Established players include NASA's Wallops Flight Facility and the NASA Langley Research Center in Hampton as well as about 400 companies in Virginia that specialize in everything from making satellites to designing space shuttle science laboratories.

* * *

Virginia businesses aren't venturing into alien territory. Both NASA Langley and the Wallops facility have dealt for decades with the intricacies of orbits miles above Earth.

NASA Langley was founded in 1917 as the country's first national civil aeronautics laboratory. Although its original mission was to improve World War I biplanes, Langley quickly became a key player in the race to put a man in space. Glenn and the six other original astronauts of Project Mercury trained at Langley from 1959 to 1962, preparing for everything from weightlessness to exiting space capsules following splashdowns. A few years later Apollo astronauts came to the center to practice simulated lunar landings.

Since then Langley researchers have worked on space stations, Mars missions and space shuttles. Today 4,000 employees there are exploring the future of aviation safety, high-speed air travel and the next generation of the space shuttle. One former Langley researcher, Stephen Robinson, joined Glenn as an astronaut on the most recent space mission.

Wallops Island, at the northern end of Virginia's Eastern Shore near Chincoteague Island, was owned by a fishing and hunting club until 1945. With its remote location along the Atlantic Ocean, the seven-mile-long island seemed a perfect site from which to launch research rockets. In the early days researchers at NASA's predecessor organization attached airplane models to rockets to test their endurance. And in the late 1950s, a Wallops rocket blasted two monkeys skyward in the first test of live animals in space. Belt-tightening nearly closed the 6,000-acre Wallops facility in the early 1990s. But today it is holding steady with about 800 workers, making it among the five largest employers on the Eastern Shore. Wallops' jobs are the highest paying in the shore's two counties, where the biggest companies are poultry processing plants.

Wallops, which is in Accomack County, is an extension of NASA's Goddard Space Flight Center, and it is known for launching small rockets and conducting earth science research. It also helped track the November space shuttle flight.

The new spaceport puts Wallops in sync with NASA's mission of establishing partnerships with the private sector. "We are looking at resources we can share and will coordinate scheduling and be responsible for the safety and tracking of all launches," says Keith Koehler, NASA Wallops' public affairs specialist. The new spaceport is on the southern end of NASA's property. When phase two of the project is done, it will have the tallest of two orbital launch towers on the island.

* * *

In 1994, the federal government anted up $10 million in grants to jump-start space-launch development, and Virginia officials yearned to share in that bounty. They quickly put together a proposal to expand Wallops, but the federal money went instead to facilities in Florida and California.

"That solidified the idea that if we were going to play ball with the big guys, then we needed to get real," says Billie M. Reed, executive director of the Virginia Commercial Space Flight Authority. When the funds were awarded, those two states had their acts together -- Virginia didn't. So in 1995, the General Assembly created the authority Reed now heads. "We had a twofold charter: economic development in the aerospace sector along with education, research and technology transfer."

Before the authority existed, Reed directed the Center for Commercial Infrastructure, which started in 1992 at Old Dominion University in Norfolk. Today the center has melded with the authority, which operates with a five-person staff from a converted garage owned by Old Dominion. Although the authority has a statewide mandate, its top priority has been getting the Virginia Space Flight Center at Wallops up and running with paying customers.

"Florida is in the lead," Reed concedes. "It has a two- to three-year jump on us in terms of promoting aerospace from a statewide effort." Florida's space flight authority was approved in 1992. California also joins Florida in having an authority and one of the largest and most established government launch ranges. Both states have the expertise needed to go after the commercial launch market.

In sharp contrast, hardly anyone outside the commonwealth gave Wallops much thought until the authority began touting the launch site. But the natural advantages that make the island work for NASA should make it attractive to the private sector. The island is secluded, and nearby land is sparsely populated. Wallops' location lets scientists shoot rockets safely out over the Atlantic Ocean, and the island's latitude and longitude are perfect for sending satellites into equatorial and other desirable orbits.

