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World View balloon
World View’s team prepares a high-altitude balloon to carry a solar observatory payload into the stratosphere. (Credit: Carmen Noriega / World View)

A judge in Arizona has struck down Pima County’s $15 million development deal with World View Enterprises for a stratospheric balloon launch facility near Tucson.

Thursday’s ruling by Pima County Superior Court Judge Catherine Woods dealt a setback to World View’s plans to send tourists and payloads to heights above 100,000 feet.

The deal was forged more than a year ago, and led to the construction of a 700-foot-wide launch pad and headquarters facility for World View at Spaceport Tucson. The plan called for World View to lease the facility for 20 years, making annual payments ranging from $675,000 to $1.62 million.

World View’s employees began moving into the facility at the end of last year.

Months before the move-in, the Arizona-based Goldwater Institute filed suit against Pima County, claiming that the lease arrangement violated state laws. On Thursday, Woods agreed.

The judge ruled that before the county entered into the lease agreement, it had to have the facility appraised, provide notice of the proposed lease and hold a public auction. Because the county didn’t comply with those requirements, Woods determined that the lease should be canceled.

“Judge Woods’ ruling protects Pima County taxpayers from having to foot the bill for World View’s untested business model,” Jim Manley, senior attorney at the Goldwater Institute, said in a statement. “Instead of relying on a sweetheart deal from taxpayers, World View will need to pay market rates to lease its building, just like every other business in Pima County.”

County supervisors are due to discuss the ruling at a private session on Feb. 7.

Even before the facility was completed, World View started conducting uncrewed “stratollite” balloon launches for NASA and other customers. At last summer’s New Space conference in Seattle, World View CEO Jane Poynter said a full-scale mockup of the company’s passenger capsule would make its first test flight in early 2017.

World View emailed GeekWire this statement reacting to the ruling:

“Today’s court ruling does not affect World View’s current business operations. We remain focused on building our company and are excited about our recent R&D accomplishments and the increased market interest in our uncrewed Stratollite fight platform. While World View was not a listed party in the lawsuit between the Goldwater Institute and Pima County Board of Supervisors, we are committed to working closely with Pima County, the City of Tucson and the State of Arizona to fully realize the vision of a thriving spaceport and aerospace corridor in Southern Arizona.”

This report was updated at 9:37 p.m. PT Feb. 3 with World View’s reaction.

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