Advocates for the envisioned tech hub in Spokane likely will have to compete for federal funding again, after a $48 million commitment from the U.S. Department of Commerce was canceled last month.

It's the latest development in what has proven to be a roller coaster-like series of events for the consortium that wants to develop the American Aerospace Materials Manufacturing Center in west Spokane. The group has experienced the exuberance of beating out hundreds of proposals to be designated a federal tech hub, the disappointment of missing out on an initial round of funding, the elation of landing $48 million, and the disillusionment of having it taken away four months later.

Moving forward, however, the consortium is continuing to work toward its goal of creating a test bed for advanced aerospace materials at the 386,000-square-foot former Triumph Composite Systems Inc. building at 1514 S. Flint.

“Our public-private partnerships and critical equipment plan remains in place,” says Lakeside Cos. CEO David Weeks in an email sent to consortium members.

Lakeside Cos. owns the old Triumph plant and is leading the Inland Northwest tech hub effort. A representative of the company didn’t respond to the Journal’s requests for comment.

Spokane Mayor Lisa Brown echoes Weeks' statement, saying that the tech hub work is continuing. The city of Spokane is one of over 60 member organizations in the Inland Northwest consortium that's behind the local tech hub efforts.

How those plans will be funded, though, is now unclear.

"If there’s a competition, we will compete,” says Brown, who describes the cancellation of funding as an unnecessary setback. “I don’t think any of the partners are going to stop working to build out the potential, to create the test bed that was part of the tech hub, procure the equipment that we need, and keep moving forward.”

Other member organizations include Gonzaga University, The Boeing Co., Collins Aerospace, Blue Origin, NASA, Lockheed Martin, the U.S. Air Force, Washington State University, Avista Corp., Spokane International Airport, and a variety of other aerospace and industry leaders, national laboratories and agencies, higher- and secondary-education institutes, school districts, venture development groups, workforce development organizations, government entities, tribes, and economic development organizations.

On May 16, Commerce Secretary Howard Lutnick released a statement announcing the rescission of funding for the Inland Northwest tech hub and five other tech hubs across the U.S. that were told they would receive tens of millions of dollars in January.

“Regrettably, on its way out the door, the prior administration announced awards to six tech hubs, even though the funds were not yet available,” the statement reads. “Moreover, the process was rushed, opaque, and unfair—administration officials did not make prospective applicants aware of the competition and chose awardees using outdated applications submitted nearly a year earlier.”

Lutnick’s comment about administration officials not making prospective applicants aware of the competition conflicts with a July 2, 2024, press release from the U.S. Economic Development Administration that stated, “If subsequent funding becomes available, EDA plans to invest in additional tech hubs, keeping this innovative program’s momentum going for decades to come.”

Brown says, “It’s not clear to me that there was any impropriety in how that was done.”

Nevertheless, Lutnick’s statement also announces Commerce is revamping the tech hubs program and creating a new competition for the 19 designated tech hubs that didn’t receive funding in the initial July 2024 funding round, including the Spokane-Coeur d’Alene tech hub.

Selections of tech hubs to receive funding from the new competition are expected to be announced in early 2026.

“We will be applying for it, but a year delay could mean that even if we were awarded the funding, it could be late compared to some of our international competition,” Brown says.

She adds, “It jeopardizes our ability actually to have that manufacturing happen in the United States.”

Rep. Michael Baumgartner, a first-year Republican congressman who represents a large swath of Eastern Washington, expresses his disappointment in the decision to cancel the funding for the Spokane-Coeur d’Alene tech hub, and says he’s had several conversations with Commerce, including with Lutnick. He says he was told by Commerce there were other jurisdictions that didn’t feel like they got their chance to put their best foot forward.

Even so, he says, “I feel confident that Spokane and the Inland Northwest will be well positioned to reapply and be successful in the months forward." 

While some local and state leaders, including Brown and U.S. Sen. Patty Murray (D-Washington), have called for a reversal of the decision, Baumgartner says there has been no indication that Commerce’s decision will be reversed, and that the Inland Northwest consortium will have to compete for the funding again.

“I was given positive indications from Secretary Lutnick that it would be fair competition and that we would have a good chance to be successful,” he says.

As outlined in Commerce’s Tech Hubs Program Fact Sheet, the six tech hubs that had their funding canceled will be provided “heightened consideration” in the new competition.

In the new competition, the 19 possible applicants are asked to remove references to policy priorities of the Biden administration, including those that contradict President Trump’s executive orders on diversity, equity, and inclusion and energy, as well as references that prioritize unions.

Baumgartner, who hasn’t been involved with the consortium throughout the years-long tech hub process, says he’s had good conversations with U.S. Sen. Maria Cantwell about the issue and will work with some of those involved going forward.

“It’s an executive branch process, but we just want to be as supportive as we can,” he says.

Brown says she can’t speak to exactly what would happen if the Spokane-Coeur d’Alene tech hub misses out on funding through the new competition, and whether the consortium would seek funding elsewhere, but she points out that private investment is a key part of the tech hub's plans.

She notes that companies that would potentially be contracting with the Inland Northwest tech hub would also play a part in what happens.

“There’s just a lot of different organizations that are going to be making their own decisions,” Brown says.

At the local level, the loss of the federal funds could have an impact more profound than the loss of federal funds.

In February, following the announcement that the Spokane tech hub would receive federal funding, outgoing Gonzaga President Thayne McCulloh told the Journal that he wouldn't be surprised if new companies entered the Inland Northwest market.

“There were queries almost immediately from entities like Blue Origin and other companies,” McCulloh said.

The impact beyond the Inland Northwest is also significant.

“This is an international competition to develop the materials that are going to go in the next generation of aircraft in the world, and it’s that lighter, stronger, more sustainable material work that we are hoping to do here in the test bed,” Brown explains. “And in order to do that, you have to procure some major pieces of equipment, and that needs to be financed one way or the other, and if we don’t get it, somebody else will, and somebody else will reap the economic advantages of being ahead of us.”

McCulloh told the Journal that there's a lot of competition from China and Europe in the race to produce thermoplastic composite aerospace parts.

“The question is not if they’re going to be produced; it’s just ‘Who’s going to be doing them?’” he said.

The plan for the $48 million grant was to purchase equipment that can produce the thermoplastic composite aerospace parts at a scale that doesn't exist in the U.S.

The proposed American Aerospace Materials Manufacturing Center was designated as a tech hub in October 2023. The proposal was one of 387 nationwide that sought the federal tech hub designation. Just 31 proposals were selected.

Being designated as a tech hub allowed the Inland Northwest consortium to compete for the funding in the second round of the tech hubs program.

In July, the consortium missed out on a portion of over $500 million in funding, as 12 other proposals were selected.

In January, it was announced that the envisioned Spokane-Coeur d'Alene tech hub would receive $48 million.