Pima County is on the defensive and investors are spooked after the Goldwater Institute threatened legal action over a $15 million lease with a high-altitude balloon company.
The county Board of Supervisors plans to hold an executive session Tuesday to discuss the allegation that the county violated the state constitution’s “gift clause” by agreeing to build facilities for use by Tucson-based World View Enterprises.
In response, county Administrator Chuck Huckelberry sent a four-page memo to the supervisors on Monday blasting the assertions in the letter as “false, misleading and libelous statements.”
State law prohibits governments from subsidizing or extending credit to private entities unless the entity provides a proportional public benefit, James Manley, senior lawyer at the Goldwater Institute, wrote to the county. “This agreement serves no public purpose,” Manley wrote.
“World View will charge $75,000 for balloon rides to the stratosphere — three times the average per capita income in Pima County.
“This is beyond the reach of most residents, and will only benefit extremely wealthy passengers and World View itself — if it ever begins operation — at taxpayers’ expense.”
Manley asked the county to respond by April 8 or face a “constitutional and statutory challenge by County taxpayers to enjoin these illegal expenditures.”
The county supervisors approved an economic development agreement in January to spend $14.5 million on a 120,000-square-foot corporate headquarters and manufacturing facility and another $500,000 on a balloon pad on Aerospace Parkway south of Raytheon Missile Systems and the Tucson International Airport.
“Contrary to statements made by Goldwater and others, the County is not loaning money to World View, nor is it building a facility and ‘giving’ it to World View,” Huckelberry wrote. “It is building a County-owned facility on County-owned land that will be leased to World View.”
Taxpayers stand to gain $4.2 million by the time World View makes its final rent payment, Huckelberry wrote.
After the Goldwater letter was sent, 20 percent of orders for certificates of participation, totaling $3.4 million, were withdrawn. The certificates allow investors to receive part of the lease revenue.
The county was able to sell those certificates to other investors, but is still about $1 million short.
Huckelberry noted the Goldwater Institute letter did not mention the fact that World View also conducts research for NASA and other federal agencies, universities and at least one aerospace company.
In his letter, Manley also objected to the emergency declared by the supervisors to expedite approval of the lease agreement.
The Goldwater Institute said in a March 30 news release that the county “consulted in secret” with contractors for six months before seeking approval to sign contracts with them.
“The County simply set an expedited timeline, and then used that deadline to claim that there was insufficient time for legally mandated competitive bidding,” the news release said.
During negotiations with the county, World View told the county that the spaceport would create more than 400 high-paying jobs. But Manley said the jobs World View promised “provide no direct benefit to the County, or its residents.”
Huckelberry alleged in his memo that the Goldwater Institute has “joined forces” with Supervisor Ally Miller “in her effort to defeat incumbent County Supervisors.”
Miller called that allegation “ridiculous,” noting she has had no contact with Goldwater Institute lawyers. She objected to the World View deal when the supervisors voted 4-1 in January to approve it.
She countered that the promotion of the World View project is “politically charged” as her fellow supervisors try to show they’re making an effort to develop the Aerospace Parkway area.
Miller agreed with Manley that the expedited approval process, made possible by declaring an emergency, violated the county’s procurement process.
County staff should not have sold any of the certificates before the supervisors had a chance to discuss the ramifications of the Goldwater Institute letter, she said.
“I don’t think the Goldwater Institute is making idle threats,” Miller said.
World View was founded in 2013 by Jane Poynter and Taber MacCallum, original crew members in the Biosphere 2 experiment. Veteran NASA scientist Alan Stern and astronaut Mark Kelly also work for the company.