World View Enterprises executives have been saying they expect to have more than 400 employees in about four years.
It turns out, the near-space balloon company’s deal with Pima County does not hold them to that.
The county released a key document about its deal with World View Enterprises soon after I requested it two weeks ago. Apparently the company decided not to fight the release, as it is allowed to do under its county contract.
“Exhibit E,” which I discussed in my Jan. 29 column, is the key document that spells out how many jobs at what pay World View must create. It was not publicly available on Jan. 19, when Pima County’s supervisors voted in favor of the deal.
The contract spells out that Pima County will build a $14.5 million headquarters for the company, as well as a $500,000 launch pad for its high-altitude balloons. The total cost, with interest, is expected to be about $20 million within 20 years, but after the company pays all that back and then some, it gets the building.
However, under the deal, if the company doesn’t employ the required number of people at the mandated level of pay, then Pima County has the right to terminate the contract and take back the headquarters it is building.
The original, publicly available lease-purchase agreement described the company’s obligations in this contractualese language:
First Five Years: For a 4-year period starting on the one year anniversary of the Commencement Date, World View must employ at least the number of FTE Employees shown in Line 1 of Exhibit E at the Premises on average over each Measuring Period, and those employees — or the top-paid number of FTE Employees shown in Line 1 of Exhibit E if World View has more than the minimum number — must have an Average Annual Salary over each Measuring Period of at least the among shown on Line 2 of Exhibit E.
What on Earth does that mean? With the help of Exhibit E, I can tell you it means that World View must employ at least 100 people full time in the first five years of the contract, and that they must make an average of at least $50,000 per year.
The difficult-to-decipher caveat between the dashes means this: If the company employs more than 100 full-timers in that period, it can meet the pay requirement by averaging just the salaries of the highest-paid 100.
The company’s requirements go up in steps for each five-year period of the 20-year contract. In the second five years, the company must employ 200, still at an average salary of $50,000.
In the third five years, 300 people at $55,000 per year. And in the fourth five-year period, 400 at $60,000 per year.
In other words, while company executives have talked about 400 jobs by around 2020, they aren’t required to create that many until 2032 or so.
The county’s recourse if World View fails to live up to its employment commitments is simple, as County Administrator Chuck Huckelberry explained: The county gets the building.
But the lease is of course more nuanced than that. If World View falls short by less than 10 percent and that is due to economic conditions or certain other factors, then the county has no recourse. Only if the employment falls short by more than 10 percent or does so for reasons within its control may the county collect.
Even then, there are questions about whether the county would want to push such consequences. The city of Tucson has shown, in its downtown dealings with The Gadsden Co. and Bourn Cos., that it would rather accommodate troubled developers than come down on them hard.
Our local experience shows that when government goes in for a dime, it goes in for a dollar — or $20 million dollars in this case.
Babeu’s battles go on
Pinal County Sheriff Paul Babeu took a couple more hits in the Arizona press this week in his effort to become the Republican nominee for Congress in the 1st Congressional District.
First, reporter Dennis Welch of KTVK Channel 3 in Phoenix pointed out that Babeu filed for the race two months after campaign-law triggers said he was supposed to. In addition, he initially filed to run in the wrong district, CD4, the district he ran in once before.
Then the Casa Grande Dispatch noted that the Sheriff’s Office had put out a mailer to 8,175 residents, using money seized by his department from criminals, touting Babeu’s accomplishments. Critics called it a clear use of his office for campaign purposes. Babeu’s buddy Lando Voyles, the Pinal County attorney, said it was perfectly legal.
Expect Babeu, the leading fundraiser in the campaign, to take more hits as it goes on.
Dems Down on District 1
For years, the 2nd Congressional District, which includes the eastern Tucson metro area and Cochise County, has been considered a toss-up district. The partisan registration is close, and the elections have been very close.
But now the Dems appear to be seeing Rep. Martha McSally, the Tucson Republican, as too strong. The Democratic Congressional Campaign Committee excluded the district from its new list of competitive races. That means something: The DCCC is less likely to spend money on races it doesn’t see as winnable.
Dr. Matt Heinz and former state Rep. Victoria Steele are running for the Democratic nomination in the district.
