Citing the need for a larger and more-centralized storage space for personal protective equipment and an eventual coronavirus vaccine, Pima County has acquired a 43,500-square-foot warehouse downtown that housed a failed space technology startup.
The $3.4 million purchase of the warehouse at 350 S. Toole Ave. was approved by the Board of Supervisors during a meeting this week, with the added agreement that the county will renegotiate a lease with what, if anything, is left of Vector Launch Inc., the micro-satellite launch company that declared bankruptcy earlier this year.
Pima County Administrator Chuck Huckelberry told the supervisors the purchase was important because the Health Department has had to add staff and enlist the help of the National Guard to help acquire and transport 1,200 pallets of personal protective equipment between its current two sites, a main location on South Apache Park Place and Thurber Hall at the Pima County fairgrounds.
Huckelberry said the county balked at an estimated $9 million to build a site before settling on the warehouse owned by the Levin Family LLC because of its delivery docks, refrigerated storing and high ceilings. General fund money freed up by reimbursed costs from the CARES Act was used to pay for the warehouse.
“This particular site is the only site that met all of the requirements,” Huckelberry said.
Bailout or relaunch for Vector?
Republican Supervisors Steve Christy and Ally Miller pushed back on the purchase, with the former saying he believes there are other adequate county facilities that can be used.
“It’s another element of the county buying up property that I don’t think is appropriate,” he said.
Miller expressed concern about the lease with Vector Launch, saying the county should not compete with private sector developers in providing commercial real estate.
She said the deal “is strictly for” Vector Launch, which had reached an agreement with the county in 2016 to lease land to build a 60,000-square-foot warehouse south of the Tucson International Airport, but never completed construction.
Vector Launch, which was founded in 2016 by a group that included SpaceX alumnus Jim Cantrell, had filed for bankruptcy in February. Portions of the business were purchased by aerospace giant Lockheed Martin, while the remainder was purchased by a company called TLS Bidco for $1.2 million in May, court records show.
Huckelberry called Miller’s assessment “not even close.” The initially proposed leased terms would not extend longer than 18 months, with a market-rate rent and the company reducing its leasing space to about one-third of its current use.
Huckelberry said TLS Bidco, which has ties to Pennsylvania, came to Tucson a few months ago with the intent to close the operation, but said it is reconsidering, and is hoping to “reestablish the business” in Tucson, with the hopes of keeping 100-200 jobs.
“The purchaser has decided that perhaps staying in Tucson was the best option,” he said. “Our view is that it’s perfectly appropriate. … Our preference was to have the business remain in Tucson and be successful.”
Mike Levin, the previous owner of the warehouse, said Vector Launch was still in there at the time of sale and was still paying the lease. He added that they weren’t looking to sell the warehouse until they were approached by the county about its purpose.
“They approached us about it,” said Levin, who is also the owner of the Port of Tucson. “We looked at it all of it and it sounded like a good possibility.”
Representatives from TLS Bidco did not respond to a message seeking comment.
Using CARES act money
While the money for the warehouse purchase comes from the general fund, Huckelberry said that it was made possible by dollars freed up by the CARES Act and other federal funding.
As of July 7, the county had committed to spending or spent $122 million to curtail the spread of the virus in Pima County, which includes payments for testing, contact tracing and personnel costs. The county had a total of $98.4 million to spend, forecasting a potential $35 million deficit.
Despite the projected shortfall, Huckelberry said “we’re not banking on” more CARES Act dollars coming to the county and other municipalities, in the form of another federal stimulus bill, but that “we’re certainly hopeful.”
He said that hope stems from the fact that the pandemic has “underscored the importance of public health agencies,” and that the county has future plans to be more strategic in tackling public health issues.
Those plans include the warehouse, which Huckelberry said could have a use well past the end of the pandemic for things like the flu shot, child immunizations or other solutions to issues like health disparities faced by different demographics in the county.
“There’s going to be a lot more discussion about the role of our public health agency in the future,” he said.
Contact reporter Justin Sayers at firstname.lastname@example.org or 573-4192. Twitter: @_JustinSayers. Facebook: JustinSSayers.