View Full Version : SF About To Get Scrooged?

12-20-2010, 01:02 PM
We have been following the ongoing trials and tribulations (http://www.pressure-drop.us/forums/forumdisplay.php?26-America-s-Cup-34) about the Americas Cup Host City process for nearly a year now,
and the overwhelming joy that the speculation of actually holding the Cup in San Francisco has certainly had its ups and downs. With 12 days until the 31st when the Cup Host City is due to be announced, there is further speculation that Newport Rhode Island is about to be announced as the new front runner by some groups. In fact there is a scheduled announcement of some sort to be made by the RIEDC and the Cup Authority this afternoon which may or may not define the fate of the Cup and San Francisco.

So in the spirit of the season we offer this mini-cup Christmas Carol for your entertainment!


The Books! The Books! They don't add up!


The shackles of a bad decision are forever, don't let this haunt you my friend!


There is but one person with the key!


Let the old man do his job and bring the Cup to SF, and make this a Christmas to remember!

IOR Geezer
12-20-2010, 02:06 PM
Well played!

Charlie Tuna
12-20-2010, 02:44 PM
Hope you were not expecting any Oracle items in your stocking!

PD Staff
12-20-2010, 03:32 PM
America's Cup organizers say RI a top contender to be host
5:49 PM Mon, Dec 20, 2010

NORTH SMITHFIELD, R.I. (AP) -- Organizers of the next America's Cup say Newport is a top contender to host the most prestigious sailing competition in 2013.

Golden Gate Yacht Club board member Tom Ehman said Monday that organizers are serious about holding the contest in Newport, but need assurances that Fort Adams State Park can be ready in time.

Newport is competing with San Francisco and other locations to host the competition. A venue decision is expected by Dec. 31.

Rhode Island officials say hosting the event could produce thousands of jobs in a state with about an 11-percent unemployment rate.

Rhode Island launched an aggressive bid this year to bring the America's Cup races back to Newport, which hosted the competition from 1930 until 1983.

PD Staff
12-20-2010, 03:35 PM
So much for the idea that America's Cup race organizers were just courting Newport R.I. to get San Francisco to sweeten its bid for the 2013 races.

Facing a self-imposed Dec. 31 deadline to inform competitors about the location of the next regatta, race organizers say they are pursuing efforts to return the Cup to Newport, R.I., home to sailing's most prestigious event for decades.

"We are very serious in our intent to move forward with Rhode Island," Stephen Barclay, an official for BMW Oracle Racing and the Golden Gate Yacht Club, said in a letter to Rhode Island's economic development chief that was released today. "There is much to do to meet the timeframes we have set."

America's Cup officials, after voicing displeasure with the financial terms of San Francisco's bid, were talking with Rhode Island leaders as Mayor Gavin Newsom's administration put the finishing touches on its proposal last Tuesday.

Even after last-minute tweaks by San Francisco, talks in Rhode Island continued into the week, including meetings with Gov.-elect Lincoln Chafee, state Sen. M. Teresa Paiva Weed and Keith Stokes, head of the Rhode Island Economic Development Corp.

A letter from Barclay to Stokes that Rhode Island official released today reads: "Over the past week, you have clearly presented why Rhode Island, and Fort Adams State Park, in particular, has the capability to host the 34th America's Cup, one of the largest sporting events in the world in terms of economic benefit and mass media audience."

BMW Oracle Racing, owned by Oracle CEO Larry Ellison and sponsored by San Francisco's Golden Gate Yacht Club, captured the cup in February. The winning syndicate gets to choose where the next race will be held. Holding the cup in San Francisco is projected to create more than 8,000 jobs and inject $1.2 billion or more into the local economy.

Barclay, in an email, said San Francisco is not out of the running and no decision has been made yet.

But there's another interesting element in his letter to Stokes, where he writes: "On our side we must establish how the teams, visitors and VIPs will be accommodated and how we will raise the necessary corporate sponsorship."

The San Francisco proposal calls for a newly formed America's Cup Organizing Committee of influential and deep-pocketed civic and business leaders to raise $270 million in corporate sponsorships for the event. Barclay's letter suggests race organizers would take on that responsibility themselves in Rhode Island.

Perhaps race organizers view any potential land deal in Newport to be more valuable than the development rights to Piers 30-32 and the adjacent Seawall Lot 330 that San Francisco is offering. Barclay's letter indicates the Newport idea calls for team bases and public race facilities to be located at Fort Adams State Park, an 80-acre historical site containing the largest coastal fortification in the country.