"Wallops is a unique national resource," says Chris Barker, president of Space America Inc., an Alabama-based company that may launch satellites from the new spaceport. "No place else can handle our requirements the way it can. Wallops has lots of experience in small launch vehicles and is a low-profile, focused operation."

Reed and Wayne Woodhams, the authority's deputy executive director, are frequently on the road courting potential customers such as Space America. Their marketing mantra is that Virginia's spaceport is a low-cost, high-quality means of blasting satellites into orbit. In 1997, there were 54 commercial satellite launches worldwide, Reed says. With more than 1,200 satellites expected to go up during the next decade, he predicts the Virginia spaceport will become a regular on the launch circuit. "Our cost element is half a million dollars per launch. We are cheaper than the rest," he maintains.

A secret weapon is the spaceport's partnership with the experts at NASA. Their efforts are backed by the Virginia Economic Development Partnership, which has a marketing staff member touting Virginia's space business. In September the authority gained another ally when it contracted with Reston-based DynCorp to market and manage spaceport operations.

For 50 years DynCorp has been a government service contractor providing everything from aircraft maintenance at military bases to police recruits in Bosnia. The 17,000-employee company already had 25 people working on NASA aircraft at Wallops when it bid on the space authority contract. Last fall DynCorp formed a subsidiary called DynSpace to handle the spaceport job. Still to come at the spaceport are a 200-foot, $9 million launch tower on top of the launch pedestal and an expanded payload processing facility. These finishing touches will come once the authority signs some paying customers. As part of its management contract, DynCorp anted up $4.5 million for the improvements. It also signed memorandums of understanding with several launch companies that plan to use the spaceport once they secure contracts to put satellites in orbit.

"We would like to see a launch by the first quarter of the year 2000," says DynSpace President Bob Parker. "From there we would like to ramp up to eight or 10 launches a year." Although he anticipates hiring no more than a dozen new workers at the Wallops spaceport, "we would like to attract space industry to the area and see satellite manufacturing there," Parker says.

That scenario could become reality if the Virginia spaceport wins a bid to become a hub for VentureStar, a $5 billion commercial project destined to replace the current space shuttle system. Sverdrup Corp., Lockheed Martin and three other industry giants are creating a reusable, single-stage-to-orbit spacecraft whose original design hails from NASA Langley. Developers plan to invest $800 million on a site to build, launch and recover the commercial spacecraft. The new Virginia spaceport is among 15 U.S. sites vying for the project, which is expected to create 2,000 assembly and 2,000 operations jobs starting in 2004.

Given the spaceport's location and NASA-related expertise, "our chances are better than most," says the authority's Reed. "We are very much in the running."

* * *

There are two things Orbital Sciences executives are sold on -- satellites and Northern Virginia. As far as they're concerned the two go hand in hand. Northern Virginia has more than 1,000 companies involved in information technology and telecommunications, and satellites are the critical link that make many of these services work.

Sterling-based Orbital is a $750 million satellite company that finds itself involved in "a huge growth industry. There's an explosion in new ways of using space. Our revenues are increasing about 25 percent every year," says spokesman Barron Beneski. When it comes to satellites, Orbital does it all -- manufacturing them, launching them and providing services back on Earth.

"We are one of the few companies in the world that participates in just about every aspect of commercial space," Beneski says. Orbital, founded 17 years ago, was a pioneer in low-earth orbit satellites when it launched its first one in 1991. Today Orbital has plenty of competition. Low-orbit satellites are changing the way the world communicates. They are making telephones available for the first time in many Third World countries, delivering communication services worldwide and providing digital television.

This year Orbital is investing $50 million in Virginia by expanding its Sterling headquarters from 165,000 square feet to 775,000 square feet. Included in the six buildings nestled on a 70-acre campus will be a plant that makes all Orbital satellites. Currently satellites are manufactured in McLean and Germantown, Md. Of Orbital's 4,200 employees, all but 1,000 work in the greater Washington area. "We are hiring hundreds more people this year and plan to do that next year, too," Beneski says.

Orbital's location near Washington Dulles International Airport is a prime one because "the area is replete with satellite and space companies," Beneski says. "We also have access to the nation's capital and lawmakers. That's important since this is a brand new industry and rules and regulations are being promulgated all the time."

