JOB CREDITS MAY ELUDE SKUNK WORKS : PALMDALE'S HIRING INCENTIVE NOT AVAILABLE WITH X-33 PLANT'S LOCATION.

Byline: Jim Skeen Daily News Staff Writer

A Palmdale plan to offer up to $800,000 in hiring credits to Lockheed Martin Skunk Works for its X-33 project has hit a snag - the work is going on outside city limits.

The X-33, which Lockheed Martin hopes will be the forerunner of a new spaceship, is being built in a leased Boeing Co. hangar located in unincorporated Los Angeles County.

State redevelopment agency laws prohibit Palmdale from extending hiring credits outside city limits.

``We didn't know they would take the project outside the city,'' said Ron Creagh, Palmdale's assistant city manager.

Palmdale and Lockheed Martin are trying to determine how the city can assist the project. One possibility is waiving impact fees for the company as it adds and modifies buildings, Creagh said.

``All I can tell you is, we will sit down and work it out,'' Creagh said.

A Skunk Works official said he expects an agreement will be reached.

``They are going to resolve this one way or the other,'' said spokesman Ron Lindeke.

The idea of the $800,000 credit came about two years ago when Antelope Valley and state officials were scrambling to put together an incentive package to keep the X-33 project in California. At the time, California leaders were worried that New Mexico and Florida would lure the project away.

Palmdale officials proposed the $800,000 based on the idea that Lockheed Martin would create 400 new jobs in the city as a result of the X-33 program.

The X-33 is being developed under a $941 million National Aeronautics and Space Administration contract. The company is expected to invest $212 million of its own money in the program.

The X-33 is a 53 percent scale aircraft of a single-stage-to-orbit spacecraft - dubbed VentureStar - that the Skunk Works facility plans to build. The X-33 is expected to have its rollout in October 1998 and will conduct its first test flight from Edwards Air Force Base by March 1, 1999.

The X-33 itself will not go into space, but it is intended to lead to the production of a spacecraft that will lower the cost of putting satellites and other payloads into space from $10,000 a pound to $1,000 or less.

Launched vertically like a rocket from Edwards, the X-33 is scheduled to make 15 flights in 1999 to landing fields in California, Utah and Montana.