Report: 34th America's Cup would cost the city of SF as much as US$ 128 million
[Source: San Francisco Examiner] A new report might have taken the wind out of The City’s sails regarding the economic benefits of hosting the America’s Cup sailing race.
It would cost San Francisco as much as $128 million to host the 34th America’s Cup, offsetting the economic benefits, according to a the report released Thursday. It is the second economic report concerning what San Francisco could gain — or lose — by hosting the prestigious regatta.
The America’s Cup will be held in 2013 and the location will be announced at the end of this year, according to officials with BMW Oracle Racing. The team — backed by Oracle CEO and billionaire Larry Ellison — won the race in February and has the right to determine the date and location for the next event. San Francisco, Valencia, Spain, and a site in Italy are the only regions mentioned that are under consideration.
The new report — produced by Harvey Rose of the Budget Analyst’s Office — said San Francisco stands to gain $22 million in new revenue, yet it would incur costs of $64 million, resulting in a net loss of $42 million.
The net loss would skyrocket to $128 million or more if The City follows through with the deal it has put on the table — permanently signing over 2 acres of the waterfront for future development.
Supervisor Chris Daly, who has railed against the cost of the prestigious race, asked whether The City should go ahead and make the red carpet a little more plush. “It’s a huge giveaway. I’m interested if it’s even legal in terms of a gift of public funds,” Daly said.
Mayor Gavin Newsom accused Daly of trying to torpedo a plan that studies have shown would inject as much as $1.4 billion into the local economy and enhance San Francisco’s international image. The figures stated by the mayor come from a previous report by the Bay Area Council Economic Institute and Beacon Economics that was released in July.
“Chris Daly is looking to say no,” Newsom said Thursday before the report was released. “He is trying to find a way to kill this.”
The mayor’s staff said they always knew it would cost money to host the America’s Cup. Newsom said The City cannot reap the returns unless it makes some investments in infrastructure.
The Mayor’s Office said the new analysis is “misguided” and does not consider the long-term tax benefits The City would receive. “We have serious concerns about what’s an inaccurate analysis about the long-term development rights and costs associated with it,” said Tony Winnicker, Newsom’s spokesman. “We have serious work to do with [Rose’s] staff.”
Sink or swim?
The America’s Cup sailing race could end up costing The City a lot of money.
$35.8 million: Cost to Port of San Francisco for construction and tenant relocation
$17.7 million: Lost lease revenue to Port
$1 million: Cost of police services
$3 million: Muni costs
$6.6 million: Various other department costs
Labels: 34th America's Cup, San Francisco
18 Comments:
No wonder California is broke, with leaders like that it is a miracle they can keep their head above water this long.
Hosting the AC will put SF on the map for many years to come, just like it did with Valencia.
A one-off event will have no effect on the population of SF, it is already a hugely established place and nobody much cares for it there as far as I saw last week.
Looks like the people of San Fran have now just worked it out that the AC 34 with only 3 boats is going to be a flop.....
@1:51 PM
3 boats? BMWO, Mascalzone, and Artemis are signed up. That is at least 1 boat per team, but BMWO and Artemis will likely build 2 AC72's. ETNZ has said that when/if SF is named venue that they are in. That is at least 1 boat, but probably 2. Also take into account that USA17 will be shipped and sailing around SF Bay leading up to AC34. Thats another boat. Finally, all teams signed up will be tooling around in AC45's and there probably will be a youth regatta in SF tied to AC34. Another 5 -6 boats at least?
Seems like there will be more than 3 boats tooling around SF Bay for AC34. :P
Don't play with the words fathog.
there will be only few TEAMS. Whatever the numbr of boats, they cannot sail more than one at a time.
If SF believes an economic return of USD 1.4 billion, they are naive dreamers.
In Valencia, you had 12 teams, meaning about 1000 families who moved in for 3 years.
Nobody will spend more than few months in SF.
I think the Cup should be in SF, it will be marvelous, but people from SF should not be fooled with ridiculous numbers.
AC put Valencia on the sailing map. It was great for the city and the return is very difficult to measure. It wasn't just the 1000 families living there for the 3 years. They managed to bring F1 race, and still today the city is hosting sailing events that it never did, before the AC went there. So I think it is a great investment for SF and I hope they do it and later show the competence and vision to capitalize on it.
it is a great compliment to Valencia to say SF is in the same need of being put on the map!
Not sure you have visited both places to say something so out of line.
There's a huge difference between AC32 and AC34. In Valencia there were 12 teams that stayed 4 years while. In SF (if it goes there) there will be 6 teams that they will stay 4 months....
@5:28 PM
You call me "fathog" and accuse me of playing with words? What a douche. My point was to poke fun at yet another hater making assumptions when it is clear no one knows how many teams (and boats) will be involved at this time.
Once again, AC34 is on the same pace AC32 was in regards to teams signing up and the venue announcement. Will AC34 have as many teams as AC32 had, probably not, but for some to state AC34 will be a bust at this point is pure ignorance. Then again, haters gonna continue to hate right? lol
Completely agree.
Sailing around the world will surely improve the media impact but will also reduce the interest and economic impact for the "main" host city.
Team members (except BOR) will only live in SF for around 6 months in 2013. The rest of the time they will stay home for work or sail elsewhere following the AC serie. It is what ETNZ did in the 32nd edition. Same for the event authority and ACM, they will all be away for a long period of time.
If on top of that you reduce the number of teams to... 5 or 6...
The format of the event is not the same and will reduce revenues for the host city.
Outside of the AC Village and tons of debt what benefits did Valencia get?
Seems like Rita has been getting her butt hauled in-front of the various levels of governments that she borrowed from. Those debts have to be repaid but the problem is that what events are going to be big enough to help pay down some of the debt. Rita can only make promises right now and the deadline is on the horizon for those that borrowed.
Screw it. lets just have the AC in Valencia. The infrastructure is there. Accommodation is easy and On The Rocks and Lambruscaria are gonna go bust if we don't do something soon.
Lets get some momentum going in VLC then have the AC 35 in the States in 2015 if BMW win. Makes sense to me.
Don't talk about the benefits the AC has brought to Valencia. The city and the regional government are now in "bankrupt" and the F1 and AC are partially responsible.
They are trying not to host the F1 anymore because they can simply not afford it, but Ecclestone has its contracts signed and will not give up.
All the Port AC is a nice place in Valencia, but also a black hole for money with a difficult future.
Isn't 128 million dollars the money Ru$$ell got from Larry to race the AC33?? It seems that SF taxpayers will actually make the richest sailor on earth even richer!!
11:22 AM anon
I am under the impression that your knowledge regarding tax systems is extremely limited. Sorry to state this, but your argument is sub-tabloid level. If I were you, I would be more than embarrassed.
But then you cowardly refuse to sign your comments with a name...
Why am I not surprised?
11.22
And you are?
I am sure people in SF know best what is good for the city and they will decide accordingly. There seems to be no real need for "expert consultation" via Valencia Sailing threads
12:42
Great come back. Hahahah
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