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The Cup Runneth Over: S.F.'s America's Cup Decision Looms 

Wednesday, Feb 15 2012

Illustration by Andrew J. Nilsen, based on The Great Wave off Kanagawa by Hokusai.

A century ago, Daniel Burnham, the preeminent architect of his day, presented San Franciscans with a glistening vision of their city's future: An ethereal stairway from the Castro to Twin Peaks; massive gardens covering five times the area of Golden Gate Park; and, triumphantly, a towering obelisk at Market and Van Ness marking the "great central Place" where 11 major streets would converge.

San Francisco had little patience for glistening visions in the wake of the 1906 earthquake. The city was rebuilt, expediently, atop the ruined foundation that existed before — and, largely, exists to this day. The Burnham Plan was consigned to the history books.

Today's glistening visions feature mockups of America's Cup venues complete with digitized, conspicuously attractive people gaping at catamarans the size of 13-story buildings ripping through the bay. Preliminary construction work on the scheduled 2013 regatta is already under way.

Yet the status of the boat race is not on solid ground. In the next two weeks, the city and race organizers will tussle over the long-term development ramifications tied to the America's Cup, culminating in a Board of Supervisors vote scheduled for the end of the month. The impact of that vote can't be overstated: San Francisco will decide whether the Cup will be tossed alongside the Burnham Plan in the "What if?" file, or whether it will impose a transformative impact along the city's waterfront for generations to come.

Nautical metaphors have been en vogue since Oracle CEO and yachting billionaire Larry Ellison in 2010 turned his eye to holding the America's Cup in this city. So here's one more: San Francisco has taken a long walk on a short pier, and has reached the point where it must decide whether to leap aboard the ship or let it sail off. The cost of this America's Cup voyage will only become truly clear once the pier is receding in the distance. But this much is sure: It's not going to be cheap.

In the last month, the city has quietly downgraded the anticipated number of visitors the event will draw and the tally of spectator boats that will line the waterfront. Millions in private fundraising the city had already assumed in its overall budget has not been delivered — and, last week, the city's budget analyst estimated the logistical costs of holding the event here are now 65 percent higher than previously assumed. Race officials, meanwhile, have denied reports that the number of participating teams will be barely enough to fill a medal stand.

The amount the Port of San Francisco now anticipates it will reimburse to the America's Cup Event Authority — the organization Ellison formed to oversee the race — is double the estimate used when calculating a roughly break-even proposal a year ago. And the anticipated costs of constructing a magnificent new cruise ship terminal on Pier 27 — which would also serve as the centerpiece of the America's Cup — have effectively doubled as well. These costs will either be reimbursed to Cup organizers by the port — or borne by the city and port alone.

The Pier 27 cruise ship terminal and the America's Cup are intertwined in a manner that city and race officials portray as serendipitous. Offering Pier 27 and the northern waterfront as the race's epicenter dislodged the Event Authority from its earlier preference for Pier 50, near AT&T Park — a surefire fiscal bath for the city. Accelerating the development of the pier also gave the city the impetus it needed to finally consummate its longtime dalliance with erecting a cruise ship terminal.

As with people, marrying two complex projects calls for sacrifices and commitments along the lines of "for richer or for poorer." In the case of the port, the proposition of ending up some $40 million poorer as a result of mandatory mitigation projects tied to the cruise terminal struck a nerve. In a January e-mail to staff obtained by SF Weekly, Port Director Monique Moyer laments about the prohibitive cost — which, she worries, may sink the port. "I just don't see how we can commit the Port to financial instability by committing to these obligations. Frankly, the cruise terminal isn't worth the risk," reads the e-mail. "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."

The city broke ground on the project on Jan. 31.

These are just a few of the issues that will be weighing upon the city, the Event Authority, and the Board of Supervisors in the frenetic two-week race leading up to the supes' vote on the binding "Development and Disposition Agreement." Either the terms of the deal can be massaged to meet both the board's and Event Authority's liking, or the supervisors will vote it down — and essentially bid the Cup adieu.

"This is the key turning point. I don't see how we step back once the development agreement is approved," notes Supervisor David Campos, who has said he's unwilling to support the deal as it stands. "We need to make sure we get this right, and not just for us. This is something that will have implications for people who will be living in this city for a long time."

And that's the case regardless of how the supes vote.

In discussions of the fantastically complex terms governing the staging of the 34th America's Cup in this city — and the public money, property, and development rights that will flow to the Event Authority to make it happen — the phrase "The devil is in the details" comes up. Often.

Parsing the 126-page development agreement, however, it's clear that there are details and devils enough for an entire Hieronymus Bosch tableau.

At its simplest — looking past sections on "fires; floods; tidal waves; epidemics; quarantine restrictions; freight embargoes; earthquakes," etc. — the development agreement conveys money and property rights from the port to the Event Authority in exchange for infrastructure work on and around waterfront structures. The authority's first $55 million worth of work will earn it the title to Seawall Lot 330 — currently being used as a parking lot a stone's throw from the Bay Bridge — and 66 years of rent-free occupation of adjacent Piers 30-32, a deteriorating parking structure across the Embarcadero. Additional work by the authority will be repaid via port bonds and rent credits for other piers, or, potentially, future marinas.

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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