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Pima County to appeal World View lease ruling

By a 3-2 vote, the Board of Supervisors moved ahead Tuesday morning with an appeal of last week's ruling that the county violated state procurement laws in a 2016 build/lease deal with high-altitude tech firm World View.

County officials called the lawsuit "job killing" and noted that the Phoenix-based Goldwater Institute "ignored" similar economic development deals in Maricopa County.

A judge ruled last Thursday that Pima County violated state laws in not having its lease with the company appraised before signing an agreement to construct a facility. Judge Catherine Woods ruled in favor of a lawsuit by the right-wing Goldwater Institute to block the lease. The building was completed at the end of December.

The supervisors voted after conferring with lawyers in a closed-door session during a meeting Tuesday. During a public comment period, a parade of local business leaders encouraged the supervisors to pursue the appeal.

Against the appeal were Republicans Ally Miller, who also voted against approving the initial economic development deal last year, and Steve Christy, a newcomer to the Board who said he'd rather the county attempt to work out a deal with the plaintiffs before appealing.

Supervisor Richard Elias, who joined Sharon Bronson and Ramon Valadez in backing the legal move, said that while the appeal process plays out, the county would have time to negotiate with the conservative think-tank to reach an accommodation.

"While this lawsuit travels through the appellate courts, World View and the county will continue to operate as normal," County Administrator Chuck Huckelberry said in a statement released after Tuesday's vote. "World View has moved into the completed facility and begun paying rent."

Goldwater 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.

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"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.

"While Goldwater is preoccupied with killing jobs in Southern Arizona, they routinely ignore other economic development incentives in their own backyard," Huckelberry said.

Huckelberry pointed to build/lease deals between local governments and private businesses in Mesa (a $20 million manufacturing facility), Scottsdale ($25 million for aircraft hangers and offices), Gilbert ($37 million for a campus for private San Xavier University, which announced it would close after being open less than a year), and other cities in Maricopa County.

"Goldwater filed no litigation" in any of those cases, he said.

Goldwater representatives have said that no residents of those cities approached them with complaints about those deals.

World View has stayed relatively mum about the case. Last week, representatives declined to comment. Tuesday, in a written statement, the company said "it's important to note that World View is not a listed party in the lawsuit" and "those of us at World View remain focused on growing our company."

"Our broad-based business model encompasses both commercial and government markets. Our un-crewed Stratollite vehicle is now widely referred to as a revolutionary platform for high-altitude flight, scientific progress, and commercial access to space, and our space tourism platform will open a new market in the stratosphere and change human perspective for the better along the way," World View said.

Arguing that economic development efforts such as the deal with World View aren't subject to the restrictions claimed in the legal complaint, the county had sought to have the suit dismissed last year, 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."

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Pima County Supervisor Sharon Bronson said last week that she would push for an appeal of the ruling.

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.

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."

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:

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1 comment on this story

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Feb 8, 2017, 4:24 pm
-1 +0

Is there some reason other than her constituents’ collective mental density that Supervisor Ally Miller, a demonstrated liar not just on this occasion but on many others, isn’t turned out of office?  It’s remarkable that she hasn’t been charged by the district attorney with falsification of records and violation of her oath of office. Is Supervisor Miller specially exempt from the laws that govern the professional behavior of public officials and the rest of us in Pima County?  What a disgrace, to plot with hostile outsiders who’ve pilfered the Goldwater name the potential loss of jobs, a new industry, and a higher quality of life for Pima County’s residents. Ally Miller’s conscience must be as empty of substance as her political antics are damaging.

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