Long-winded debate about the America’s Cup

If a white squall doesn't work, Daly's going with Plan B: sea monster.

The prospect of San Francisco turning into an international enclave for billionaires and their custom-built super yachts in 2013 is either electrifying or nauseating, depending on one’s perspective. If San Francisco is selected as the venue for the 34th America’s Cup, the city’s downtown would be transformed into the “America’s Cup Village” during the prestigious match, and placed at the center of an international media spectacle.

Larry Ellison, billionaire CEO of Oracle and backer of the BMW Oracle Racing Team, won the 33rd America’s Cup sailing match in Valencia, Spain earlier this year. His victory grants him unilateral power to choose where the next regatta will be held, and so far, he’s narrowed the choices to Valencia, Spain, an undisclosed port in Italy, and San Francisco. The city’s Golden Gate Yacht Club is the home club of the BMW Oracle Racing Team.

Since July, when Ellison indicated that San Francisco was a finalist, the Mayor’s Office of Economic and Workforce Development (MOEWD) has been scrambling at breakneck speed to produce a term sheet for hosting the Cup so that it can submit a formal bid to Ellison for consideration. On Oct. 5, the term sheet went before the Board of Supervisors, where it was approved on a 9 to 2 vote, with Sups. Chris Daly and John Avalos dissenting.

The mayor’s office, the Port of San Francisco, the Bay Area Council, and other major downtown interests in San Francisco seem feverishly excited about the prospect of hosting the America’s Cup. Sup. Michela Alioto-Pier, who tends to align herself with Mayor Gavin Newsom, proclaimed at the meeting, “I pray to God that Larry Ellison says yes!” A study produced by Beacon Economics suggested that the event would generate $1.4 billion in economic activity, plus create 9,000 jobs. The Port of San Francisco has been deeply involved in the America’s Cup bid because it offers an opportunity to renovate crumbling port infrastructure.

Daly, meanwhile, launched into a rant of dissent against the America’s Cup. “I will bring a white squall onto this race and on to this Cup and I will do everything in my power starting on January 8 to make sure these boats never see that water,” he fumed. (That night, he practiced by bringing a white squall onto the Guardian over Facebook.)

Hyperbole aside, the District 6 supervisor raised some sharp questions about the America’s Cup proposal, and several of his colleagues thanked him at the Oct. 5 board meeting and at an Oct. 4 Land Use Committee hearing for seeking accountability. He was distressed at being asked to sign off on a term sheet on short notice that was not accompanied by a financial feasibility study. He also wondered why key figures -- like the price tag for the actual event or the impact on the General Fund -- were not clearly outlined in the proposal.

MOEWD director Jennifer Matz noted that the term sheet was meant as a preliminary, non-binding endorsement of the concept, and many details were yet to come. No final agreements can be signed off on until the proposal has cleared the environmental review process. But Daly took issue with the notion that it was just preliminary. “There is really no turning back,” he said. “This will be a rolling stone. Will this be good for San Francisco? I’m not so sure.” He wondered how the race would impact the city's lower-income residents. 

The term sheet outlines a deal in which “the Event Authority,” which essentially refers to Ellison, would get a free long-term lease of port infrastructure in exchange for bringing the race to San Francisco. The lease awards full control of Piers 30 –32 and 50, plus Seawall Lot 330, for up to 75 years (it’s possible that the lease will end just as sea-level rise starts to pose a real problem for San Francisco).

The lease comes with long-term development rights for those parcels, plus the proceeds of any tax-increment financing from the sites. What are now publicly controlled, crumbling piers with relatively low value would get full makeovers, serving as privately controlled hospitality centers, team bases, food and beverage stations, an international broadcasting center, and entertainment venues when yacht owners descend upon San Francisco during the match. Craig Hartman, the architect who is doing the Parkmerced redesign, described his vision for the yacht race venue to the Land Use Committee on Oct. 4.

