Arizona court kills local government’s real estate deal for World View

The Arizona court of appeals last month ruled that a land deal between Pima County and the high altitude balloon company World View was unconstitutional, and could not go forward.

Per the agreement, the county would fund the construction of facilities, including a 135,000-square-foot manufacturing facility, with office spaces and a launch pad, on property it already owned. World View would then lease the property from the county for 20 years. In return, the company would hire more than 400 employees, with an average salary of over $55,000, and spend $32.3 million on equipment.

Twenty years of lease payments were expected to total around $14 million, estimated to be the property’s value at that time. World View would then have the option to buy the facility for $10.

Six years ago the Goldwater Institute sued, saying this deal was illegal according to the state’s constitution. Last month the court agreed, killing the deal.

Since World View remains in operation in these facilities, Pima County will have to renegotiate at market rates. How that will effect the company itself, which now hopes to begin flying near-space tourist flights by 2024, charging $50K per person, remains unknown.

Democrats in Pima County vote to appeal World View court decision

The Pima County Board of Supervisors in Arizona has voted 3-2 on a party-line vote to appeal a judge’s decision that canceled the county’s deal with the space tourism balloon company World View because it violated state law.

The Pima County Board of Supervisors voted 3-2 to appeal a Superior Court decision which concluded the county violated state law when it signed an agreement and lease with World View, a space exploration company located near the Tucson International Airport.

The vote was along party lines, with the three Democrats voting for the appeal and the two Republicans voting against it.

The court ruled the county did not comply with a law which requires the county to appraise the property, hold a public auction, and negotiate a fair rental price before it agreed to build a $15 million complex for the company.

It seems to me that — rather than fight this in court — the smart thing to do here is to work out a new agreement that does not violate the law, something that the county was able to do with its lease agreements with Vector Space Systems. This apparently was what the Republicans on the board were proposing. Instead, the Democrats have chosen to fight, even though that will delay things further and is likely to fail in court anyway.

Judge strikes down Tucson/Worldview spaceport deal

A deal between Pima County in Tucson Arizona and the space tourism balloon company World View has been struck down.

The Tucson judge sided with the libertarian Goldwater group, which argued Pima County ran afoul of state rules governing subsidies and incentives to businesses. “Judge Woods’ ruling protects Pima County taxpayers from having to foot the bill for World View’s untested business model,” said Jim Manley, senior attorney at the Goldwater Institute. “Instead of relying on a sweetheart deal from taxpayers, World View will need to pay market rates to lease its building, just like every other business in Pima County.”

Goldwater attorneys didn’t like that Pima County approved the deal without a popular ballot measure and that the deal was done without an appraisal. Goldwater also argued the lease deal was for less than market rates for a custom building. “The county is free to renegotiate the lease,” said Manley, “but only after they appraise the building, hold a public auction, and lease the building to the highest bidder. All of that will protect taxpayers from illegally subsidizing a private business.”

As much as I want this business to thrive, I think the Goldwater Institute was right. Pima County violated numerous laws and even some parts of the state constitution putting together this deal. Even if there was no corruption here, it opened the door to future backroom corruption if the deal was allowed. Now, I expect World View and the county will have to renegotiate.

Why the Goldwater Institute sued to block Tucson space deal

Link here.

The fundamental reason is that the Institute believes that, in signing its deal with World View to build its headquarters and launch site in Tucson, Pima County violated several laws as well as Arizona’s constitution. We are supposed to be a nation of laws, and thus government officials should not be allowed to violate those laws, even if they have the best of intentions.

I must say that, though I have no doubt that putting World Views space tourism balloon company in Tucson would be financially good for the city and Arizona, allowing elected officials to break the law to make deals with private companies is a very bad way to do it, and will in the end lead to far worse consequences.

Pima county files motion to dismiss World View lawsuit

In the heat of competition: The Arizona county government that made a deal with the space tourism balloon company World View to help them build their launch facilities in Tucson has filed a motion to dismiss the lawsuit by the Goldwater Institute that claims the deal is illegal.

I don’t know if the deal was illegal, but I suspect that even if it was the county will win and the deal will go through. Too much money at stake.