America's Cup deal undergoes big changes at the last minute
13 by the Budget Analyst, the net loss to the city under the Northern Waterfront alternative would be $11.9 million, compared to $57.8 million under the prior agreement (not including costs relating to the rent-free leases proposed earlier). However, that impact doesn't account for a $32 million contribution that the America's Cup Organizing Committee is expected to provide to the city to defray municipal costs.
Under the Northern Waterfront plan, Piers 30-32 and Seawall Lot 330 would be leased to race organizers for 66 and 75 years, respectively, on "commercially reasonable terms" with development rights included. The race organizers would receive a rent credit in exchange for investing an estimated $55 million for infrastructure improvements.
Rose's office also found that the city would realize a net gain by transferring development rights for Piers 30-32 and Seawall Lot 330 with commercially reasonable rents, generating a net $12.3 million in new tax and lease revenues.
"This deal has significantly improved from the prior deal that went before you," Rose noted at the Dec. 13 Budget & Finance Committee meeting. The main reason for the reduction in costs was that under the original plan, ACEA would have been granted rent-free development rights to Pier 50, a 20-acre waterfront parcel needing costly renovations, for 66 years. Removing that costly improvement and shifting dredging costs from the city to race organizers made the prospect more feasible for San Francisco.
Piers 26 and 28 were added to the equation late in the game, too. Under the new plan, ACEA has the option to spend an additional $25 million renovating those piers in exchange for leasing them for 66 years with rent credits. Ted Egan, an economic analyst with the City Controller's office, noted that the piers were expected to last for only 15 years if they weren't renovated.
"Without the America's Cup stepping forward, we lose them, and we lose any potential development that could take place at those piers," he noted. Port Director Monique Moyer also praised the plan at the Dec. 8 meeting, saying piers that would have continued to deteriorate could now be revitalized.
Chiu amended the agreement to secure greater assurance that the city would receive a $32 million contribution from the America's Cup Organizing Committee (ACOC), the fund-raising arm of the race organizing team, to defray municipal costs. Prior to Chiu's amendment, there was no guarantee that the city and county would receive that money, Rose pointed out.
Jennifer Matz, director of OEWD, noted that ACOC was "committed to using best efforts" to raise $32 million over the course of three years. Under the agreement, if the committee hasn't successfully raised $12 million by one week after the environmental review has been completed, the city reserves the right to call off the deal.
The new plan seemed likely to pass muster even with Sup. Chris Daly, the most vocal opponent of the original plan. "One thing that's clear is that it's a whole lot better than the previous proposal," Daly said.
Ellison, who captured the 33rd America's Cup off the coast of Spain and holds exclusive power to choose which city will host the next sailing match, has set Dec. 31 as the deadline for his final decision. But a source familiar with the negotiations told the Guardian an announcement was expected even sooner.
Ironically, there was little doubt that Ellison would select San Francisco until the very end of the process, when the city finally reached an agreement that seemed to satisfy the Mayor's Office, the Board of Supervisors, and the economic analysts.
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