Starbase, USA: Our Final Urban Frontier?

On May 3, 2025, with a vote of 212 to 6, residents in Cameron County, Texas, incorporated the new municipality of Starbase. The new city, anchored by SpaceX’s Boca Chica Beach launch site, is the latest iteration of a town governed by one company. While Elon Musk, founder of SpaceX, plans to colonize Mars, his new city has given his company sweeping powers over land use, utilities, and civic planning. Space X is launching a new form of governance. 

That last sentence is a bit of hyperbole, as Starbase isn’t without historical precedent. It is a high-tech echo of the factory towns of the early 20^th century. 

From Pullman to Hershey

Factory or company towns proliferated across the United States during the industrial boom of the 1910s and 1920s. These were self-contained municipalities built, owned, and operated by corporations, often in isolated areas where existing infrastructure was minimal. In theory, these towns offered workers everything they needed: housing, schools, churches, stores, and even entertainment. In practice, they often came with a price.

Take Pullman, Illinois, founded by George Pullman for his railcar factory workers. At first glance, a worker’s paradise. Homes were neat and well-kept, and the community had access to a library and parks. But Pullman also dictated residents’ behavior, from the books in their homes to their conduct in church. When a financial downturn led Pullman to cut wages but not rents, it was a grim reminder of what happens when your boss is your landlord and mayor.

Or the more benevolent Hershey, Pennsylvania, another famous company town. Milton Hershey genuinely sought to uplift his chocolate factory workers with clean housing and good wages. But even in Hershey, where conditions were better than average, residents had no vote in local affairs. Their lives were managed under a compassionate corporate dictatorship.

Reed Creek – A “Wish Your Heart Makes”

Walt Disney learned a great deal while building Disneyland, including how local government could facilitate or impede his plans and that speculators could make the surrounding geography very expensive to purchase. To keep the costs of Walt Disney World, a far greater enterprise, reasonable, he hired General Groves, the military man behind the Manhattan Project, to secretly go out and buy land in Orlando. In 1967, with some Disney magic, the Florida legislature passed a bill creating the Reedy Creek Improvement District (RCID)—a special taxing district covering the land where Walt Disney World would soon rise. The RCID gave Disney the powers of a municipal government: it could build roads, manage utilities, maintain emergency services, and regulate construction, all without asking permission from local authorities. At its peak, Disney essentially governed an area larger than San Francisco.

This autonomy helped Disney craft an immersive experience unmatched by any other theme park on Earth. There were no potholes, no zoning disputes, and no bureaucratic hiccups. Everything was on-brand, on time, and under control. Like the factory towns of old, Disney’s governance was largely accountable only to itself. Residents of the district (mostly Disney employees living in company-owned housing) had little say in decision-making. And unlike democratically elected city councils, the Disney-appointed board wasn’t answerable to voters, only to the corporation.

In 2023, Disney discovered that it had to answer to a higher authority when the cultural wars resulted in a feud with Florida Governor Ron DeSantis and the dismantling of Reedy Creek. A new state-appointed board took over, renaming it the Central Florida Tourism Oversight District. This political battle exposed the vulnerabilities of such an arrangement: when governance depends on corporate goodwill or political favor, it can evaporate overnight.

Technocratic Utopias

Starbase brings this experiment into the 21st century. Where factory towns were built on coal, chocolate and amusement,  Starbase is built on rockets and dreams of Mars. Like Reedy Creek, Starbase will likely provide its own infrastructure and services. However, like Pullman, it’s being established where SpaceX already owns most of the land and employs most people.

Critics, as to be expected, are wary. Environmentalists worry about unchecked expansion near ecologically sensitive Gulf Coast habitats. While civil rights advocates ask: if you are beholden to a company for work, shelter, and “public” services, can you truly dissent? 

Tech’s mantra of moving fast and disruption has come to urban planning: government is too slow, too messy, or too compromised to get things done—so let the innovators take over. And as with many of tech’s ideas, there is a kernel of truth, but do the ends justify the means? 

Globally, the idea of privately managed cities is gaining traction. In Honduras, the charter city of Próspera is “a startup city with a regulatory system designed for entrepreneurs to build better, cheaper, and faster than anywhere else in the world,” operating with its own legal system, separate from national law. As described by the NY Times,

“But the Delaware-based company that founded this experimental town in 2017 has raised $120 million in investments — including from venture-capital funds backed by the Silicon Valley billionaires Peter Thiel, Sam Altman and Marc Andreessen — to transform the territory, about twice the size of Monaco, into the most developed startup city in the world. …Próspera is a private, for-profit city, with its own government that courts foreign investors through low taxes and light regulation. Businesses can choose a regulatory framework from a menu of 36 countries or customize their own.”

As of this writing, like Reedy Creek and the State of Florida, Próspera has found its alignment with the government of Honduras somewhat shaky. That said, Prospera and perhaps, to a degree, Starbase are special economic zones or freeports. 

Special Economic Zones (SEZ)

While also called freeports or foreign trade zones, these are designated geographic areas within a country where normal trade, tax, and regulatory rules are relaxed or suspended to attract investment, boost exports, and stimulate economic activity. They provide: 

• Tax Incentives: Lower or zero corporate taxes, customs duties, VAT, or tariffs.
• Deregulation: Simplified administrative procedures and relaxed labor, environmental, or financial rules.
• Infrastructure and Export Support: Designed to promote manufacturing, assembly, logistics, and re-export businesses with a modernized supply chain infrastructure (ports, roads, warehouses, and digital connectivity) to attract global companies.
• Customs Flexibility: Goods can be imported, processed, and re-exported without incurring standard tariffs or needing to clear customs upon arrival.

The poster child of SEZs is Shenzhen, China; in 1980 a fishing village of 30,000. It was re-established as a freeport and has since grown to a metropolis of more than 12 million. It is considered the “Silicon Valley” of digital hardware.

These economic zones have their upsides and advocates. They attract foreign investment and create employment and regional development opportunities. More importantly, for businesses, they significantly reduce the friction of trade. However, vanquishing a business’s pain points comes at a cost; companies can exploit lax labor and environmental regulations to their advantage. That same “undersight” makes these zones prime money laundering and tax evasion areas. Consider this example from the art world. 

Russian billionaire Dmitry Rybolovlev purchased Leonardo da Vinci’s Salvator Mundi for $127.5 million. He promptly stored it in the Geneva Freeport, a tax-exempt Swiss warehouse that did not trigger import duties. Later, he transferred the painting to London where he paid the UK’s 5% duty rather than the Swiss 8%. However, real financial magic happened while the painting sat in storage from 2013 to 2017. Having paid the 5% import duty on the $127.5 million purchase price, the painting sold at auction for $450 million, representing far greater savings, roughly $16 million, in import duties. Freeports offer the wealthy new tax loopholes. 

Supporters of these corporate governance models point to efficiency, innovation, and economic growth. Disney World is one of the world’s most visited destinations. Starbase may someday be the Cape Canaveral of interplanetary travel. Charter cities could bring the rule of law and opportunity to places that have long struggled with corruption or stagnation.

Yet the dangers are clear. When companies control cities, they shape infrastructure, culture, rights, and power. History teaches us that good intentions are no substitute for accountability. Even the most idealistic factory towns turned sour when economic interests collided with human needs. If we are to revisit this model in the modern age, we must learn from the past. Urban planning should reflect not just how to build a city but who it is built for.