State Lawmakers Consider Space Economy; Kaua‘i Could See Economic Ripple Effects

State lawmakers have moved two measures this month that would channel public support toward a California company, Fenix Space Inc., and its proposed launch operations at Hilo International Airport — a bond-financing plan to allow up to $40 million in low-interest bonds and legislation to help pay for a high-tech hangar. Lawmakers and technology officials say development on Hawai‘i island could produce economic ripple effects reaching neighbor islands including Kaua‘i.

The bond measure would permit the sale of up to $40 million in low-interest bonds to benefit the Fenix project; available reports show that measure recently advanced after initial committee hearings but do not list a bill number for the bond proposal. The hangar bill is identified as SB 2693 and was advanced by two Senate committees earlier this month, according to legislative movement reported in late February.

Fenix Space Inc., identified in filings as a California-based firm, proposes to launch payloads using a winged booster vehicle that would be towed aloft by airplane, a concept public materials describe as a lower-cost access-to-space option. The proposed hangar at Hilo International Airport is described as a “high-tech hangar” to support that winged-booster operation; at least one published image of the vehicle was credited “Courtesy Fenix Space.”

Hawaii Technology Development Corporation leadership has publicly backed the measures in committee testimony. Lam of HTDC submitted written testimony endorsing SB 2693 and framed the initiative as an economic diversification play, saying development of aerospace infrastructure can generate ripple effects across related industries including advanced manufacturing and help diversify Hawaii’s economy. Lam added, “The proposed project at Hilo International Airport has the potential to attract new ventures, support existing com­panies, and create high-quality jobs, clustered strategically in a concentrated geographic area,” he said.

The legislation sits against a longer history of aerospace efforts in the islands. The NASA-funded HI-SEAS analog program established a Mauna Loa biodome in 2012, University of Hawai‘i at Hilo’s PISCES displayed a robotic lunar rover at the state Capitol in 2014, and a major past attempt to build a spaceport in Ka‘ū failed in the late 1980s and early 1990s. The Legislature abolished the state Office of Aerospace Development in 2021, with some of that office’s work since shifted to HTDC. Lawmakers formed a bipartisan Aviation and Space Caucus of 13 members in 2024, chaired by Rep. Kanani Souza, and have introduced aerospace bills across recent sessions.

Local officials on Hawai‘i island are reported as supportive in committee testimony; Lam told a House committee that the state Department of Transportation and Hawaii County Mayor Kimo Alameda back the Fenix project. At present, public records reviewed do not identify the bond bill’s file number, the specific Senate committees that advanced SB 2693, sponsors and vote counts, or any company-produced environmental or economic impact studies. Both measures recently advanced after initial committee hearings; their fate will depend on remaining committee actions and floor votes this legislative session, decisions that will determine whether Hilo construction and potential launch activity translate into the cluster benefits proponents say could extend to Kaua‘i.