Team officials are being tight-lipped on the Rhode Island proposal, but Stokes told the AP that it would cost race organizers as little as $10 million to make inprovements to hold the races in Newport. That's compared to at least $55 million race organizers would pay to shore up crumbling San Francisco piers. Race officials estimate that holding the event in San Francisco, including infrastructure work and pre-Cup races, would cost them about $500 million before factoring in income, like sponsorships.

Of course, all of this comes after race organizers in July announced that San Francisco was the only U.S. city in contention to host the next Cup, beating out previous hosts San Diego and, you guessed it, Newport.

Read more: http://www.sfgate.com/cgi-bin/blogs/cityinsider/detail?entry_id=79450#ixzz18hKw0HMu

Pete Rowland
12-20-2010, 05:54 PM
I'm for having SF host the AC34 as much as the next bay area sailor, but do you think SF was ever really in contention given the boat choice? It seems to me the announcement of huge stayed rig cats as the next class of AC boat was when Larry's hand tipped. Stayed rigs in windy conditions, a lack of runway for ultra fast boats, and an ebb chop which would wreak havoc on boats designed on the edge of structural limitations are all realities of sailing in the bay which make SF an oxymoronic choice. The flat water and light winds of Newport is a more logical venue given the type of boats to be raced. I'm just sayin' ...

Old Codger
12-20-2010, 06:07 PM
The winds and chop that are a part of sailing in San Francisco are what makes it attractive. The wind/wave height limitations of the Valencia race took away much of what AC is for me.
Of course, I still think that the boats should get to the defender's designated location on their own hulls. Yes, the Defender ought to sail their boat on it's own hull from GGYC in San Francisco to Newport if that's the final location chosen.

12-20-2010, 07:28 PM
December 20, 2010
Way Beyond Kicking Tires
by Stuart Streuli
As Monday’s meeting of the Rhode Island Economic Development Corporation broke up, I sidled up to Tom Ehman of BMW Oracle Racing and put it as straight as I could.

“Are you just kicking tires?”

He looked me straight in the eye and shook his head.

“No, we’re way beyond that,” said Ehman. “I went all the way to Michigan [his native state], came back here. We brought a bunch of people in here, spent a lot of money. Larry [Ellison] has a house here.

“We’re looking for the best possible facilities that will happen reliably on July of 2012 and in a way that’s not expensive.”

Among the BMW Oracle Racing officials that visited Rhode Island last week were COO Stephen Barclay, Craig Thompson, CEO of the America’s Cup Event Authority, the organization tasked with running the event, and Iain Murray, the Australian Cup skipper from 1987 who will serve as regatta director for the contest.

But does this mean they are serious in their intentions; and not simply looking for leverage to get San Francisco to sweeten the deal. Who knows?

To his colleagues, Ehman is “The Chairman,” a man who’s experience working behind the scenes of the America’s Cup dates back to 1983. Others in the America’s Cup circle call him, not to his face, however, by less salutatory nicknames. Regardless of his reputation, he works for Larry Ellison and BMW Oracle Racing. And while he has an affinity for Newport—he’ll remind just about anyone who asks about Newport that he spent a number of years here in the late 70s and early 80s and was one of the founding forces behind Sail Newport, the public sailing facility that rose up when the Cup left in 1983—his job is to get the best deal for his team. If cozying up to Rhode Island without any serious intentions of consummating the deal—again—serves a purpose, then he would be negligent in not doing so.

Hopefully Keith Stokes and the rest of the Rhode Island Economic Development Corporation had some hefty grains of salt in their pockets, though their abject enthusiasm, and Stokes’ irrepressible optimism would seem to indicate the state is all in.

“As a Newporter, I’ve always believed that San Francisco was a stalking horse for Newport,” Stokes said with a slight grin Monday evening. “I have absolute confidence in my community and who we are and our identity in sailing.”

However, the likelihood of last week’s multifaceted reconnaissance mission being a large charade seems to be sinking slowly. For one, the offer approved by the San Francisco Board of Supervisors last week has been deemed by multiple people inside BMW Oracle Racing as not acceptable because it puts too much financial risk onto the event authority, which would need to somehow come up with close to $300 million for the required infrastructure. The numbers for a Cup Match in Newport are a small fraction of that.

