Smooth sailing for developers

America's Cup waterfront land giveaway has quietly expanded since the deal was approved — with Chiu's secret blessing

Green piers were part of the original Board of Supervisors agreement; those in yellow were added during closed-door negotiations

It's a mad dash at San Francisco City Hall to put all the pieces together in preparation for the America's Cup, the prestigious regatta that will culminate in the summer of 2013 along the city's northern waterfront. But once that spectacle is over, the biggest impact of the event will be a massive, lasting, and quite lucrative transformation of the city's waterfront by a few powerful players, a deal that has been modified significantly since it was approved by the Board of Supervisors.

As negotiations on the fine terms of the development agreements continue to unfold, the future landscape of a huge section of the San Francisco waterfront is in play. If the America's Cup Event Authority (ACEA) — the race management team controlled by billionaire Oracle CEO Larry Ellison — aims high in its investments into port-owned infrastructure, it has the potential to lock-in leases and long-term development rights for up to nine piers for 66 years, with properties ranging from as far south as Pier 80 at Islais Creek to as far north as Pier 29, home of the popular dinner theater Teatro ZinZanni.

The possibility of securing long-term leases and development rights to Piers 19, 23, and 29 — provided race organizers sink more money into infrastructure improvements — was added to the deal in the last two weeks of 2010, just before San Francisco won its bid to host the world-famous sailing match. The possibility of obtaining rights to portions of two additional piers, 27 and 80, were also added at the last minute. Race organizers and city officials negotiated the final modifications after the Board of Supervisors signed off on the Host City Agreement on Dec. 14, 2010.

Not all board members knew that three additional city-owned piers were being added as possible extensions of the land deal, and those properties weren't mentioned in any of the earlier documents that went through a public review process in the months leading up to the approval of the agreement. Yet Board President David Chiu was evidently appraised of how the last-minute negotiations were unfolding and he quietly offered his support.

On Dec. 22, 2010, Chiu sent a letter to Russell Coutts, CEO of Oracle Racing, the team that won the 33rd America's Cup and is an integral player in laying plans for the 34th. "I understand that Mayor Newsom and the city's team have been working directly with you since the board's approval of the Host City Agreement to make the necessary adjustments and clarifications to the agreement to ensure it meets your needs. I am aware of these changes and support them," Chiu wrote in a letter that was not shared with his fellow supervisors.

Quoting from a section of the agreement that explains that ACEA is ensured long-term development opportunities in exchange for funding improvements and upgrades, Chiu's letter went on, "This section specifically applies to ... Piers 30-32 and Seawall Lot 330, as well as Piers 26 and 28, and if mutually agreeable could apply to Piers 19, 23, and 29. To obtain the community's support and agreement for future development rights to piers on the northern waterfront, you will need to invest in a strong partnership with the community ... I am prepared to help facilitate that relationship."

Former Board President and Democratic County Central Committee Chair Aaron Peskin, who has closely followed the America's Cup land deal and has for decades been actively involved in land-use issues along the northern waterfront, interpreted Chiu's letter to Coutts as a backroom deal.