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Bond Backlash

Should taxpayers drop $197 million to boost Raytheon

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These might just be the golden days for Raytheon Missile Systems.

In November, the defense industry giant scored $18.4 million in U.S. Air Force contracts, and unveiled a new plant in Huntsville, Ala. Just months earlier, it also saw Pima County taxpayers procure 382 acres from land speculator Don Diamond at a cool $5.9 million.

The barren parcel will become a safety buffer for Raytheon's plant here, off Old Nogales Highway near Tucson International Airport.

Then there's the Pima County Bond Advisory Committee, which is now chewing over whether it should ask citizens to spend another $197 million in southside road projects, mostly to benefit the missile maker.

However, this latest strategy has revealed a schism in the ranks, namely from committee member Brian Flagg. In his day job, Flagg manages South Tucson's Casa Maria Soup Kitchen. And he has trouble reconciling the hungry faces he sees each morning with spending millions of taxpayer dollars to boost a booming missile maker.

He points to new U.S. Census Bureau data ranking Tucson as the nation's sixth-poorest metropolitan area, with an unemployment rate steadily lingering around 9 percent.

When this matter was broached at a Jan. 18 committee meeting, says Flagg, "it got quite a response from a whole lot of people from across the spectrum who wanted to discuss it."

To him, the notion that Raytheon might abandon Tucson if taxpayers don't pony up is more baloney than he serves in lunch-time sandwiches. "It's just guys on the top using the whole notion of economic development to enrich themselves," he says.

"My point is, economic development for whom? For the whole community, including the 20 to 25 percent who live in poverty? Probably the same percent lives just above the poverty level. Taking care of Raytheon ... at best it trickles down on the bottom 50 percent. But I want economic development to be more than trickle-down economics."

A call to Raytheon spokesman John Patterson for comment was not returned at press time.

But Pima County Administrator Chuck Huckelberry, who assembled the $197 million project as part of a broader economic development plan, downplays Flagg's defiance. While conceding to a "minor division on the bond committee," he calls the package crucial.

"When you look at coupling the airport environs with the (UA's) Science and Tech park—which is what this roadway does—you really have 40,000 employees that go between those two facilities," he says.

Huckelberry describes efforts to court Raytheon as a shifting approach to prosperity. "Four or five years ago, economic development focused on going out and stealing somebody's employees to relocate them in Tucson," he says. "There was not a great deal of attention to protecting our base. But Raytheon is the single largest employer in Southern Arizona. We need to protect those 11,000 jobs at Raytheon and not let them diminish."

That mission crystallized in 2010 when, citing a lack of expansion space in Tucson, Raytheon instead picked Huntsville for its new, 300-employee plant that company president Taylor Lawrence called "the most advanced missile integration facility in the world."

The following spring, Huckelberry and Pima County District 3 Supervisor Sharon Bronson flew to Huntsville for a little confab with Raytheon officials. "It was a learning experience," Bronson says. "Huntsville consistently scored on these military contracts. We wanted to learn what they doing right and hopefully take lessons from that."

Their takeaway message: Huntsville consistently sweetened the pot through tax breaks and incentives. To Bronson, that meant Pima county needed to do the same, by making life easier for the plant here at home. For instance, "We learned that Raytheon needs that (safety) buffer if they were going to get any new contracts or keep current contracts," she says. "And they needed a secure entrance to the facility."

Huckelberry likewise returned from Huntsville with the conviction that pumping money into a "tech corridor" around Raytheon was critical. Ergo the $197 million in taxpayer-funded road improvements around Tucson's Raytheon complex.

Indeed, he found the project so essential that he pulled an end-run around the Bond Advisory Committee, and in November took his development package straight to the Pima County Board of Supervisors for their preemptive approval.

To some observers, it appeared that Huckelberry was attempting to muscle his measure through, since bond projects are normally only forwarded to the supervisors following a committee recommendation.

Still, bond committee chairman Larry Hecker, a Bronson appointee, suggests that Huckelberry's maneuvering was no big deal. "I wouldn't characterize it as unorthodox," he says. "The process followed by the bond committee is the same no matter how (a proposal) comes to us."

But to District 5 Supervisor Richard Elias, tinkering with the established process is dicey, especially since Pima County's bond process recently underwent a nasty, politically driven audit at the behest of Gov. Jan Brewer. Elias says the soon-to-be-released audit report gives the county high marks because of its clean system for selecting bond projects.

"The audit says we're doing things right. So why are we changing it? It says we're doing what we said we were going to do, and those folks who accused us of being cheaters and liars were wrong. This speaks very well of our bond program, and that process is important because it's what fueling a lot of voter support. If you're bullshitting people, people aren't going to vote for it."

While Elias was among the supervisors ultimately giving Huckelberry's plan a thumbs-up, he hints that his vote came with reservations. "The problem is size," he says. "If we're talking about a total (bond) package of $700 or $800 million, that's taking $200 million out of it right off the top. There are a lot of community needs. ...Where do you draw the line between economic need and community development?"

To Bronson, however, the impetus is clear. "Raytheon has the ability to move," she says, dismissing critics who contend that the company can afford its own improvement projects. "I don't agree that they have deep pockets. And they'll have even less deep pockets when defense cuts come through."

So what exactly are the fortunes of the giant armaments company? According to analysts, a report due this month could show a drop in Raytheon's fourth-quarter profits to $1.30 per share, down from $1.74 per share a year ago. But market watchers also predict yearly earnings of $5.54 per share, with revenues projected at $24.39 billion.

Brian Flagg has a hard time dredging up tears for a company with those kind of numbers. And he believes most locals feel the same. "The bond needs to win the votes of Tucsonans," he says, "and I don't think I'm out of the mainstream on this."

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