the entire life cycle of construction and raw materials, making the propellants … and the manufacturing, assembling and testing, the whole process is just ridiculously dangerous,” Aphelion Aerospace CEO Miguel Ayala said.

And as the industry launches more rockets it’s “quickly going to become a big deal,” he said. Aphelion has developed a new technology that includes a storable, nontoxic, hypergolic propellant and propulsion system for use in small satellite launch vehicles.

Star Harbor’s new campus will offer space that other companies in the industry can use to devise solutions to the challenge of improving sustainability, Tanner said.

“We’re really focusing on those technologies that are being developed for space, for life on orbit or life on other planets that can be leveraged here at home, so agri-tech solutions, energy solutions, waste-processing solutions,” she said.       

 “We really think there is an opportunity to leverage space to improve life on Earth.”