Stung by Raytheon Missile Systems' decision to build a new missile facility in Alabama rather than Tucson, Pima County and Tucson are drafting plans that could put up as much as $40 million to help Raytheon stay and expand in Tucson.

Raytheon is the region's largest overall employer and is by far its largest private employer.

Most of the $40 million is planned to come from a county bond election that won't occur until at least 2012. The remaining money would be $2 million from several county funds and $8 million that Tucson will receive from an annexation agreement with Raytheon approved in 2009.

Raytheon would need to agree to have the $8 million from the city's annexation be used to buy land surrounding its plant, said Byron Howard, a city special-projects manager.

About $8 million of the plan would go toward buying land south of East Hughes Access Road - which is owned by developer Don Diamond along with First Tucson Airport Investors and the Tucson Airport Authority.

All the land would serve as a "buffer" from urban encroachment around Raytheon, said Pima County Administrator Chuck Huckelberry. The hope would be that Raytheon would eventually lease or buy the property to expand its facilities there, he said.

But to properly expand into the area, Raytheon would need to have Hughes Access Road shut to the public, which means reworking the road system in the area south of Tucson International Airport, Huckelberry said.

Fixing the roads would be the major expense in the plans, which could take two years to finalize. There are two options, although city and county officials said they prefer the more expensive option.

The options:

• Shut down Hughes Access and extend South Alvernon Way to East Old Vail Connection Road and expand and improve Old Vail to carry the Hughes Access traffic. Cost: $16 million.

• Divert South Alvernon Way to the southeast so it will no longer cut across the future location of a third runway for Tucson International that the airport could build 20 to 40 years from now. Alvernon Way would travel to the southeast until it connected to the alignment of South Craycroft Road - where Craycroft would be if it extended that far south. The current alignment of South Alvernon would be closed as would portions of South Swan Road along with Hughes Access. Old Vail would be improved and expanded. Cost: $31 million.

City and county officials prefer the more expensive option because they don't want to improve and extend Alvernon only to close it in the future if the airport adds a third runway.

City Councilman Steve Koza-chik said the cheaper option is "almost throwing good money after bad."

Huckelberry said the first option would be a quick fix, but wouldn't solve problems in the long run.

"It's probably the cheapest, but it would ultimately be obsolete," Huckelberry said. "I always believe in doing it right the first time."

Taxpayers need to help facilitate Raytheon's expansion because one of the reasons Tucson lost out to Huntsville, Ala., for Raytheon's new missile facility is that Raytheon didn't have enough room at its south-side site here, Huckelberry said.

When it awarded the new facility to Huntsville - which will employ an estimated 300 workers at an annual average wage of $60,000 - in July, Tucson was a finalist. But the company said Tucson was bypassed because of limits to expansion at Raytheon's current missile plant and a lack of development-ready alternative sites.

Richard A. Mendez, Raytheon's director of facility management, told the City Council that Raytheon is confined in a box where it is now, which causes problems for the company and limits potential expansion.

"Our existing condition is a constant state of risk," he said.

Joe Snell, chief executive officer for Tucson Regional Economic Opportunities (TREO), said the city, the county and the whole region need to think big in order to make sure Raytheon stays and expands in Tucson. He said Raytheon brings billions into the local economy but that "we're treating them like a street vendor."

Local governments should think even bigger than the $40 million plans and help attract more defense contracting to Tucson, Snell said. The biggest impediment to Raytheon's expansion, he said, is the region's lack of a large class of high-paying jobs that can help it attract top talent to Tucson. Spouses and even Raytheon's recruits want to see high-paying jobs in the region to ensure there are options if they choose to move to Tucson, he said.

"If Raytheon leaves, we're cooked," Snell said. "This is our economic engine."

Contact reporter Rob O'Dell at or 573-4346.