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