While World View Enterprises continues to promote its long-promised but not-here-yet stratospheric balloon flights, the Arizona Court of Appeals will once again consider whether Pima County officials violated state law by giving the company a sweetheart lease deal at taxpayers’ expense.
On Tuesday, the court will hear oral arguments in a case that dates back to 2016 when the Pima County board of supervisors pledged $15 million to build an office and manufacturing complex for the private company along with construction of “Spaceport Tucson,” a high-altitude balloon launch pad.
The proceedings start at 10 a.m. and can be watched live at https://www.youtube.com/watch?v=pCX0YWRXlRg
The current case before the Arizona Court of Appeals is the third time a legal challenge to Pima County’s involvement with World View has been heard by the court.
Court records show that World View Enterprises Inc. was founded in 2013. The next year, company officers initiated discussions with Pima County staff about locating its headquarters, manufacturing facility, and launch pad in the county.
Then in January 2016, Pima County entered a 20-year lease/purchase agreement under which the County constructed a 135,000 square-foot facility on twelve acres of county-owned land to for use by World View. The company promised to bring hundreds of jobs to the site in support of its plans to send paying customers to the stratosphere.
The County also agreed to construct a launch pad on an adjacent county-owned parcel. Although the parcel and pad were taxpayer owned, World View would operate and maintain the property for which it would have exclusive use.
Pima County officials did not follow a competitive bidding process which is normally required when leasing property. Instead, the contract was enacted directly with World View as part of the county’s economic development authority.
In April 2016, three Pima County resident-taxpayers sued to invalidate the contract for failure to follow the competitive bidding process. A Pima County judge ruled in favor of the taxpayers, but in December 2017 the court of appeals overturned the local judge.
The appellate ruling noted that county officials had not entered into the World View contract pursuant to the county’s general leasing power, but rather had acted pursuant to the county’s economic development power “with the express intent of creating specific numbers of jobs at defined salary levels.”
A second part of the 2016 legal challenge addressed the non-bid procurement method by which Pima County Administrator Chuck Huckelberry had selected Swaim Associates Ltd. for architectural design services and Barker-Morrissey Contracting Inc. as contractor for the World View project.
A judge in Pima County later ruled in favor of the county on that part of the lawsuit, prompting the Arizona Court of Appeals to get the case in 2018. In an October 2019 opinion, the appellate court unanimously upheld the lower court’s ruling on the procurement process utilized by county officials.
By then, construction had long been completed on the World View complex and launch pad. The company’s first stratospheric balloon launched in 2017, followed by a hundred or so flights since then from various locations supporting commercial payloads and research.
The third, and current, legal challenge to the World View deal stemming from that same 2016 lawsuit involves Arizona’s Gift Clause. On Tuesday, a three-judge appellate panel will hear arguments on five issues:
- Did Pima County’s Lease Purchase Agreement with World View violate the Gift Clause?
- Did the county violate the Gift Clause by agreeing to a purchase option for a nominal price at the end of a long-term lease, when the facility will retain value?
- Did the county violate the Gift Clause by agreeing to a lease that contains a below market rental rate for the first half of the lease term?
- Did the county violate the Gift Clause because the leased property is subject to a tax exemption for aviation-related activities?
- Did the county violate the Gift Clause by constructing a publicly-owned launch pad for, granting a private entity priority use in exchange for operating, maintaining, and insuring it?
In the meantime, World View continues to promote its decade-long plan to someday lift tourists with its proprietary Stratollite Balloon attached to the World View Explorer. The company began accepting reservations last year for what is described as trips that would last 6 to 12 hours at a cost of $50,000.
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