A $15 million financing plan for a near-space travel firm will be discussed Tuesday by the Pima County Board of Supervisors.
Last month, the board approved a plan to build a 120,000-square foot facility and space port on a county-owned 28-acre parcel south of Tucson International Airport.
“The World View COPs investment is an investment in our region’s economic future; something that has proven to be economically beneficial to the County, based on our investments in Ventana Medical Systems, HomeGoods, Accelerate Diagnostics, and a number of economic development job-creating opportunities,” Pima County Administrator Chuck Huckelberry wrote in a memo to supervisors.
The term COPs refers to Certificates of Participation, which is the financial instrument the county proposes using to fund construction costs.
This type of financing doesn’t require voter approval. The county would borrow against an asset to fund the project.
Buildings or other physical assets are frequently held as collateral, but that’s not the case now because the COPs are being bundled with others to fund a sewer project and a refinancing of existing COPs from the county’s purchase of the Bank of America Building downtown, Huckelberry wrote.
The $15 million for the World View construction would be paid off in 15 years.
“My sense is they are going to be successful,” said Supervisor Richard Elías. “They have real contracts and do real work.”
World View designs and builds high-altitude balloons that carry manned capsules into a low-space orbit.
They plan to increase the space tourism portion of their business as well as a research component where the company brings scientific payloads into low orbit for researchers.
The company has said it already secured a more than $45 million contract to conduct research for NASA in addition to other contracts with universities and researchers.
Its contract with the county would require World View to pay back the county’s $14.5 million investment in construction of the building over 20 years of lease payment, totaling more than $23.6 million.
The company could purchase a portion of the property at the end of the term, excluding the spaceport, which would be a county asset open for use by other operators.
Company officials agreed to have it grow to at least 400 employees by the end of the term, most earning at least 150 percent of the average regional salary.
“This is the future of economic development,” said Supervisor Sharon Bronson.
Bronson also said she understands residents might have misgivings about the county taking on the debt associated with the construction, but noted tax increases would not be used to pay down the new debt.
Elías said he sees the county investment as a wise move to help the local economy. He compared the plan to the county’s agreement with Accelerate Diagnostics, which leases laboratory space in a county building.
The company has been required to meet employment and facilities improvement benchmarks, which it has done.
A contract renewal for Accelerate Diagnostics also is on the supervisors’ agenda for Tuesday.
“I think Accelerate is a good example of being forward-thinking in how you invest in getting companies to come here,” Elías said.
He noted that previous agreements local governments made with companies such as Raytheon and its predecessor Hughes Aviation involved tax breaks or rebates, which he said were less beneficial to the community because they ultimately cost government more.
On March 8, the Tucson City Council could vote on an incentive package for World View that includes paying for some utility infrastructure.