money.jpgYou have to spend money to make money, as the saying goes — but if San Francisco hosts the 34th America’s Cup, the cash-strapped City and County of SF will be an additional $128 million in the red, according to a report released Thursday.

Prepared by the independent Budget Analysts’ Office at the request of Supervisor Chris Daly, a staunch opponent of the America’s Cup, the report estimates that hosting the Cup itself would cost $42.1 million. That figure — spending by Muni, the Police Department and other city agencies — includes the estimated “benefit to the economy” of $1.2 billion, which trickles down to $22 million in tax revenue, the report said, which offsets somewhat the total event cost of $64 million.

Granting free leases and exclusive waterfront development rights to BMW Oracle Racing team owner Larry Ellison, a billionaire software developer, would cost the city an additional $86.2 million of lost revenue, the report said. That figure includes any projected tax revenue earned from tithes on potential condos or hotels Ellison might build on Seawall Lot 330 and Piers 30/32.

Hosting the yacht race *could* be even more expensive that that, according to the report. If the Port of San Francisco is forced to issue bonds to finance waterfront improvements, the City will need to find an additional $14.5 million.

This report was based on the October term sheet as well as a regional economic benefit report issued over the summertime by the Bay Area Council. Next week, the Budget Analyst is scheduled to release a second economic impact report based on the host city agreement. But in the meantime, “these numbers are real,” Daly said. “It’s a huge giveaway [to Ellison].”

“I’m interested in getting the best deal for the city,” he added. “And usually, negotiating does not mean giving the other guy [Ellison] the best deal possible.”

Mayoral spokesman Tony Winnicker dismissed Daly’s criticism and the report, calling it “premature.”

“A report is only good as the information on which it is based,” said Winnicker, who noted that the second report, due next week, could be more rosy. Winnicker also took the time to blast — again — reports that the bid submitted by a mystery port city in Italy doesn’t exist, providing to The Appeal a ream of press clippings that purportedly — we barely speak English, let alone Eye-Talian — proves otherwise.

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