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  • World View FAQs

    Pima County - World View Economic Incentive Agreement
    Frequently Asked Questions

    There has been a great deal of public interest in Pima County’s economic development incentive agreement with Tucson-based World View, an innovative space technology company developing high altitude balloons capable of lifting various types of payloads to the stratosphere. We have compiled many of the frequently asked questions about the World View agreement and provide answers to help the public understand this County effort to help a growing Tucson company prosper and add high-wage jobs to our community. 

    Q. What is World View?

    world viewA. World View is a Tucson company founded in 2012 that develops and flies proprietary high-altitude unmanned flight systems for numerous commercial, government, and research customers. Its versatile platform serves a wide variety of mission functions and supports a range of applications, spanning industries including first response and disaster recovery, communications, weather forecasting, and surveillance aid for U.S. troops. World View is led by a technical team of experts in high-altitude ballooning and veterans of human spaceflight, including former Biosphere 2 crew members, two astronauts and a former NASA associate administrator.

    Q. Why did the County help them?

    A. Pima County’s Economic Development Plan calls for retaining existing employers and attracting high-wage employers to the region with the goal of adding more and better-paying jobs and diversifying our economy. World View is a rapidly growing startup company that is ready to begin the next phase of its business plan – manufacturing high altitude balloons and launching technology, research, communications and surveillance payloads to near-space. In the distant future, World View intends to leverage the technology developed for commercial customers to launch passengers to near-space inside a pressurized space craft.

    The company in 2015 embarked on a highly competitive national search for a new headquarters and manufacturing facility, receiving numerous economic incentive proposals from a number of states that already had spaceports and space industry infrastructure. The Arizona Commerce Authority, which is the state’s economic development agency, contacted Pima County and asked if the County could assist the state in retaining this growing company in Arizona.

    Pima County, as outlined in the Economic Development Plan, had an interest in retaining the company here so that our region benefited from the company’s growth, especially job growth, and entered negotiations with the company and the Arizona Commerce Authority. 

    Q. Did the County do a thorough job reviewing this company?

    A. Yes. The Board of Supervisors empowers the County Administrator’s Office to research companies under consideration for economic development incentive agreements. County staff met with numerous World View officials and reviewed the company’s business plan, its financial and investment information and verified its existing contracts.

    Additionally County staff, led by Dr. John Moffatt, director of strategic planning, reviewed the performance history of Paragon Space Development Corp., which the two World View principals, Jane Poynter and Taber MacCallum, co-founded and led. Paragon is a developer and manufacturer of life-support systems for astronauts, contaminated water divers and extreme-environment explorers.

    Paragon has been in business for more than 23 years, has more than 100 employees and has been ranked by “Inc.” magazine as among the fastest growing companies in the country. All of the World View financial information provided to County staff was done under a nondisclosure agreement that restricts the County from revealing proprietary information about the company to the public.

    Dr. Moffatt has an MBA, ran his own technology and business consulting companies for 40 years that included Fortune 500 corporate clients and he is well versed in reviewing business plans and prospectuses. 

    Q. What does World View get out of the deal?

    A. Pima County is constructing a 120,000 square foot headquarters and light manufacturing building that it will lease to the company at a rental rate that starts fairly low but goes up every five years during the term. This allows the company to pour most of its investment capital into the manufacture and sale of its products and services as it begins its expansion, helping it achieve success quickly.

    Pima County, with assistance from the state of Arizona, is also constructing a balloon-certified launchpad that the company will be able to use for its flight operations. The launchpad, called Spaceport Tucson, will be a Pima County asset and public amenity that is available for use by other companies for high-altitude balloon operations. 

    Q. What do the county and county taxpayers get out of the deal?

    A. Jobs, prestige and a foothold in the rapidly growing space technology industry. 

    As part of the incentive agreement, World View must add a specified number of new jobs each five-year period of the 20-year deal, starting at 200 in its first five years at an average salary above $50,000. The company expects to exceed those numbers, growing to at least 400 employees. Additionally, the construction of the manufacturing building and Spaceport Tucson will create 100 or so temporary construction jobs. The company will lease the manufacturing building from the County for 20 years and has the option of taking title to it at the end of the term. World View will pay roughly $4 million more than what it will have cost the County to construct the building.

