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Updated Feb 2, 2017, 6:05 pm Originally posted Feb 2, 2017, 3:41 pm
A judge ruled Thursday that Pima County violated state laws in not having its lease with World View appraised before signing an agreement to construct a facility for the high-altitude tech company. Judge Catherine Woods rules in favor of a Goldwater Institute lawsuit to block the lease. The building was completed at the end of December.
The conservative think tank sued in April over the deal, approved last January, claiming that the county also violated state and county procurement codes, with World View paying below-market rent and no competitive bidding having been done.
"The Court finds that there exists no genuine dispute as to any material fact" of Goldwater's suit, Woods wrote in her ruling, released Thursday. "Defendants did not obtain an appraisal of the land or building, publish notice of the proposed lease, set a minimum price, and/or hold a public auction prior to entering the Lease-Purchase Agreement with World View."
Pima County had agreed to build a $15 million office and manufacturing facility near Tucson International Airport and Raytheon Missile Systems for World View. The company will pay rent on the plant for two decades, with the county eventually slated to be repaid more than the construction costs and interest, officials have said.
Arguing that such economic development efforts weren't subject to the restrictions noted in the legal complaint, the county had sought to have the suit dismissed, but Woods declined to toss it out in August.
"Judge Woods' ruling protects Pima County taxpayers from having to foot the bill for World View's untested business model," said Jim Manley, a Goldwater attorney. "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."
"County administration is reviewing the ruling and will discuss it with the Board of Supervisors in executive session at its Feb. 7 meeting," said county spokesman Mark Evans. "Therefore the county has no comment at this time."
Pima County Supervisor Sharon Bronson said she would push for an appeal of the ruling.
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There are economic development projects across the state "that are at risk should this prevail," she said in an interview Thursday. "This puts everyone at risk."
While there may be conflicting statutes, "the one that the Legislature most recently enacted ... its intent was to allow us to improve the economy while protecting the taxpayers' pocketbooks," she said.
World View representatives declined to respond to a request for comment on the ruling. Supervisor Ally Miller, an opponent of the deal with World View, didn't respond to a request for comment.
The startup that plans to offer top-dollar balloon rides to the stratosphere as a marquee attraction for what will at base be an operation carrying scientific instruments and communications gear to high altitudes. Company representatives have said that World View has lined up government and corporate contracts to loft the instruments, including military and NASA applications. The deal with the county calls for World View to eventually employ 400 workers at the site.
Goldwater's suit maintained that World View plans a "an unproven, for-profit luxury adventure-tourism business" that will be facilitated by the county deal.
County officials have mocked Goldwater for focusing on the "space-tourism" aspect of World View's operations while not mentioning the expected economic impact of their plans.
"No reasonable person would argue that the stratosphere will, in the near future, replace Disneyland as a vacation destination for middle-class families. But providing affordable recreational opportunities for county residents, though a legitimate public purpose, is obviously not the public purpose the county is seeking to further in its transaction with World View," wrote Regina Nassen, a deputy county attorney, in an April letter to a Goldwater lawyer.
Although Supervisor Miller is named as a defendant in the suit, as are each of the other supervisors, the District 1 Republican worked behind the scenes with Goldwater on the suit before it was filed, documents she attempted to cover up demonstrate. Miller lost a 4-1 vote last January as the county board approved the contract. She was reelected to a second term in November.
Although Miller repeatedly denied any connection to the suit filed by the Goldwater Institute over the county's backing of the tech firm, her private message exchanges with a former staffer show otherwise.
In an April 4 memo to the Board of Supervisors, Huckelberry said that "it is clear... that the Goldwater Institute has joined forces with Supervisor Miller in her effort to defeat incumbent County Supervisors."
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Goldwater's letter to the county demanding a reversal of the January move to support the aerospace company was "filled with politically charged rhetoric that has no basis in fact ... it appears designed to influence the outcome of an election," Huckelberry wrote.
Miller told the Arizona Daily Star last year that the administrator's allegation was "ridiculous," and that she had no contact with Goldwater lawyers.
In April, a number of local business groups called on Goldwater to drop the suit, including the heads of of the Metro Chamber, Sun Corridor, SALC and Arizona Hispanic Chamber of Commerce.
"We believe that sound public-private partnerships are critical tools in fostering a strong climate for economic growth and new job creation throughout Arizona. A lawsuit stemming from Pima County’s project with World View Enterprises, Inc. not only could result in Southern Arizona forfeiting a hard fought economic victory but also unnecessarily would call into question our state’s capacity to grow its innovation economy," a letter from the business leaders said.
The letter was signed by Ron Shoopman of the Southern Arizona Leadership Council, Mike Varney of the Tucson Metro Chamber of Commerce, Steven Zylstra of the Arizona Technology Council, Gonzalo de la Melena of the Arizona Hispanic Chamber of Commerce, Joe Snell of Sun Corridor and Michael Keith of the Downtown Tucson Partnership: