Boeing to Build Private Space Taxis in Old NASA Shuttle Hangar

This story was updated at 11:22 a.m. EDT.

Aerospace giant Boeing has inked a deal to use an old space shuttle hangar at NASA's Kennedy Space Center in Florida as the headquarters to build and test the private company's new spaceship designed to ferry astronauts to and from the International Space Station, company officials announced today (Oct. 31).

Boeing is making Florida the headquarters of its space taxi venture, a move that will add up to 550 new jobs in the area, Boeing's vice president and program manager for commercial crew vehicles said in a news briefing today from Kennedy Space Center.

The retirement of NASA's 30-year space shuttle program in July was accompanied by devastating job losses within Florida's so-called Space Coast. Boeing's new deal is expected to revitalize the area's strong aerospace legacy, and will help breathe new life into NASA's Florida spaceport

"It's a great day for NASA, Kennedy Space Center, Boeing, Space Florida and the commercial space industry here on the Space Coast," NASA's deputy administrator Lori Garver said.

Boeing ironed out the details of the 15-year deal with Space Florida, an aerospace economic development agency supported by the state. The veteran aerospace company will rent one of the space shuttle processing hangars — Orbiter Processing Hangar Bay 3 — at NASA's Florida spaceport.

"Boeing Company has selected Florida as its commercial crew program office," said John Mulholland, vice president and program manager of commercial programs at Boeing. "In addition, we plan to manufacture and test Boeing's CST-100 in this facility … and launch from right here on Florida's Space Coast."

Boeing is expected to use the hangar to build and test its CST-100 (short for Crew Space Transportation-100) capsule, which is being designed as a space taxi to bring astronauts to and from destinations in low-Earth orbit, such as the International Space Station. [CST-100: Photos of Boeing's Private Space Capsule]

"Neither NASA nor the Space Coast can afford to stand still," NASA chief Charles Bolden said in a statement. "We must be aggressive in pursuing this next generation of space exploration — and the jobs and innovation that will accompany it."

Boeing's proposed gumdrop-shaped capsule will carry up to seven passengers and launch on an Atlas 5 rocket made by the United Launch Alliance company, company officials have said. The firm is aiming to have the capsule operational by 2015, Mulholland said.

NASA retired its 30-year space shuttle program in July, creating a gap in American human spaceflight capabilities. The agency is currently relying on Russian Soyuz vehicles to carry astronauts to the space station and back, at a reported price of approximately $350 million per year.

In April, Boeing received $92 million from NASA during the second round of the space agency's Commercial Crew Development (CCDev) program. The company also received $18 million for the CST-100 during the first round of funding in February 2010.

Through CCDev, NASA is seeking to improve the capabilities of private spaceflight. Three other companies received funding from NASA as part of the second round of the CCDev program. The agency is hoping that commercial vehicles will be ready to carry astronaut passengers by the end of 2016.  

Boeing has also teamed up with private space company Bigelow Aerospace, which is developing a commercial space station made of inflatable habitats. In the agreement, Boeing's CST-100 will be used to transport commercial and government clients to Bigelow's space station.

With commercial companies, like Boeing, taking over routine flights to destinations in low-Earth orbit, NASA can focus on developing its next-generation rocket and capsule for deep space exploration.

"The next era of space exploration won't wait, and so we can't wait for Congress to do its job and give our space program the funding it needs," President Obama said in a statement. "That's why my Administration will be pressing forward, in partnership with Space Florida and the private sector, to create jobs and make sure America continues to lead the world in exploration and discovery."

As part of NASA's new direction, the Obama Administration has challenged NASA to send humans to an asteroid by 2025 and on to Mars by the 2030s.

"America has been the world leader in space exploration for more than 50 years, and if we stick to the ambitious plan laid out by the President and Congress, we will be the leader for the next half century," Florida's Senator Bill Nelson said.

The new deal with Boeing also marks a new direction for NASA's Florida spaceport. Following the retirement of the space shuttle program, Kennedy Space Center is being rejuvenated to support future NASA ambitions, in addition to hosting commercial and military endeavors.

"Kennedy continues working to bring new commercial space activities to the center," Kennedy Center Director Bob Cabana said in a statement. "Partnering with Space Florida to enable commercial space operations at Kennedy will help NASA maintain facilities and assets while supporting our nation's space objectives and expanding opportunities for the U.S. economy."

You can follow SPACE.com staff writer Denise Chow on Twitter @denisechow. Follow SPACE.com for the latest in space science and exploration news on Twitter @Spacedotcom and on Facebook.