Pima County To Mortgage Buildings To Pay For Balloons

On Tuesday, February 16, the Pima County Supervisors are expected to agree to offer as collateral several Pima County facilities to secure funding for the space balloon company, World View. After the failure of the County’s bond proposal last year, County administrator Chuck Huckelbery is scrambling to back-fill coffers while filling others in his resolution which authorizes issuance of Certificates of Participation in an amount not to exceed $60,000,000.

According to a memo from Huckelberry, the proceeds will be used for three purposes. $15,000,000 will be borrowed to construct the World View Enterprises’ project. Huckelberry also hopes to save a mere $750 thousand by borrowing up to $25 million to pay $16 million in debt and pocket $9 million to shore-up County coffers.

Collateral for the new debt will “consists of the Public Works Building and parking garage, the Legal Services Building, the Public Service Center and parking garage, and the Adult Detention Center,” according to a memo Huckelberry prepared for Supervisor Ally Miller after she and many members of the public questioned the World View deal.

“Certificates of Participation are a financing method where real property is transferred to a third party in exchange for an initial cash payment. The real property is then leased back from the third party and lease payments are made to the third party to repay the initial cash outlay plus interest. When the lease term ends and all amounts have been repaid, the real property reverts back to the original owner,” reads the memo.

According to Applied Economics, the County will pay for construction of World View Enterprises new 135,000 square foot building.”

According to a Huckelberry 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.

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.

At the same time, Huckelberry’s lobbyists are trying every trick in the book to kill HB2402. That bill “specifies information that must be included in county and municipal bond election pamphlets and ballots,” according to the legislative overview.

One Capitol insider reports that HB2402 has been retained on the calendar. The move was done at the last minute. Supporters of the bill are being encouraged to contact the bill’s sponsor, Rep. Vince Leach, to ensure the bill gets a fair an up or down vote.