    An analysis of the economic impact of World View’s retention in Pima County done by Phoenix-based Applied Economics shows that the company will generate roughly $3.5 billion in economic activity over the course of the 20-year lease. 

    World View’s high profile – it has two former NASA astronauts and a former NASA administrator on its senior leadership team – and its existing contracts with NASA, universities, and defense contractors will help the County jump start its aerospace, defense, technology and research park. We expect World View will attract other aerospace firms to the aerospace park. Prior to this agreement, Arizona was the only state in the southern United States that did not have a spaceport. 

    Q. Was Pima County the only government offering World View incentives?

    A. No. World View also received incentives from the city of Tucson and the state of Arizona. The Tucson City Council in March 2016 approved providing World View $479,000 in incentives through its Primary Jobs Incentive, which includes waivers for construction sales taxes and fees. The Arizona Commerce Authority provided the company $1 million through its Quality Jobs Tax Credit and the Arizona Department of Transportation will use a grant program to pay $1.5 million of the $2 million estimated cost to construct the high-altitude balloon launchpad, Spaceport Tucson.

    Q. Do the incentives violate the state’s gift clause law?

    A. No. No County funds are being gifted or loaned to World View. Pima County is building two publicly owned facilities: A light manufacturing building and a launchpad. Pima County will retain ownership of both structures. At the end of the 20-year lease agreement for the headquarters and manufacturing building, World View has the option to purchase the building from Pima County. If it chooses to do so, Pima County will sell the building for a nominal fee and credit the company with its 20-years-worth of lease payments, which total $4 million more than the County’s cost to construct the building.

    State courts have ruled that government transactions with private companies are allowable under state law as long as the transaction furthers some public purpose and the private company provides reasonable consideration in exchange for what it is getting from the government. The public purpose of this transaction is to generate economic development for the good of the community, as described above. Hundreds of high-paying jobs and billions of dollars in economic activity over 20 years is, in the view of the County, a terrific public benefit. As for consideration, World View will pay rent during the term of the lease and cannot take title to the building until the County has received a $4 million profit over its cost of construction. That's clearly a reasonable return on the County's investment. 

    It should be noted that between 2012 and 2015, the Arizona Commerce Authority handed out nearly $300 million in economic development incentives to private companies, which resulted in more than 50,000 jobs, $6 billion in capital improvements and $1.7 billion in state revenue. 

    Q. Why did the Board declare an emergency to hire the contractor and architect?

    A. State law allows public bodies to declare emergencies in order to waive normal waiting periods and some rules or procedures when circumstances require immediate decisions or resolutions to problems. Declaring an "emergency" is a term of art that is often misunderstood. Counties and towns in Arizona routinely use emergency declarations, often for mundane issues. (The Town of Marana in April 2015 declared an emergency to make a land swap and sale with a homeowner’s association immediately effective rather than in 30 days.)

    Deputy Pima County Attorney Regina Nassen, in a letter to the Goldwater Institute, which opposes the economic incentive agreement with World View, described the circumstances of the need for the emergency declaration and its justified use by the Board of Supervisors: 
    “…[P]ima County had, for some months, been competing with several other locations within the United States for the siting of World View’s expanded operations. In order to develop an incentive proposal, it was necessary for World View to convey to the County its facility requirements and the estimated cost of constructing such a facility. World View worked with Swaim Associates and Barker Morrissey Contracting to develop those plans and estimates.
    Ultimately, World View selected Pima County for its headquarters, but indicated to County representatives that the deal was contingent on the County being able to deliver a completed facility by November 2016. After World View committed to the deal, just a few days before Christmas 2015, its representatives worked diligently with County representatives and legal counsel on the WV Lease and the Space Port Operating Agreement, getting those agreements negotiated and drafted in just a few short weeks. Nevertheless, when the deal was submitted to the Board in January, County representatives concluded that the expedited construction schedule would not accommodate normal Title 34 procurement procedures.
    Title 34, however, permits “emergency procurements” under a fairly broad spectrum of circumstances. A.R.S. § 34-606 provides: Notwithstanding any other provision of this title, an agent may make or authorize others to make emergency procurements of architect services, construction-manager-at-risk construction services, … if a situation exists that makes compliance with this title impracticable, unnecessary or contrary to the public interest …. A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file.
    The Pima County Code contains a corresponding exception, in Section 11.12.060.
    In compliance with both the statute and the Pima County Code, a written justification for the procurement was presented to and approved, first by the County Administrator, and then by the Board. There is no Arizona case law interpreting A.R.S. § 34-606 to mean anything other than what its plain language indicates. County representatives made a reasonable good faith determination that, under the circumstances, compliance with normal Title 34 bidding requirements for award of the County Facility design and construction contracts was “impracticable, unnecessary [and] contrary to the public interest.” There is no basis for a court to second-guess that determination.

