Taxpayers in Pima County, Ariz., have filed a lawsuit challenging county officials’ decision to subsidize a private company’s space tourism business.
“Pima County has agreed to give $15 million in taxpayer money to a private company that’s a space balloon business,” Jim Manley, a senior attorney at the Goldwater Institute, told The Daily Signal. “Basically the intention of the gift is to allow the company, World View, to expand into tourism.”
Pima County officials negotiated a $15 million agreement with World View Enterprises, Inc., for the county to build a facility, including a launch pad for high-altitude ballooning, for World View to lease for 20 years. This happened despite Pima County voters, located in the south central region of Arizona, recently rejecting ballot measures that proposed hundreds of millions of dollars slated to go toward tourism and economic development.
In November, the voters rejected, by a two-thirds vote, proposals that included $98 million for tourism promotion and $91 million for economic development and workforce training, according to Goldwater Institute, a Phoenix, Ariz.-based public policy think tank.
Goldwater Institute filed the lawsuit in the Pima County Superior Court last month against the county administrator and the five representatives on the county board of supervisors.
“The county turned around and negotiated in secret with this company, World View, to give them this grant to build World View a new headquarters and a balloon pad where they can launch these larger balloons that will be necessary for tourism,” Manley said.
“Even for folks who are in favor of the government getting involved in economic development and giving handouts to corporations, even those folks are concerned about this deal because it was all done in secret.”
In January, the Pima County Board of Supervisors voted 4 to 1 to approve the $15 million contract deal to build Spaceport Tucson and the company’s new headquarters in Tucson, Ariz.
“The county in return for this subsidy is getting below market red payments on the headquarters and a promise of more jobs,” Manley said. He noted that the company will use the balloon pad free of charge.
The county will finance, own, and build the facility for World View to lease and use, a statement from County Administrator Chuck Huckelberry says.
“The World View deal violates the state constitution and state law,” according to a press release from Goldwater Institute. “The Arizona Constitution makes it illegal for the County to ‘give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any … corporation.’”
County officials have said their actions were within the law. A spokesman for Huckelberry directed The Daily Signal to a statement Huckelberry wrote (and sent to the Board of Supervisors to utilize for media requests for comment on the litigation):
In drafting the economic development agreements with World View, the county followed all of the enacted Arizona laws related to economic development incentives.
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If World View defaults, the county will retake possession and control of the building and land and lease it to another employer or use the building for other County purposes.
County Supervisor Ally Miller, the lone supervisor to vote down the deal, wrote in a letter to Pima County citizens that she “strongly objected” the deal with World View.
“I believe Pima County should be focused on funding core services such as road repairs and step increases for the Sheriff deputies,” Miller, a Republican, wrote. “Investing in a high-risk private sector company isn’t the business of county government.”
Huckelberry says that after the lease is up, World View will pay $4.2 million more than the county is spending on the building.
The facilities will consist of a high-altitude balloon spaceport, with a 700-foot diameter reinforced concrete pad for World View to launch high-tech balloons up 100,000 feet, almost 20 miles high atop 99 percent of the earth’s atmosphere.
“The helium-filled balloon is lighter than air and, like ice floating on water, it literally floats above our planet’s atmosphere,” according to World View.
The company will also be housed in new headquarters. Pima County will spend $500,000 on the balloon pad and $14.5 million on the corporate headquarters, the Arizona Daily Star reported.
World View’s website says it is “pioneering a new frontier at the edge of space.” Currently, an “early bird” ticket costs $75,000 per ride for the ballooning experience. A total trip will last four to six hours in a fully pressurized capsule, fit for six individuals and two crewmen.
“We’re leading the way in the emerging stratospheric economy,” World View’s about page says.
“Our company was built on a vision to broaden human perspective by taking Voyagers on the journey of a lifetime (be they private individuals or those traveling for research, educational or other scientific pursuits.)”
A World View spokesman declined to comment on the lawsuit, but in an email told The Daily Signal that World View is on track for an estimated November 2016 move into the new facilities. Over the next few years, they expect local job creation to be around 450 people, the spokesman said.
“The only public purpose that the county has identified here is economic development,” Goldwater Institute’s Manley said.
“For the first 18 years, the county is underwater. World View is getting subsidized rent from the county. In the last two years, the county recoups its investment if World View makes it that long-if the economic conditions are in their favor for the next 20 years,” Manley said. “It’s a huge amount of risk. The county is constantly accused of not maintaining its roads and basic infrastructure. Meanwhile, they seem to have enough money to give away $15 million to a private company through the form of this sweetheart lease.”
