Tycoon Plans to Convert Mir into a Resort

S A N   F R A N C I S C O, Jan. 13, 2000 -- A U.S. tycoon is pumping millions of dollars into a plan to save Russia’s Mir space station, hoping to transform the empty outpost into an orbiting business park and a vacation resort for highfliers.

Walt Anderson, a Washington-based venture capitalist who has made a fortune in telecommunications companies, has put up $7 million and plans to spend another $14 million to lease the 14-year-old station and renovate it for a money-making venture, business associates of Anderson’s said today.

Anderson’s investment is being channeled through his Bermuda-based holding company Gold & Appel, with the final paperwork due to be completed by the end of the month, the associates said.

A new company, Mir Corp. Ltd., will be formed by Anderson along with other, unnamed investors and the Russian space company RSC Energia, which owns the empty station.

The new company, which will be based in a yet-to-be-determined third country, will take charge of the project, said Jeffrey Manber, former managing director of RSC Energia’s U.S. division and president of Mir Corp.

“There have been other, previous efforts (to save Mir) which have not been very serious. This is an extremely serious effort and we want to be very careful,” Manber told Reuters in an interview, stressing that the final deal with the Russians had yet to be signed.

“We believe that if we are successful, the renovation of Mir will be one of the great undertakings of the century,” Manber said. “People worldwide will share in the pleasure and the drama of keeping the Mir open for business. But the challenges ahead are great.”

‘Deorbiting’ Was in Works If it works, the plan to save Mir will have come just in time. The station, deserted since the last Russian cosmonauts left in August 1999, was slated to be “deorbited” and crashed into the Pacific Ocean unless officials could come up with funds to keep it in space.

But in an announcement in Moscow on Wednesday, Russia’s space agency said it was prepared to send a crew of cosmonauts on a 45-day mission to Mir at the end of March.

Spokesman Alexander Gorbunov said the space agency’s director and chief designers had agreed to use what he called “nonbudgetary financing” to pay for the trip and was awaiting final government approval of the plan on Jan. 20.

Anderson did not return calls from Reuters seeking comment on Thursday. But he told the San Jose Mercury News that Mir represented “a huge opportunity.”

“Yes, it’s old, and, yes, it has a few problems. Yet any old building has that. You don’t tear down an old building because it has a few heating and air-conditioning problems. You renovate it,” he said.

Mir’s problems go far beyond heating and air conditioning, however. Launched in 1986, Mir has ensured Russian predominance in long-term manned space flight and has given Russian scientists a head start in designing the living quarters for the new $60 billion International Space Station.

Now in orbit long past its original five-year life span and plagued by problems, Mir suffered a near-deadly fire in 1997 and a crippling crash that forced one section to be sealed off because of a punctured hull.

A Cosmic Fixer-Upper That air leak — along with other problems of age, including corrosion, metal fatigue and chemical contamination — make any rehab job on Mir likely to be a major undertaking. And the costs of maintaining manned operations on Mir has been put at $250 million per year.

But the Mir Corp. group is confident the station can be cleaned up and expanded to become a base for lucrative commercial operations such as orbital satellite repair and pharmaceutical research.

It would also be revamped to welcome rich space tourists, a plan that has the definite advantage of both an established facility already in orbit and — thanks to Russian rockets — a way to get there.

Anderson told the Mercury News that he believed that the first “citizen explorer” would pay as much as $40 million for the ride but that the price would eventually drop to “a more reasonable $20 million to $25 million.”

Manber said that while it was premature to discuss details of the space tourism plan, it definitely was part of the overall scheme to bring Mir back to life.

“Yes, one idea is a tourism spot,” Manber said. “I would prefer to call it a destination location.”