Pima County announced Wednesday that its board of supervisors has settled on a new lease agreement with aerospace firm World View following a legal defeat from the Arizona-based Goldwater Institute (GI).
“This revision of the World View lease should put to rest years of legal wrangling over how Arizona counties can participate in economic development activities and business retention. Having prevailed on three of Goldwater’s four claims, and Goldwater on the fourth, we and all the other counties in the state now know where the lines are drawn, which is the silver lining in this costly dispute,” said County Administrator Jan Lesher in a statement shared with the press.
As of writing, the GI had no additional comments to share.
This new agreement, approved by the board in a meeting on Tuesday, nulls the previous deal between the county and World View made in 2016. The agreement includes an initial lease term of five years with rent based on 90 percent of the appraised value with a 2.5 percent annual increase. Meaning rent will begin at $86,265 a month in the first year and grow to $95,211 by year five, with yearly rent hovering over one million dollars.
Following the first five years, World View can enter into four renewal terms of five years each. Moreover, within the first two years of the contract’s execution, Would View could outright buy the property for $14,400,000. If the company does not opt for this option, a new appraisal and price will be set on the property upon renewal.
At the board of supervisors meeting, Deputy County Administrator Carmine DeBonis shared that the county has spent roughly $15.2 million in construction and maintenance relating to the World View project. So far, under the 2016 agreement, DeBonis said World View had paid the county $3.4 million, but under the new deal, he stated the county would more than recoup the costs it has incurred so far.
The new agreement also includes mandatory local employment and salary requirements World View must satisfy. This includes a minimum of 90 full-time employees in 2023, which must increase to 125 for the duration of the lease. The average salary for these employees will be at least $80,000 annually.
World View, co-founded by Senator Mark Kelly (D-AZ), specializes in near-space exploration using high-altitude balloons for scientific research. The 12-acre facility is located in the county’s Aerospace Research Campus and will soon be joined by an American Battery Factory manufacturing facility for producing lithium batteries.
As reported by The Arizona Sun Times, the lawsuit against the county’s deal with World View began in 2016. Under the initial agreement, World View would lease the property for 20 years and be responsible for insurance, maintenance, and paying rent. However, at the end of the lease, the company could buy the facility for $10.
The GI latched onto this minuscule price tag and argued it violated the Arizona Constitution’s Gift Clause. Appeals Court Judges Paul Tang and Gary Cohen agreed with the GI in a reversal order in October.
“We find it difficult to believe that a facility with an approximate value of $14 million in 2036 [year lease ends] can fairly be exchanged for $10 without violating our constitutional proscription against subsidies or gifts to private entities,” Tang and Cohen said.
According to the statement from the county, while the board could have appealed this reversal at the Arizona Supreme Court, they decided to end the lawsuit.
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Neil Jones is a reporter for The Arizona Sun Times and The Star News Network. Follow Neil on Twitter. Email tips to [email protected].
Photo “World View Launch Site” by World View.Â
