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Sea Monsters: There's Only One America's Cup Winner. But There are Many Losers 

Wednesday, Sep 25 2013

Page 3 of 5

The enthralling racing between Oracle and New Zealand, then, was bittersweet. It was a reminder of what could have been.

The finals, by definition, feature only two boats. So, San Francisco forfeited the opportunity to truly profit from a viable event when a paltry three challengers showed up for the preliminary races: New Zealand, the doomed Swedish Artemis team, and the hapless Luna Rossa from Italy. Artemis' disaster and Luna Rossa's preening boycotts led to the surreal spectacle of boats forced to race against themselves, and its near equivalent: New Zealand winning by lopsided margins in torpid affairs marred by mechanical failures.

Speedy, massive, and menacing boats fed Ellison's dream of a high-octane televised extravaganza. Even as they starved the city.

Until their victory parade hit an epic pothole, Kiwis soaking in the America's Cup had been kicking San Francisco's ass with a smile — and the city was thanking them for it.

"It's weird, isn't it?" confesses a New Zealand government apparatchik. "[Americans] I meet here tell me 'we're winning.'" — aligning themselves with the Kiwi underdogs. At least for a while, perhaps everyone liked a plucky winner. It was obvious whom most folks didn't take a shine to.

Larry Ellison's ranking on lists of the world's richest men would be interchangeable with his spot on compendiums of the world's least-likable men. He loomed over this America's Cup like Darth Vader. Ellison defenders point to the incredible money and effort he poured into developing his beloved sport and creating spectacular TV coverage. A fair point. But Vader likely poured incredible money and effort into the Death Star.

People cheered when that blew up, too.

San Francisco is a company town; people argue about Apples or PCs here in the same way folks in other parts of the country draw lines regarding Chevy or Ford pickups. But it's asking a lot for locals to root for a corporation instead of a country — especially after an agonizing years-long organizational process was capped by Oracle being nailed in a cheating scandal in which sailors and crew members conspired to illegally modify boats in a 2012 regatta. In a sport where the winners already get to dictate the rules, Oracle had to go further.

So, the knee-jerk backlash against an oligarch — especially from the city's left-leaning establishment — was understandable. But it came off as more than a tad naïve: In a move no American lefty would endorse, the Kiwis directly subsidized their yachting team to the tune of 36 million New Zealand dollars ($30.1 million American). Considering the relative gross domestic products of the United States and New Zealand, a comparable federal handout to American yachting would be $3.4 billion.

For the New Zealand government, this was a massive bet on winning the Cup, spiriting it back to Auckland, and profiting handsomely through hosting the next regatta. That investment also provided the leverage to allow more than 180 Kiwi businesses to gallivant through San Francisco in a networking free-for-all ("a lotta Kiwi beer and a lotta Kiwi tech.").

Because the prohibitive expense of the AC72s scared off other syndicates, Kiwi government and business schmoozers didn't have to compete against their Australian, Korean, Chinese, or French counterparts. And, when showcasing "a lotta Kiwi tech," they were able to start with those amazing, telegenic boats. Three of the four crafts were largely or entirely constructed in New Zealand — Ellison owns one of the major New Zealand fabricators. (Left unsaid — but hardly unstated — was that the fourth boat, built entirely in Europe, collapsed in a lethal wreck.)

But, minus a Cup championship and Auckland regatta, all of these gains don't amount to 36 million New Zealand dollars worth of fun. Thanks to its heavy investment in Emirates Team New Zealand, choking away the Cup in the greatest of all sporting letdowns won't just break New Zealand's heart.

It'll also break its bank.

After the last Kiwi floats out of town on a river of Steinlager, the denouement for those left to deal with the aftermath of the America's Cup will be that it could have been so much worse. The thrilling on-the-water action obscured murky land deals and the tenuous city benefits of playing gracious host.

Early iterations of the deal pushed by Newsom involved ceding vast swaths of the central or northern waterfronts to Ellison-controlled entities at a nine-figure loss to the city. An examination of the fine print of a subsequent proposed $136 million pact indicated the city could have been reimbursing Ellison-controlled companies for development undertaken on land, ceded rent-free, into the 22nd century.

Now-Lt. Gov. Gavin Newsom did not return calls or e-mails. SF Weekly has learned, however, that even in casual settings among friends, he steadfastly insists the America's Cup has been an unbridled success.

Internal Port of San Francisco e-mails SF Weekly obtained last year revealed existential angst over the proposed Pier 27 cruise ship terminal, a project conjoined with the America's Cup. The terminal's hefty price tag prevented it from being constructed years ago — and, including state-imposed environmental mitigation costs, its budget doubled between 2009 and 2012. "Frankly, the cruise ship terminal isn't worth the risk," Port director Monique Moyer wrote to her staff in January of last year. "Sorry to be the 'Debbie Downer' on this, but I spent a sleepless night and I came to the conclusion that I can't be the one who does this to the Port."

Later that month, ground was broken on the terminal. Resembling a lecture hall on a mid-century Cal State campus, it is now complete. City officials portray this and other capital projects as a long-term benefit of the Cup. But, in May, Port officials admitted the terminal may yet lose the city $611,000 a year.

About The Author

Joe Eskenazi

Joe Eskenazi

Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" was a staff writer and columnist for SF Weekly from 2007 to 2015. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers.


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