“We’re not looking for public funding of teams or the event,” said Ehman. “We’ll go out and get sponsors and television. What we’re looking for is shoreside facilities for a world-class event. That’s become expensive in San Francisco. And it looks like it’s available here, now, at a very reasonable rate to everyone in what could be a world-class event facility.”

Read More at Sailing Worlds Blog:


Sailing World
12-20-2010, 07:32 PM
Crikey Erik, I filed that story like 2 minutes ago, and you've already snaked it!??! Don't you have anything better to do? Here's the link, http://www.sailingworld.com/blogs/way-beyond-kicking-tires just in case you'd like to support the source of the journalism (yes the click-thus do matter). Hopefully I don't sound like a homer. Obviously, the Cup in my backyard (Newport) would be mighty convenient. But I'm not ready to buy everything they're selling. Tried to report it as objectively as possible.

-Stuart Streuli, Sailing World

12-20-2010, 07:36 PM
Time waits for no man...nice report homer....your click clicky thing is right there...

P. S. Packers shoulda won last night...


12-20-2010, 07:45 PM

Can I get the assignment to cover ifin Newport is awarded the Cup?


Best wishes for a Happy Christmas!

Old Codger
12-20-2010, 08:16 PM

Can I get the assignment to cover ifin Newport is awarded the Cup?


Best wishes for a Happy Christmas!

Pink flag?
Sorry, couldn't resist.

12-20-2010, 08:23 PM
Thalt shalt NOT MOCK the Media's Internationals Colors...it's right there in the handbook....

12-20-2010, 08:29 PM
Is SF's Cup Bid on Shaky Ground?
December 20, 2010 – Larry's Mind's Eye

With its government having pulled out all the stops to put togther a bid to host the 34th America's Cup, San Francisco is far from a lock to host the event. Most recently, reports that BMW Oracle Racing team officials have been meeting with representatives from Newport, Rhode Island, Dubai, and a nebulous Italian venue have done a great deal to cast doubt on San Francisco's bid. Given that the team's imposed deadline for a bid from the City has already passed, we're at a loss as to what the team hopes this will accomplish. It's too late to be a negotiating ploy, which leads us to believe that all the effort put in by the sailing community, San Francisco government and civic leaders may have been in vain all along.

First of all, what's with all this Newport, Rhode Island business? What happened to San Francisco being the only U.S. city under consideration? Ellison can do what he wants with the Cup — it's his perogative as the winner — but he's going to have a hard time arguing that the signed, sealed and delivered deal from the City of San Francisco will have a deleterious impact on the event. Which is the only believable argument from someone with a personal fortune estimated in the neighborhood of $27 billion. He's going to have a hard time convincing us that Newport will generate the same kind of international appeal and enthusiasm around the Cup as San Francisco will.

The thing is, by this point in the process, San Francisco is a known quantity. Ellison and Coutts know what they'll get here, the terms are spelled out. It seems highly doubtful that Rhode Island, motivated as it is to get the event, would be able get a host city agreement together and voted on by the end of the year. So, if they were to choose Rhode Island, BMW Oracle Racing either must risk announcing the venue without having a host city agreement in place, or put off the venue announcement and risk being sued by a challenger for not sticking to the protocol.

The team's COO Stephen Barclay has been all over the wires with his claims that the deal was changed late in the game and that's what caused the team to look elsewhere. But the reality is that the deal only changed because the original one no longer had the support of the majority of Board of Supervisors, due in part to the fact that the City government rightly uncovered the myth the team made every effort to perpetuate — that of the bogeyman Italian venue (while the European economic crisis swelled to a crescendo) — and that even if that competition was real, it wasn't worth giving away the farm for anyway.

Ellison and company kept pitching the importance of an incentive — it's still there in the revised deal, by the way — to bring the 34th Cup to the Bay. But nowhere was there any call to create an incentive for the team to keep it here. For instance, tying the length of the leases on Piers 30/32 and Seawall Lot 330 into the future editions of the Cup, which is an incentive that would seem fair to us.

The truly wrenching thing about the whole state of affairs is that the format and the boats are so brilliant, so inspired and so necessary that there's not much we can find fault with in the vision that Coutts and Ellison are trying to execute. But what we can't understand is, why not have the most radically progressive and innovative America's Cup in history in a milieu that radiates those qualities? If Ellison wants to have it here, he can have it here. He won't lose a ton of money to put on the regatta with the deal he has before him. Like it or not, we're about to find out what his primary motivation has been all along.