Northern Virginia's highly educated work force and critical mass of technical talent is a plus. Having a cluster of high-tech and space-based companies nearby "helps us attract people to the area," Beneski says. Being in a state with its own spaceport also is a bonus for Orbital because Virginia lawmakers have created legislation that provides a tax break for satellites made and launched in Virginia. One Orbital subsidiary already has a cluster of 28 satellites in orbit. Of those, all but four were launched from NASA facilities at Wallops Island. Beneski says the new Virginia spaceport "is a likely candidate" for some of the larger rockets Orbital uses to launch satellites.

As the space business changes from one that hinges on government contracts to one that relies on commercial customers, Virginia players -- even those not traditionally in the space business -- are finding ways to get in the door. This fall 50-year-old Atlantic Research Corp. of Gainesville bought a British liquid-engine business that provides satellite fuel. Last summer Fairfax-based ICF Kaiser International, an engineering firm, teamed up with Northrop Grumman and Wackenhut Services to win a $2.2 billion NASA contract to run support operations at Kennedy Space Center and four other sites.

Meanwhile, Spacehab Inc. of Vienna continues to reinvent itself based on the industry's needs. The company was founded in 1984 to build modules to hold people who would pay to ride on the space shuttle. The Challenger explosion ended that plan, so the company switched to making portable habitats where astronauts can do experiments. The units have been used on 12 flights, including the most recent shuttle mission. In the past, Spacehab relied on NASA for all its revenue. This meant it got paid only when a module was actually on a space shuttle. On the most recent shuttle mission, however, 70 percent of Spacehab's revenues came from commercial customers doing experiments on the shuttle.

In 1997, Spacehab bought Astrotech Space Operations, which provides satellite-processing services for companies like Motorola. In August Spacehab hit a home run when the Aviation Week & Space Technology publication named it the "most competitive" and "best managed" small aerospace company in the world. Three months later the $64 million company got a boost when Glenn and other Discovery astronauts conducted experiments in the closet-sized aluminum modules that are its signature product. The company also recently bought Johnson Engineering, a NASA training contractor based in Houston.

For Frank DiBello, vice chairman of SpaceVest, the dawn of the 21st century is evocative of the start of this century. Back then newfangled railroads, automobiles and airplanes paved the way for vital transportation links we still rely on today. "You could liken the commercial application of space in providing voice, video and data" to what happened then, DiBello says.

His Reston company is betting that space-related industries will become anchors of the 21st century economy. SpaceVest was founded in 1991 as the first venture capital firm devoted to the space industry. Since then it has invested about $50 million in private companies involved in the space business. While some of these firms make satellite products, others apply space-related technology to such earthly pursuits as making threaded tools and electric transportation systems. An example is Arc Second Inc. of Herndon, which makes laser-based measurement devices for positioning used in virtual reality applications as well as the construction and medical equipment industries. Its technology came from the Star Wars program.

"The next fund we expect to close on is targeted to be $200 million," DiBello says. SpaceVest investors include pension funds, foundations and banks, all of which had to be convinced to put their money into space.

"In the early days they were skeptical," recalls SpaceVest Chairman John Higginbotham. "We targeted conservative investors and educated them over the years. Today we are finding more acceptance." A turning point was 1996, which Higginbotham calls the crossover year. For the first time, commercial revenues in the industry outpaced government contracts. That year the worldwide space industry topped $75 billion, and 53 percent of that work was commercial.

"By the end of 2000, we forecast revenues of $120 billion with 70 percent of that being commercial," Higginbotham says. SpaceVest is "very bullish on the future of the space industry and Virginia," DiBello adds. "Five out of 10 of the companies in our portfolio are Virginia companies."

The Old Dominion has a history of launching small rockets. And as launch technology improves, Virginia should gain a greater role in supporting small- to medium-sized businesses launching payloads. With the addition of the spaceport, DiBello says, "Virginia has a unique capability."

© JANUARY 1999, VIRGINIA BUSINESS MAGAZINE