A new plan for hosting the America's Cup was today emphatically blessed by Port of San Francisco officials as the best deal the city could get. Yet the city's Budget Analyst warned that even under these "best" terms, the city could still end up giving away some $55 million to billionaire yachtsman Larry Ellison.
At least eight studies
While Ellison's "Event Authority" is anticipated to invest the aforementioned $55 million in port facilities, Budget Analyst Harvey Rose told the Board of Supervisors' Budget and Finance Committee that the latest terms still allow that money to be reimbursed by the city's general fund over the next three decades. "This is very important, in my professional judgment," he said. "The Event Authority could end up paying nothing -- nothing -- for infrastructure improvements."
In other words, San Francisco could end up paying everything -- everything -- for infrastructure improvements.
Today's six-hour-plus meeting wasn't enough for the committee to make a recommendation to the full board. The supervisors called for a recess, and will resume arguing about the America's Cup in a special Monday Budget and Finance session.
have been prepared tallying the potential benefits and detriments to the city should the 34th America's Cup be held here. A report released this morning by the controller's office
predicted the "Northern Waterfront Alternative" plan would result in some $50.5 million in city profits over the next seven decades. City economist Ted Egan, however, noted that the plan currently on the table is not the same as the one he crunched the numbers for.
For starters, the city is now offering up Piers 26 and 28 for development, which wasn't mentioned in Egan's analysis. Rose hasn't had a chance to parse the costs related to the new piers, either.
Both port director Monique Moyer and Brad Benson, the port's special project manager, told the supes the offer on the table -- which has not yet been agreed upon by the Event Authority -- is the very best San Francisco can hope for. Moyer described the current iteration of the America's Cup plan as "an amazing dream come true for us." She noted that the piers in question -- 26, 28, 30, and 32 -- currently have "no plan" in their future. The alternative would be to let them rot.
Today marked the official death of the original "Host City Agreement," in which San Francisco would have given away large swaths of land and been responsible for rebuilding Pier 50 and evicting and relocating its tenants. The "Northern Waterfront Alternative" potentially shifts much of the sailing northward, intuitively. Per the controller, it takes San Francisco off the hook for some $16 million in dredging costs. And, by charging "fair market rent" for waterfront land rather than simple ceding it to a billionaire
, the city could stand to make money (Rose's contention regarding general fund reimbursement was not addressed).
Several supervisors, however, were skeptical over the offer, noting that no written proof has been produced to establish that any other cities are in the hunt for this event, meaning San Francisco is essentially bidding against itself.
Moyer claimed she never expected to see other cities' written offers, while Supervisor Ross Mirkarimi, a Rhode Island native, said he's sure Newport is clamoring to host the event once again following any "glitch or defect in our process." Kyri McClellan, an economic development aide to the mayor, emphasized that the Event Authorities were duty bound to select a host city by Dec. 31. This ostensibly justifies the rapid process of signing on to a murky and complicated financial deal, and renders Supervisor David Campos' suggestion to slow down for two weeks of analysis impossible to accommodate.
Another Rose talking point was that some $32 million the mayor's office has said will be raised by private donors is not guaranteed
. Supervisor David Chiu today requested language be inserted into the deal allowing the city to walk away from the table should the private donors falter.
Interestingly, as pointed out by Supervisor Sean Elsbernd, the city has only until the end of 2012 to walk away -- and the private interests are only bound to raise $10.5 million by that time. So if the fund-raising stalls after that point, the city is apparently sunk.
Questions about that matter -- and a desire for the Budget Analyst's office to go over the latest numbers regarding Piers 26 and 28 among other developments -- led to the call for a recess until Monday. Campos, for one, was worried about the possibility of the city being dragged into litigation overseas or being bound to empty its general fund during a budget shortfall.
When asked how long it would take him to prepare a new fiscal study, Harvey Rose said it would require at least one week, maybe two -- but, not unlike Scotty from Star Trek
, he promised to have something
ready by Monday, Dec. 13.
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