The unanimous decision from the Court of Appeals said Pima County did not violate state law when it gave a no-bid lease on a building to World View.
The Goldwater Institute sued the county saying the lease with the space balloon company violated Arizona statutes.
The county maintained the lease was legal and was a standard way of closing economic development deals.
The appeals court agreed.
Attorneys for the Goldwater Institute said they will appeal to the Arizona Supreme Court.