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Musk’s other identity: urban transformer

SpaceX drives Hawthorne’s space industry

In Elon Musk’s business empire, electric car maker Tesla and SpaceX are undoubtedly the two “pillars”. Their rapid development and expansion has not only pushed Musk to the position of the world’s richest man, but also changed a city.

Center for Aerospace Entrepreneurship: Hawthorne

Earlier this year, Tim Berry (Tim Berry) began looking for a new job when he was still working as an engineer at SpaceX. He eventually landed a job less than a mile from his old employer’s front door.

Berry lives in Hawthorne, Calif. a city of 88,000 people, mainly working class, about a 10-minute drive from LAX. He is part of a small group of aerospace professionals who have flocked to Hawthorne in recent years. Attracted by SpaceX, America’s most valuable startup, many highly skilled engineers have stayed here because of Hawthorne’s cheap rents and booming aerospace startups.

His new employer is Launcher, a company that helps put satellites into orbit at low cost. Berry says he wouldn’t have taken the job if it had required a long commute. “Sorry, I’m not a huge fan of the East Coast or New York,” Berry says, adding that instead, his commute remains exactly the same, “and I’m very happy to still be working in Hawthorne.”

Local officials are pleased, if not a little surprised, that the city has become a hub for entrepreneurship. “Hawthorne has a lot going for it.” Hawthorne City Councilman David Patterson (D). It’s close to Los Angeles’ vibrant airline industry, which has many of its own startups, but the cost of living isn’t as high. Patterson says there was an attempt to create a venture capital gas pedal in Hawthorne a few years ago, but the idea stayed in the discussion stage.

As it turns out, the city doesn’t need a venture capital accelerator at all. For seven of the last 10 years, Musk’s SpaceX and tunneling company Boring were the only startups in the city that could attract venture capital. But by 2020, Hawthorne startups outside of Musk’s company had attracted a respectable $105.2 million in venture capital. Last year, these startups attracted $356.7 million in investment and are expected to double that this year, according to research firm PitchBook.

SpaceX’s success drives high-tech manufacturing

Many cities have tried to create their own versions of Silicon Valley, but some have been more successful than others. Notable destinations like Austin, Texas (Musk’s recent new home) and Miami have attracted hordes of software developers during the surge in remote work triggered by the new crown pneumonia pandemic. Musk’s soon-to-be pocketed tweet is still in San Francisco. Hawthorne, however, is a different kind of up-and-coming city. the convenience of Zoom virtual meetings is far less of a boost to the city’s startups than the ready availability of actual physical space and a surplus of talent who know how to use mills, lathes and 3D printers.

Now is a good time to create a high-tech manufacturing hub. As the stock market plummets and less tangible inventions like cryptocurrencies face liquidation, many engineers and programmers increasingly don’t want to just manipulate 1 and 0 code or sell targeted advertising; they want to create physical objects. Just as the rise of software-based companies like Google and Facebook in the early 21st century created an era of roughly 20 years in which software companies became the dominant type of startup, the success of SpaceX and other hardware companies is helping to change the ambitions of entrepreneurs.

Renowned venture capitalist Marc Andreessen summed up industry’s enthusiasm with his loud call for 2020: “It’s time to build.” In recent years, the attention of venture capitalists and engineers has been focused on physical inventions, especially aeronautical ones.

Of course, like any success story, there is a disturbing side to Hawthorne. Familiar themes of middle-classization and inequality are eating away at the city’s edges, just as it prepares for tremendous growth.

Named for novelist Nathaniel Hawthorne, the city became known early on as the childhood home of the band group the Beach Boys. It was also the home of Jim Thorpe, the first Indian to win an Olympic gold medal, and Marilyn Monroe. The greater Los Angeles area has a storied history of aviation innovation. Hawthorne first became an aviation star in 1939, when aviation pioneer Jack Northrop started his company there. in 2008, Musk’s SpaceX moved into Northrop’s former location as a combative startup.

SpaceX quickly became a senior member of the space industry complex, with facilities across the country, playing a key role in America’s space ambitions. in 2016, some engineers left the company but stayed in neighboring El Segundo, California, to start the consulting firm Second Order Effects, which helps other startups and larger companies. Shaun Arora of MiLA Capital Advisors LLC, which has been funding companies in the area for years, said the creation of Second Order Effects helped spark a startup boom in the region.

