Aerospace and defense companies continue to be one of the largest industries hoping to win big economic incentives from Colorado.

The Colorado Economic Development Commission approved more than $14.5 million in job growth incentives tax credits on Thursday, with nearly all of it going toward military and space companies.

The largest tax package went to an unnamed company called “Project Mercury.” The EDC doesn’t disclose company names to protect the confidentiality of businesses that may be considering incentives from other states Colorado is competing against.

The company was awarded $11 million in job growth tax incentives and another tax package worth up to $8.6 million under the “Creating Helpful Incentives to Produce Semiconductors (CHIPS)” program.

Project Mercury is an aerospace and defense government contractor with nearly 5,000 employees in Colorado and 100,000 worldwide. It’s looking to expand its space division to support growing demand for defense and space technologies and it’s considering expanding in Broomfield.

The project would be a $194 million capital investment and would create 600 new jobs for the state over eight years, said Daniel Salvetti, the state’s leading semiconductor economic development official. 

The description closely matches BAE Systems, which acquired Ball Aerospace in 2024, which had more than 5,200 employees in Colorado at the time of the sale. BAE Systems has more than 110,000 employees globally, according to its website.

The company’s Space & Mission Systems division is based in Broomfield. The company didn’t respond for comment by the time this story published.

Getting this project would be big win for the state’s standing in the industry, Salvetti said.

Project Mercury is also considering Ohio and Texas and he added those states are putting together “substantial” incentives.

Semiconductor and science tax credits are running out after a few big incentive packages

Colorado is limited in how much CHIPS tax credits it can award each year: $15 million to be exact. 

The company asked for $15.3 million and state economic officials landed on $8.6 million. There’s only $2.6 million left for the 2026 fiscal year, so the rest of it will have to come from 2028’s pool of funding. 

The EDC also approved earmarking $15 million from 2027’s allocation in December for another major aerospace expansion called “Project Ladybug” projected to create 1,850 new jobs. That company also got $8 million from 2026.

Yet, the state wanted some extra guardrails for awarding a large CHIPS tax package years in advance that could limit how much other companies interested in Colorado could get. The CHIPS tax credits will be dependent on the company sending a commitment letter to the state economic agency by April 1, 2027, or else all the money will return to the pool. 

“We’re getting to a point where there’s a lot of fluctuation,” Salvetti said. “We know that we’re going to bring back some credits from some earlier approvals, but again, we don’t know how much and we don’t know the exact timing at this point.”

The other space company from December could also turn down Colorado and give back the full $23 million in credits and other companies as well could bring more money back into the pool. Still, he added the pipeline is “strong” and several future projects interested in the state may need to have similar arrangements as Project Mercury has.

One of several out-of-this-world packages in the last few months

Colorado, which is a major aerospace hub, has been doling out some of its largest incentives to space and defense companies in the last year — a sign of how the industry is still one of the largest economic drivers as the state struggles with both luring new companies and losing already existing businesses to other states.

The EDC awarded $35 million in job growth tax incentives to Project Ladybug. “Project Hera,” a technology company in aerospace, got approved for $26 million in incentives in April, with additional financial support from Douglas County.

Both of those tax packages were designed to help keep major aerospace companies in the state.

A second unnamed defense company under the title “Project Swift” was awarded $2.7 million on Thursday.

The company, based in Los Angeles, specializes in interceptor systems to counter medium to large drones. It’s looking to expand its internal research and development division and build a low-rate production facility for tactical solid rocket motors, according to the EDC.

It’s considering expanding to Arapahoe and Weld counties in Colorado, as well as Arizona, New Mexico and Utah.

The expansion could add 171 new jobs over eight years.

There’s a few other projects getting tax incentives, though much smaller

Two other projects not in space or defense also won tax incentives this month. 

Project Blaze, a manufacturer of waste handling equipment for commercial bin haulers, is considering expanding to Colorado Springs, which would add 35 new jobs. The company is also considering Arizona, New Mexico and Texas. The EDC awarded it nearly $250,000 in job growth tax credits. 

Project Quinn, a manufacturer of cross-laminated timber that acts as an alternative to steel and concrete in construction, was awarded nearly $365,000 to come to Colorado as the company looks to expand across the Western U.S. It’s considering expanding to Boulder, which would add 24 new jobs for the state, or Oregon.

State economic officials said this expansion would bring the state its first industrial-scale manufacturer of mass timber in Colorado or in any neighboring states and would help with efforts to decarbonize construction and wildfire prevention.