America’s Cup: New figures increase loss incurred by San Francisco
Published on February 10th, 2014
(February 10, 2014) – San Francisco’s red ink from the 34th America’s Cup got deeper Monday, with updated figures showing the city lost $11.5 million hosting the event last year for the first time.
Preliminary figures released in December showed the event had cost taxpayers at least $5.5 million, but that number did not include expenses for the Port of San Francisco, a city department with its own budget funded by rent revenue from its property, not taxes.
The Cup had a net cost to the port of $5.5 million, and its cost to the general fund, the city’s main spending account, was revised upward to $6 million, for a total city loss of $11.5 million, according to a new report by the Board of Supervisors budget and legislative analyst.
The report also found that 517 San Francisco residents were employed in 2013 through contracts with race organizers, known as the America’s Cup Event Authority.
A wrap-up economic impact study by the Bay Area Council Economic Institute released in December found that the event created 2,863 jobs, down from original projections of 8,840 jobs. That study also found that the event, which stretched over roughly three months, generated at least $364 million in total economic impact. That figure rises to more than $550 million if the long-planned construction of a new cruise ship terminal, which the regatta served as a catalyst to finally get built, is factored in.
The latest analysis, requested by Supervisor John Avalos, comes as the Mayor Ed Lee’s administration has reached an impasse in negations with software billionaire Larry Ellison’s Oracle Team USA sailing club about hosting the next Cup in 2017.
Russell Coutts, who heads Ellison’s sailing team, recently said the organization is looking at five U.S. locations as possible host sites, including San Francisco, San Diego and Hawaii. The winner of the Cup gets to determine the location and boat type for the next regatta.
Among the team’s objections to San Francisco’s offer to host the event a second time are paying rent for the venue space that was provided last year and being compelled to pay union rates for labor, some involved in the negotiations said.
The report from Budget and Legislative Analyst Harvey Rose’s office, though, specifically calls for the city to charge rent if it hosts the Cup again and to ensure the event authority complies “with local hire and prevailing wage requirements for all events covered by the agreement.”
Source: John Coté, SF Chronicle