The ladies and gents of Rio Nuevo and the City of Tucson came under fire when they took contaminated land off the hands of Gabby Giffords’ family and now it appears that the ladies and gents of the Pima County Board of Supervisors are going to give a hand to her hubby’s company, World View Enterprises, Inc.
The project has been given a “codename.” Codename Curvature – that is, according to a memo from Pima County administrator Chuck Huckelberry, also known by the codename King Chuck.
King Chuck is hoping – no he knows – that the majority on the Pima County Board of Supervisors, will approve the deal – that to some – appears to be a violation of Arizona’s Gift Clause. That clause (Article 9, Section 7) reads: “Neither the state, nor any county, city, town, municipality, or other subdivision of the state shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation, or become a subscriber to, or a shareholder in, any company or corporation, or become a joint owner with any person, company, or corporation as to such ownerships as may accrue to the state by operation or provision of law or as authorized by law solely for investment of the monies in the various funds of the state.”
This is exactly what King Chuck wants to do for astronaut and Giffords’ hubby, Mark Kelly, and his crew at World View Enterprises.
However, Huck is calling the loan an “incentive.” According to Applied Economics,’ Economic and Revenue Impacts of Project Curvature on Pima County report, prepared for Pima County: “A.R.S. 9‐500.11 provides some guidance by analogy. In transactions that are subject to that statute, it is required that any proposed tax incentive raise more revenues than the amount of the incentive within the duration of the agreement. The second component of A.R.S. 9‐500.11 requires that the project would not have occurred in the same time, place or manner in the absence of a tax incentive. The Project Curvature would satisfy both of these requirements, whether or not applicable. The proposed incentive will allow the company to expand and produce long term benefits for the region.”
It is unclear as to why Applied Economics refers to the deal as a tax incentive
The report also fails to note that the County will be paying for construction.
Instead it only notes: “They [World View] would lease land and cause the construction of a new 135,000 square foot building.”
According to Huckelberry’s memo, “As part of the County offer and incentive for World View, the County has proposed to construct a 120,000 square foot steel frame facility to accommodate light manufacturing operations on approximately 12 acres. The facility will include a 15,000 square foot mezzanine within the overall structure for office and support operations, for a total of 135,000 square feet of leasable space. The worksite will include parking and storage, as well as a 700-foot diameter launch pad. The total cost of the new facility – including all permitting fees, fees to be paid to the City of Tucson for transportation, impact, payment for fixtures, furniture, equipment that are affixed to the structure – as well as facility construction is estimated to be $15 million and will be limited to no more that $15 million – $14.5 million for the manufacturing and administrative building and $500,000 for the space port.
“In our proposal,” continues Huckelberry, “the County will finance this facility to be repaid by World View through annual leas and/or rent payments. The Lease/Purchase Agreement and legal description are Attachment 4 to this memorandum. Annual lease and/or payments are identified in Table 1 below and are compared with the County financing of the capital facilities, which will be through a 15-year Certificate of Participation financing agreement. The lease payments from World View will be over a 20-year period, with an option to purchase.
According to Applied Economics’ report, for its $15 million investment, World View might create 448 new jobs in Pima County over the next 20 years, and generate $10.7 million in revenues for Pima County:
20 Year Revenue Impacts* Revenue Impact to Pima County $10.7 M Revenue Impact to City of Tucson $5.6 M Revenue Impact to Other Local Governments $16.4 M *Includes direct and indirect (employee‐driven) revenues. Indirect revenue impacts to Other
Local Governments include sales taxes to the RTA.Estimates made in this analysis are based on hypothetical assumptions, current tax policies, and the current economic structure of the region. However, even if the assumptions outlined in this report were to occur, there will usually be differences between the estimates and the actual results because events and circumstances frequently do not occur as expected. This analysis is based on the best available information and, as noted is
intended to aid Pima County in quantifying Project Curvature’s impacts on the local economy.Applied Economics will not be liable for any damages resulting from the use of the report. This report may be used only by the County for the purposes that it was intended.
World View will offer very expensive high-altitude balloon rides to nearspace.
The World View website reads:
For more than fifty years, astronauts have spoken poignantly of the life-changing shift that results from seeing the world with this unique vantage. National boundaries vanish, the conflicts that divide us seem to disappear and the need to protect what Carl Sagan called our “pale blue dot” becomes both obvious and imperative.
These astronauts also tell us that the Overview makes the possibility of a more united, a more secure, a more protected world seem achievable, if only more people could have the experience.
Not everyone is so keen on the idea. In New Mexico, politicians are questioning an investment in “Spaceport America, where Virgin is an anchor tenant, and to even call for the $200 million facility to be put up for sale,” according to Gigmag.com.
“One of the poorest states [referring to New Mexico] in the nation has invested nearly a quarter of a billion dollars and 10 years in creating a hub for Richard Branson’s space tourism company, Virgin Galactic. Some see it as the crown jewel of a new space age while others call it a carnival for the 1 percent — but with persistent delays and mounting financial strain, Spaceport America is just trying to avoid becoming New Mexico’s costliest, most futuristic ghost town,” reported Buzzfeed in March 2014.
New Mexico State Senator George Muñoz, the sponsor of a bill to put the commercial spaceport up for sale, said he didn’t “know who the potential buyers would be, but whatever proceeds we receive could be used to paying down the debt New Mexico committed to when we built the place. There was a lot of hoopla before that if ‘We build it, they will come,’ but it’s been several years now and nobody’s shown up yet. New Mexican taxpayers are continuing to foot the bill for a $250 million empty facility.”
In a county that can’t even let little old ladies park in safe spaces, and refuses to pay its deputies what they were promised, it is hard to imagine that investing in balloon rides for the one percent is even a consideration.
Huckelberry’s memo includes correspondence that shows that this deal has been under consideration for some time. It was cooked up before taxpayers resoundingly rejected the massive bond package that contained all kinds of goodies for the well-connected. It is hard to imagine that taxpayers will fall for the ‘if we build it, they will come’ routine.
Yet, with its own codename, the World View project is immediately sexy. Add the antics of a desperate Joe Snell, of Sun Corridor, and one can only imagine how much hoopla will generated by the County supervisors at their meeting this morning.
We might be treated to dogs, ponies and balloons!
One thing can be sure – while the average politically unconnected small business owner is struggling to pay commercial property taxes in Pima County – the eighth poorest metropolitan area in the country, no one will be offering them a new building for their expansion or new enterprise any time soon. They couldn’t – it would probably be a violation of Arizona’s Gift Clause, and let’s face it – the Pima County sups would only risk violating those for friends.