Arizona court dismisses objection to balloon-launching facility


PHOENIX — The State Court of Appeals threw out the latest legal objection to a high-altitude balloon-launching facility in Pima County, saying challengers waited too long to sue.

In a unanimous ruling Monday, a three-judge panel concluded that three individuals represented by the Goldwater Institute do have legal standing to contest a no-bid contract awarded by the county to design and build a facility for World View. The judges said the allegations that the contact was an illegal expenditure of public dollars was sufficient to give them their day in court.

But the judges declined to decide the merits of the claim.

Appellate Judge Karl Epplich, writing the decision, pointed out that the architect and the contractor already had been paid. More to the point, the judge noted that the facility is complete.

And Mr. Epplich said it’s no one’s fault but the Goldwater Institute that the case cannot go forward.

“The taxpayers could have preserved the possibility of a meaningful remedy by seeking to temporarily enjoin performance of the disputed contracts pending the outcome of the lawsuit,” the judge wrote. “They did not do so, however, despite ample opportunity.”

Attorney Timothy Sandefur acknowledged he did not seek a restraining order.

But Mr. Sandefur told Capitol Media Services that he will seek Supreme Court review, saying the appellate judges ignored a crucial legal issue: the decision of the county to accept free services from the architect and the contractor ahead of the no-bid contracts they eventually were awarded.

“That’s the essence of this case,” he said.

“(County Administrator Chuck) Huckelberry hired his cronies because they give him freebies and they know people,” Mr. Sandefur continued. “And so people like you and me, we can’t compete if we were contractors because we don’t know the right people and can’t afford to give freebies.”

But Mr. Huckelberry said the hiring of the two firms was justified, saying they were “well qualified” in building the special kind of project at issue here. Mr. Huckelberry also said these weren’t firms he chose but were specifically recommended by World View.

And Mr. Huckelberry said it was in the public interest to select these firms, which have both previously done business with the county, without going through the extensive bidding process.

“World View needed a facility to be completed by December of the year it was selected,” he said.

“These are the only two firms that could deliver in that time frame,” Mr. Huckelberry said. “So it’s either lose World View to Florida or select these firms.”

This is actually the second lawsuit the county has won against Goldwater in its efforts to challenge the project — and, specifically, the county’s involvement with it.

State court rules last year that the county did nothing wrong when it did not seek bids for a site that ultimately became the World View high-altitude balloon launching site, the Arizona Supreme Court ruled Wednesday.

At the heart of both legal battles is a lease between Pima County and World View which wanted a site to launch balloons which would carry individuals to the edge of space. The approximately $15 million deal includes not only the lease of a 12-acre county-owned site but also construction of a launch pad and headquarters for the company.

In the earlier lawsuit, Goldwater specifically challenged the county’s decision to lease the property to World View without going through competitive bidding. In that case, however, appellate judges said that a separate law provides an exemption from bidding requirements when counties are trying to lure a specific company to an area.

Now Goldwater is seeking to undermine the money paid to design and construct the facility.

That goes to the January 2016 decision by the Board of Supervisors to not only approve the World View project but also to hire Swaim Associates Ltd. to design it and Barker-Morrissey Contracting Inc. for construction. All of that was done without competitive bids, according to court records, following advice from Mr. Huckelberry that the board should invoke its emergency procurement authority, what with World View wanting an operational building by the end of 2016.

The facility was certified for occupancy in December of that year, with Swaim paid $667,709 and $12,334,531 for Barker-Morrissey.

In April 2016, as all that was going on, Goldwater filed suit claiming that the selection of the two firms was “predetermined” and it violated competitive procurement requirements.

Pima County Superior Court Judge Catherine Woods upheld the decision not to seek a bid, saying the county had determined the World View project was in the public interest as a means of economic development. And she said that putting the project out for competitive bidding would have been “unrealistic” as it would have not left enough time to actually finish the project by the time World View wanted it.

That led to the appeal by Goldwater.

Mr. Epplich and his colleagues concluded that they did not need to examine the county’s claim that it had a legitimate right to avoid sending those contracts out for bid.

“The World View project has already been constructed and Swaim and Barker-Morrissey have already been paid for their services,” he wrote.

Mr. Sandefur said that still leaves legal — and financial — issues to be resolved, including his belief that the county eventually will pay the two firms for that pre-contract work they performed.

There is yet a third lawsuit challenging the deal, something that has nothing to do with the bidding process.

Mr. Sandefur contends that having the county spend that kind of money to build a headquarters, balloon-construction facility and launch paid runs afoul of the Gift Clause of the Arizona Constitution which specifically prohibits subsidies to private business. That case is still pending in Pima County Superior Court.

World View is marketing itself and its products to companies looking to do high-altitude research. It also hopes to eventually provide a form of near-space tourism in the future, launching humans into the upper atmosphere.

There have been some setbacks, including the 2017 explosion of a hydrogen-filled balloon during ground testing.

That resulted in damages close to a half-million dollars to the company’s headquarters building.