A San Francisco Board of Supervisors committee today forwarded a plan to host the 2013 America’s Cup boat race along the city’s northern waterfront, though uncertainty remains about whether the winning team will approve its terms.
Oracle CEO Larry Ellison’s BMW Oracle Racing Team won the world-famous regatta in Spain in February on behalf of San Francisco’s Golden Gate Yacht Club, and gets to choose the host city for the next race.
A decision is expected by the end of the year, and negotiations with the city have been going on for months. Italy and Newport, R.I., have also been mentioned as possible contenders to host the Cup.
Last week, the city abandoned an earlier plan to hold the race farther south along the central waterfront in favor of an alternative agreement in which race venues would be located at several piers north of the Bay Bridge.
City officials have said the alternative would be cheaper for the cash-strapped city, which has a budget deficit for the coming fiscal year estimated at nearly $380 million.
But over the weekend, BMW Oracle Racing Chief Operating Officer Stephen Barclay said the new proposal did not make financial sense for the team.
“If it is resolved by the Board (of Supervisors) to progress the alternative agreement in its current form, San Francisco will not win the right to host the 34th America’s Cup,” Barclay wrote in a letter to Mayor Gavin Newsom and the board’s Budget and Finance Committee Saturday. Barclay said an acceptable bid needed to be submitted by Friday.
The committee today, however, forwarded the northern waterfront proposal, with only minor amendments, to the full board for consideration Tuesday.
Committee member Supervisor Ross Mirkarimi said that the city had done its due diligence and submitted the best possible plan.
“I think that San Francisco stands to be the best contender for hosting the America’s Cup,” he said.
Under the proposal, Ellison’s group would invest between $55 million and $80 million for badly needed port repairs in return for long-term development rights in those areas.
The board’s budget analyst released a report today that estimated total costs to the city for hosting the event at $11.9 million.
Additionally, a private group of local philanthropic and business leaders has pledged to raise up to $32 million to offset city costs.
The city has estimated that hosting the America’s Cup could bring more than $1 billion in economic activity to the city and the region, as well as add about 9,000 jobs.
Both Mirkarimi and committee chair Supervisor John Avalos said following the hearing that they expected the northern waterfront proposal to pass the full board on Tuesday, but they were less certain about whether BMW Oracle would accept it.
Mirkarimi said Barclay’s reaction came as “a little bit of a surprise to me…considering the good faith, round-the-clock effort that the city has been working to hammer out.
“It’s really hard to know (about a possible decision), but I take whatever he says very seriously.”
Avalos said difficult negotiations were anticipated.
“I was told that Mr. Barclay is a tough negotiator, and I expected to see some toughness over the weekend,” he said.
Asked if he thought Barclay would ultimately approve the terms, Avalos said, “We did the best we can, and I expect he will.”
Newsom spokesman Tony Winnicker would not venture a guess late this afternoon.
“It’s his job to get the best bid he can for the team,” Winnicker said. “We continue to be in discussions with the team this evening.”
Winnicker said that the city’s proposal would “provide an unmatched opportunity for the America’s Cup and the sport of sailing” and also “great benefits to the people of San Francisco and the development of our waterfront.”
“We understand that (the bid process) is a serious competition, and expect to put forward a very strong bid for the team’s consideration,” Winnicker said.
Ari Burack, Bay City News