    Q. What happens if World View isn’t able to fulfill its lease?

    A. Pima County can terminate the agreement, retake possession of the manufacturing building, lease it to another company, and seek a new manager for Spaceport Tucson. The County and County taxpayers retain the full value of the building and Spaceport.

    Q. Has the County helped other companies with economic incentives?

    A. Yes. Accelerate Diagnostics and HomeGoods both received economic incentives.

    Pima County attracted Accelerate Diagnostics from Colorado in 2012 after a competitive, national site selection process. The County leased the company 15,000 square feet of office and laboratory space in the Abrams Public Health Center, at 3950 S. Country Club Road. The county offered Accelerate the space at a below market lease rate. As part of the deal, the company guaranteed that it would employ at least 30 employees with average salaries of $70,000 over the course of the initial three-year lease. The company has since expanded and renegotiated its lease four times. It now pays market-rate rent and leases an entire floor of the County’s Abrams Center plus a small building next door. And it employs more than 100 workers at an average annual salary of more than $90,000.

    HomeGoods broke ground on a new 800,000 square foot regional distribution center adjacent to the County’s newly realigned Aerospace Parkway south of Tucson International Airport after the County and City of Tucson agreed to incentives worth more than $1.5 million. In order to obtain the assistance of local jurisdictions with its effort to establish a Foreign Trade Zone, homeGoods agreed to make "payments in lieu of taxes" (PILOT) to those jurisdictions. Under state law, property within an FTZ is taxed at a very low assessment ration: 5% instead of the standard 19% assessment rate. The PILOTs compensate jurisdictions for those lost property taxes. The Pima County Board of Supervisors  agreed that HomeGoods would not have to make PILOTs to County so long as it meets certain employment levels. The company agreed to employ a workforce of at least 895 people by the final year of the agreement. An economic analysis of the HomeGoods incentives showed the company will generate nearly $1 billion in economic activity over the term of the incentive agreement. 

    Q. I own a business in town, how can I get an incentive?

    A. Pima County’s Economic Development Plan calls for retaining existing employers and attracting high-wage employers to the region with the goal of adding more and better-paying jobs and diversifying our economy. Existing employers can qualify for incentives if they meet certain criteria for number of new jobs created and average wage above the metro area’s median salary.

    The County offers the following incentives and services for business attraction and expansion:
    • Workforce Recruitment and Training – Depending on the level of training and availability of funds, the value of training services can be as much as $3,000 per worker hired. Eligibility for training funds is available for those employees hired with wages of at least $14 per hour plus appropriate benefits. 
    • Planning, Zoning and Permitting Assistance – For new and expanding companies, Pima County offers additional technical assistance and accelerated permitting. 
    • Financing – Pima County offers business and capital financing assistance through the Pima County Industrial Development Authority. In many cases financing may include tax-free bond loans that will substantially reduce payment costs. (Pima County may also be able to facilitate financing through various private business and government financing organizations.)
    • Foreign Trade Zone – Pima County will support new company applications for federal Foreign Trade Zone (FTZ) designation, however in some instances Payment-In-Lieu of Taxes (PILOT) may be required. FTZ status substantially reduces a company’s import and export duties, as well as its property tax assessment ratio. 
    Pima County is but one public entity in the county offering incentives to existing companies to help them grow and prosper. Cities, town and the state all also offer incentives for business retention and attraction. 

     The Arizona Commerce Authority offers 17 types of incentives; the city of Tucson has 12 incentive categories; and the towns of Marana, Oro Valley, Sahuarita and South Tucson all offer incentives. 

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    Dr. John Moffatt,

    (520) 724-8450

    130 W. Congress, 10th Floor
    Tucson, AZ 85701

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