- latitude / rg


IOR Geezer
12-21-2010, 11:22 AM
"Playing both ends toward the middle" comes to mind with these negotiations.

12-21-2010, 12:06 PM
Interesting insights via a conversation with Stu just moments ago, will jot down pertinent info and post shortly

Donut Town
12-21-2010, 12:17 PM
Nice article Stuart.
Let me see if I have this right. In SF they needed 'world class' showcase facilities with iconic architecture and hundreds of thousands of square feet with 70 foot TV screens dotted about, but in Newport they only need to bolt together a few 40 foot containers - you know Puma racing style (cuz Kenny said that'll do) and all is good?
And there was nowhere in SF that they could have bases up and running by July 2012?


Maybe some folks need to pull some snotty snot out of their noses and develop a better relationship with reality.

Donut Town
12-21-2010, 12:41 PM

Donut Town
12-21-2010, 12:52 PM
Keep seeing all these familiar names, all belonging to the same club...


12-21-2010, 03:06 PM
A brief discussion with Stu revealed a few intresting point as to why RI is such an easy choice for plan B in hosting the 34th America's Cup, and while there still remain the wait and see attitude. it
was noted that due to the diligence of the RIACPC and the work to lay down the tracks for the World Series of Sailing events already being established, hosting the event at the State Park is an easy. inexpensive fix.

Unlike SF, there are no land grab implications, the Fort Adam State Park is a sprawling, underutilized Cival War Era state park on the south end of of Narragansett Bay, most recent used for the annual Newport Folk and Jazz Festivals


It's readily rentable:

"Historic Fort Adams, Newport’s Premier Waterfront Venue, is available from mid-May through October for wedding receptions & ceremonies, rehearsal dinners, brunches, corporate events & outings, social events and public events including concerts and reenactments"


The proposed sailing itself is questionable:


Larger version (http://www.6mrnorthamerica.com/narragansett.html)

The chart above shows courses for the 6 Meters North Americans. The AC 45 will gobble up
the water in the passage between Conanicut Island and Rhode Island, let alone the 72's. And winds can be fickle, with shift as great as 45-90 degrees due to land masses and structures.

The agreement to host will have to be more of a handshake than a written agreement at this late hour, quite the opposite of the forced deadline for a written agreement imposed on San Francisco and the BOS. What mystifies the folk back east, is just why are things so damn expensive here in the Bay Area, and would the purported $270 Million (?) alleged private sector funds be raised to fund the Cup Hosting?

To the 1st, question, because it is. And the second, we may never know...

PD Staff
12-21-2010, 04:55 PM

Grant Dalton talks about team New Zealands thoughts on the ongoing negotiations and why San Francisco is their city of choice!

Surf City Racing
12-22-2010, 08:27 AM
Pink flag?
Sorry, couldn't resist.

Nooooooo problem!


Sailing World
12-22-2010, 11:03 AM
Just back from today's Cup in Newport rally at the Marriott in downtown Newport. Little of substance regarding Newport's bid or the process in general. But was able to get a few minutes with Brad Read, exective director of Sail Newport, who had been a fairly conservative voice on the RI AC Planning Committee, but now is much more bullish on the Cup match being held in Newport.


Sailing World: Six months ago you were the voice of moderation on the Rhode Island America’s Cup Planning Committee, the one saying the focus should be on one of the World Series pre-regattas and not the Cup itself. What has changed your mind regarding hosting the 34th America’s Cup match in Newport, R.I.
Brad Read: I would say it was BMW Oracle’s understanding of the dynamics of what we had. Their research that has led them down the road that Rhode Island is appropriate in size and has the facilities that they would want for the Cup. There’s a lot of work to be done. This is a lot of work. The key to me is the state of Rhode Island’s commitment to the intermodal transportation, that will be what makes this a success. The new transportation hub at Wickford Junction that can feed into Quonset, that can feed onto fast ferries, that can feed into an infrastructure augmentation at Fort Adams State Park to get tens of thousands of people across the Bay on boats is going to be absolutely crucial for the success of the event. And they believe that the infrastructure is in place and I think Rhode Island believes they can get those people across. Not only [via] the bridge, not only in shuttle busses from outlying parking. But the infrastructure needed for intermodal, by water, exists and that has really led me down to the road to say this is possible.

