The biggest fish - Page 2

The America's Cup would transform San Francisco's waterfront -- but is it a good deal for the city?

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The next world-famous sailing match could be held in San Francisco in 2013
PHOTO BY JEAN-BAPTISTE DANIEL


THE CREW

According to a Forbes calculation from September 2010, Ellison's net worth is $27 billion, making him several times wealthier than the City and County of San Francisco, which has a total annual budget of about $6 billion. Ellison reportedly spent $100 million and a decade pursuing the Cup.

As soon as Ellison expressed interest in bringing the Cup to San Francisco, Newsom began charting a course. Park Merced architect and Newsom campaign contributor Craig Hartman of the firm Skidmore, Owings & Merrill was tapped to reimagine the piers south of the Bay Bridge as the central hub for the event, and soon Hartman's vision for a viewing area beneath a whimsical sail-like canopy was forwarded to the media.

The mayor also issued letters of invitation to form the America's Cup Organizing Committee (ACOC), a group that would be tasked with soliciting corporate funding for the event. ACOC was convened as a nonprofit corporation, and it's a powerhouse of wealthy, politically connected, and influential members.

Hollywood mogul Steve Bing, who's donated millions to the Democratic Party and funded former President Bill Clinton's 2009 trip to North Korea to rescue two imprisoned American journalists, is on the committee. So is Tom Perkins, a Silicon Valley venture capitalist, billionaire, and former mega-yacht owner who was once dubbed "the Captain of Capitalism" by 60 Minutes. George Schultz and his wife, Charlotte, are members. Thomas J. Coates, a powerful San Francisco real estate investor who dumped $1 million into a 2008 California ballot initiative to eliminate rent control, also has a seat. Coates resurfaced in the November 2010 election when he poured $200,000 into local anti-progressive ballot measures and the campaigns of economically conservative supervisorial candidates.

Billionaire Warren Hellman, San Francisco socialite Dede Wilsey, and former Newsom press secretary Peter Ragone are also on ACOC. There are representatives from Wells Fargo, AT&T, and United Airlines. One ACOC member directs a real estate firm that generated $2.5 billion in revenue in 2009. Another is Martin Koffel, CEO of URS Corp., an energy industry heavyweight that made $9.2 billion in revenue in 2009. There's Richard Kramlich, a cofounder of a Menlo Park venture capital firm that controls $11 billion in "committed capital." And then there's Mike Latham, CEO of iShares, which traffics in pooled investment funds worth about $509 billion, according to a BusinessWeek article.

There's also an honorary branch of ACOC composed of elected officials including House Minority Leader Nancy Pelosi, Gov. Arnold Schwarzenegger, Sen. Dianne Feinstein, and others. Their role is to help the Cup interface with various governmental agencies to control air space, secure areas of the bay exclusively for the event, set up international broadcasts, and bring foreign crew members and fancy sailboats into the United States without a hassle from immigration authorities.

ACOC is expected to raise $270 million in corporate sponsorships for the America's Cup. That money will be funneled into the budget for ACEA. It's unclear whether the $150 million ACEA is required to invest in city piers will be derived from ACOC's fund drive.

The city also anticipates that ACOC would raise $32 million to help defray municipal costs. "However," the Budget & Legislative Analyst report cautions, "there is no guarantee that any of the anticipated $32 million in private contributions will be raised."

Comments

Great piece,

The two numbers that jump out are the 35 acres of Bay front that Ellison would actually control. Newsom's people had everyone thinking it was 3 acres.

The other one is that you have a very astute post on another of your threads about this issue (or is it on the Bay Citizen?) who has a serious big time real estate background and says that any competent Realtor could get 50 times the value at which the Mayor is valuing the property they're proposing to give away (in a poker game where there aren't even any other players!) ... Means, Ellison is getting over 5 billion in property and we're losing, what, 80 pier businesses and how many jobs?

Time for Mirkarimi to show for the first time in his career that he can admit to a mistake. This is an incredible debacle and Ross is the lynch pin. If he doesn't flip on the issue, SF loses billions in value and all he get's is a chance to have a martini with Larry Ellison. Choose one, Ross. The people. Or, the photo op.