Arora said he has seen an increase in the number of startups in Hawthorne over the past few years. He said Musk runs a company that tends to exhaust employees, even if it inspires them at the same time. “SpaceX teaches people that hard work and optimism can turn the impossible into the possible,” Arora said, “At the same time, many former SpaceX employees I spoke with said they felt their careers were undervalued, despite the company’s compelling goals. “

For Launcher founder Max Haot, the talent pool of rocket engineers seeded by SpaceX was a major draw. After scouting Austin, New Orleans and Pasadena, California, he decided to locate the company in Hawthorne. Haot’s team in Hawthorne consists of about 55 people, including at least 14 former SpaceX employees.

Cheap rent

Another advantage of Hawthorne: the rent is cheap. Launcher’s 24,000-square-foot leased facility is “much cheaper” than rents in slightly better neighborhood towns like El Segundo, according to Haupt. In addition, while these neighboring cities may have large warehouses, landlords there are busy renovating them to accommodate higher-rent facilities that are better suited to software companies. Howitt looked at warehouses that once provided 1,000 or 2,000 amps of power but have been renovated to handle only a few hundred amps. That’s not a problem for most businesses, but not for the orbital startup, whose engineers are working on power-intensive projects like how to power rockets and how to run multiple 3D printers at once.

Joel Ifill, founder of precision airdrop company Dash Systems, has also taken advantage of Hawthorne’s low rent, paying well under $2 per square foot. Phil’s company is just north of SpaceX, outside an aircraft hangar at Hawthorne Municipal Airport.

“The hangar floor space here is usually one of the cheapest in the big cities.” He said. The Dash cave-like hangar has space for the Cessna 208B Grand Triumph turboprop, as well as tables, a small machine shop and a carpeted, coffee-table and sofa area perfect for watching small planes take off and land smoothly, including the occasional Musk plane.

Phil does not currently employ former SpaceX employees, but he has found many other large companies in the field to choose from. Those companies include Lockheed Martin, Boeing and Northrop Grumman, all of which have offices in El Segundo. “We have people from Tesla, Virgin Galactic and WET Design.” He said he was referring to a water engineering company located 30 miles north in Sun Valley.

Some of Hawthorne’s startups have little to do with rockets or satellites. Ring, Amazon’s next-generation doorbell company, is based in the city. So is Stellar Pizza, an automated pie company run by a former SpaceX engineer.

Most companies, however, aim for the space sector. Another example is Venturi Astrolab, based in a former bus bench factory south of SpaceX. venturi founder Jaret Matthews wants the company to build the lunar rover that was chosen for NASA’s future Artemis Moon mission.

“We’re building large robots,” Matthews said, “and we need a lot of space to test them.” That includes the interior, as well as a covered area behind the building scattered with basalt to better simulate lunar conditions. In addition to himself, Matthews’ team includes several former SpaceX employees.

Urban development drives up the cost of living

Downtown Hawthorne doesn’t yet look like a thriving commercial center. Its main street is lined with car dealerships, run-down storefronts and a 24-hour laundromat. That’s where part-time handyman Luis Castaneda sat on a recent afternoon. He says he’s noticed more high-end workers in town and blames them for rising prices. He said he rents a room for $700 a month, compared with $400 a month for a similar room when he first came to the city 10 years ago.

Alejandra Alarcon is 29 years old and grew up in Hawthorne. She shares a house with her mother, brother and grandmother. Almost every house in the neighborhood has a similar demographic. And now, she says, the families of newcomers usually consist of a couple with a dog and no children. She admits she has mixed feelings about SpaceX, its derivatives and the urban boom that came with it.

“SpaceX has brought jobs to Hawthorne,” she said, “but I don’t think SpaceX will bring jobs to Hawthorne residents.” Araken works at a university in the Westchester area of Los Angeles and commutes seven miles north each day. She likes the idea of a new homemade beer bar or two opening in the Hawthorne neighborhood, but also finds it disturbing.

“When I walk into these places, I no longer feel like I’m in my hometown because everyone is so different compared to the people I grew up with,” she puts it this way, “The people I grew up with were working class.”

Last year, Araken was shocked when she saw a gorgeous new-looking apartment building open. It’s on Crenshaw Boulevard, a seven-lane road two miles east of the town’s largely abandoned shopping center.

Data from the real estate website Zillow shows that two-bedroom rents in the building, called Millennium South Bay, are as high as $3,725, well above the city’s median price of $2,285. The new building’s website promises tenants easy access to the beach and other local restaurants, but the most attractive amenity in Millennium South Bay is, of course, the SpaceX headquarters a block away.

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