At the helm of the bid to host the Cup in San Francisco is the America’s Cup Organizing Committee (ACOC) -- a nonprofit organization, according to the term sheet. ACOC’s nongovernmental status means it will not be required to hold public meetings or be subject to Sunshine laws. The committee has pledged to help raise $270 million from corporate sponsors for the event. The “working” members of ACOC, who represent the private sector, include billionaire Warren Hellman, who hosts the annual Hardly Strictly Bluegrass festival, billionaire venture capitalist Tom Perkins, who had his own fancy mega yacht too, plus representatives from AT&T, Wells Fargo, a representative from the Clinton Foundation, and others from capital management firms, real-estate development groups, and yacht clubs. Between all of them, it shouldn’t be too tough to scrape together $270 million.

The “honorary” members, who represent the public sector, include House Speaker Nancy Pelosi, Senator Dianne Feinstein, Governor Arnold Schwarzenegger, State Sen. Mark Leno, Assembly Member Tom Ammiano, former and Mayor Willie Brown. Every member of the Board of Supervisors is named as an honorary member of ACOC -- except Daly.


Who cares how it impact low income residents? Everything does not have to be about the poor.

Lots of people all over the Bay Area would love to watch this race. Lots of people will spend lots of money in restaurants and hotels.

Poor people are not the only people in SF and personally I'm tired of the endless poverty pimp focus of the Board.

Posted by Scott on Oct. 08, 2010 @ 8:32 am

It should be about

bike riders
people who drive hybrids
people who ride the bus
people with extra toes
people who work
people who don't work
illegal aliens
college educated experts who agree with the Guardian
simple folk with common sense who never went to college who agree with the Guardian
community activists who agree with the Guardian
the normal people who don't have a say in their community
It should be about economic justice
It should be about social justice
it should be about argument by definition
It shouldn't be about rich people
It's about getting a grant from George Soros
jobs are the most important thing
jobs are not the most important thing
how much does it make in taxes
lets not do it and raise taxes

It's about what works today

Posted by matlock on Oct. 08, 2010 @ 11:26 am

Just what is Chris Daly smoking? He's bound and determined to run SF into the ground at the expense of it's functioning, productive, and yes.. prosperous residents. It's really getting tiresome.

This has got to be the only city in the world that would complain about billionaires coming to town. What a wonderful opportunity to have the world's foremost yachting race right here in our bay. Give Ellison his lease on some of our waterfront crumbling piers! What is the downside here?

Posted by Tired of plain stupid politics on Oct. 11, 2010 @ 3:31 pm

Screw you Chris Daly. Average people in SF are not struggling, and are not homeless.

"The $1.4 billion is not going to go to homeless services... your average person in the Tenderloin, your average person struggling to make it by in San Francisco, is not going to benefit from the America's Cup."

Posted by Guest on Oct. 11, 2010 @ 4:24 pm

I truly hope this wonderful event comes to town.

Posted by Lucretia Snapples on Oct. 11, 2010 @ 8:02 pm

America's Cup is billionaire welfare. These people did not get rich by shelling out $270m to play their games, they got rich by taking advantage of the economic infrastructure that taxpayers have subsidized and by giving little or nothing back.

Back of the cocktail napkin economic analysis is what boosters do when they want to pull the wool over the public's eyes. Whether the boosters want to ingratiate themselves to the billionaires or whether they are offered a cut on the side, political chits or cold hard cash, the story is always the same. But the outcomes are far from certain.

The City cannot put its own house in order. Instead of getting drunk and heading out to the casino again, why not enlist the billionaires to clean up our fiscal messes first, and then once they've proven that they're buying into our municipal project, then maybe negotiate turning a sliver of the city over to them to play their games?


Posted by marcos on Oct. 12, 2010 @ 7:24 am

Chris Daly has said, publicly, that his primary reason for being against the America's Cup coming to SF is that no one else came out against it. Pretty weak, Chris.

Posted by Chuckl8 on Oct. 23, 2010 @ 2:00 am

Chris Daly has said, publicly, that his primary reason for being against the America's Cup coming to SF is that no one else came out against it. Pretty weak, Chris.

Posted by Chuckl8 on Oct. 23, 2010 @ 2:02 am