Go Niners!

h.

Posted by Guest h. brown on Nov. 30, 2010 @ 8:03 pm

A couple comments.

Firstly, is the city honestly going to consider losing the hosting of the America's Cup and its massive attendant benefits over a mere $10 million, out of a budget close to $6 Billion?? You ~have~ to be kdding me!

On the long term leases, the partner who already has half of SWL: 330, and built a condo there, renegged on a deal to resuscitate Pier 32. The numbers did not add up for him. Fortunately by some miracle this opportunity has arrived to salvage the idea, one that rescue the piers and also absolve the Port of a truly massive deficit problem with that, and maybe a couple other dilapidated, piers. How do you propose to raise city money to save those piers from crumbling into the ocean?

On the competition. Who knows who Alinghi put Daly in touch with, but Alinghi and their owner, spiteful and hurt billionaire Ernesto Bertarelli, just took a very serious beating at the hands of Ellison. Who do you think they tried to find for Daly? Someone who might support the Ellison cause? Of course not. Who they found is a nobody. Nobody has ever heard of this guy, I have looked into it too. To top that, the very next day after Daly posted the so-called non-proposal story from out of Valencia, the mayor of Valencia, Rita Barbera, said on live camera that her city had indeed offered 250 million Euros in (already) purpose-built facilities, but that the Americans had deemed the Italian offer to be stronger. Why would the ACEA have turned down the Valencia offer she spoke of, if the Italian offer was not in fact stronger? The fact that insiders in Rome are holding their cards close to the vest should be no surprise. They WANT this prize, believe me.

This is a very big deal. It is not going to solve other city budget allocation issues, decide who gets what from the $6 Billion. But it will, if wiser heads than Daly's prevail, generate an enormous boost to the city overall, as well as massive improvements to the waterfront that have no other good prospects for them at all.

Lastly: This is a about a fantastic, clean, beautiful, proud image for San Francisco. The America's Cup puts places positively on the world map like almost nothing else does. Yes, SF could use that about now! Quite frankly, articles like this do the opposite.

Posted by Guest on Nov. 30, 2010 @ 8:48 pm

You have one number wrong.

Ellison spent a decade pursuing the Cup at a total cost of $1 billion, not $100 million !!!

Posted by Stingray on Nov. 30, 2010 @ 9:29 pm

On one hand you mention hard economic times as an impact to raising sponsorship and a reason for not supporting a billionaires yacht race and yet on the other you fail to see that hard economic times are exactly the reason why the piers in question will continue to rot. So the lost rent figures are slightly skewed given that context.

Surely it's better to continue to improve the water front and host a world class event that will generate revenue you would never have seen anyway than hold out for another property developer that will be looking for a killer deal as well but will bring no new tourism to the city.

Posted by Guest on Nov. 30, 2010 @ 11:24 pm

Once upon a time, hosting the America's Cup was a prestigious thing. In fact, one of the reasons for competing for the America's Cup was to win the right to host the event the next time around.

It's a shame that the Golden Gate Yacht Club and Larry Ellison put the event out to tender. Instead, winning the Cup should have been the same as winning the right to host the Olympics. The citizens of San Francisco should have started planning to host the event the day after BMW ORACLE beat Alinghi.

Major events always cause these fights. People in Albert Park in Melbourne don't like the F1 Grand Prix there and it probably loses the city some cash, but it puts the city on the international stage for a couple of days a year and generates some tourism dollars. The UK people are ambivalent about the cost of the Olympics, but hopefully there will be some legacy infrastructure that comes out of it.

Some people are going to make money, some people are going to lose money. The Golden Gate Yacht Club should just announce with pride that they are glad to have won the right to hold the America's Cup in San Francisco, then everyone should get on with making it an incredible event.

Posted by Dave Fuller on Dec. 01, 2010 @ 2:23 am

These billionaires will not be satisfied until we begin to present them with a stream publicly funded of gold bricks.

-marc

Posted by marcos on Dec. 01, 2010 @ 9:58 am

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