Can you give us a visual of what an America’s Cup village at Fort Adams will look like? The current vision is much different from the original pitched last summer, which featured team bases along the eastern flank of the fort?
You’ve been to a Volvo Ocean Race village, it’s a lot like that. The shoreside amenities and shoreside bases, the team bases, will be container bases with tent structures where you can put the boat inside, take the wing down, put it in it’s own little tent beside the base. You pick the catamaran up, wheel it into your tent, work on it.

PD Staff
12-22-2010, 11:06 AM
Minor changes are being applied to the agreement between The City and organizers of the 34th America’s Cup regatta to fend off a last-minute effort by Rhode Island officials to host the race.

San Francisco approved a bid to host the world-renowned sailing race on the northern waterfront of The City. In the past week, however, race organizers have openly courted Newport, R.I., to host the event. In response, San Francisco officials were re-examining parts of their bid.

“They seemed dissatisfied with some key components of our bid,” Mayor Gavin Newsom said Tuesday. “We’ve been working aggressively behind the scenes to address those concerns.”

That meant a late conference call Monday night with representatives from the Golden Gate Yacht Club — sponsors of billionaire Larry Ellison’s BMW Oracle Racing team — in which several amendments were made to the agreement. Newsom would not say what specifically changed, but the Board of Supervisors has given the Mayor’s Office the power to make amendments as long as the major components of the agreement remain intact.

“We could clarify intent,” Newsom said. “You could amend language from an administrative perspective. You could organize around some of the key issues within the spirit of what was passed by the board.”

The current agreement will expire Dec. 31 if race organizers do not confirm San Francisco as the host city. Race organizers set the deadline in order to allow racing teams time to enter the competition and woo sponsors.

But with the resurgence of a new candidate to host the race, Newsom said he was unsure if the organizers would stick to the year-end deadline. Rhode Island officials are offering a hasty, publicly funded option in
Narragansett Bay.

“Our bid’s being shopped. We know that,” Newsom said. “Does that make me happy? Of course not. But that doesn’t make me pessimistic.”

Read more at the San Francisco Examiner: http://www.sfexaminer.com/local/2010/12/officials-work-keep-americas-cup-bid-alive-after-rhode-island-interest#ixzz18rvz3NmH

Old Codger
12-22-2010, 11:29 AM
Just out of curiosity... "Billionaire Larry Ellison" brings up 2,410,000 results on a search. "Larry Ellison" brings up 8,890,000. So a quarter of the authors of those articles believe that Mr Ellison's given name is Billionaire.

IOR Geezer
12-22-2010, 12:08 PM
Speaking of which, my sources tell me Mr Ellison is currently having a gazillion dollar mega estate built for himself in Incline Village, on Lake Tahoes North Shore.

What are the chances of Dogzilla being packed up and used for quick trips to South Shore?

PD Staff
12-22-2010, 01:18 PM
San Francisco Mayor Gavin Newsom is working around the clock in a last-ditch effort to keep the city's bid for the America's Cup alive - even as Larry Ellison openly courts Newport, R.I.

"We are in the red zone," Newsom said Tuesday evening.

San Francisco's bid for the 2012 race took a sudden dive last week when Team Ellison began talking very publicly with Newport about holding the race there.

"I would like to believe that our deal was not used as a negotiating strategy to leverage a deal in Rhode Island," said Supervisor Ross Mirkarimi, a key backer of San Francisco's bid.

That's exactly what is happening, however. Although everyone is trying to keep on the high road, the folks at City Hall are anything but smiles as they try to deal with Ellison's group.

According to Newsom, the negotiations are not over what piers to use or how much public money to spend, but rather about tax increment financing and other financial details.

"This is a billion-dollar economics package, with thousand of jobs and a big investment by their organization. I can understand their need for certainty," Newsom said.

"I've been on the phone steadily for the past five days," the mayor said. "The one thing we can't afford to do is get petulant and throw up our hands or start pointing fingers."

Besides, there will be plenty of time for that if Ellison raises the anchor and heads east.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/12/21/BA4K1GTSIC.DTL#ixzz18sTRMMx7

Pete Rowland
12-22-2010, 02:24 PM
From Brad Read in the sailing world article: "Their research that has led them down the road that Rhode Island is appropriate in size and has the facilities that they would want for the Cup."

My previous post:
"I'm for having SF host the AC34 as much as the next bay area sailor, but do you think SF was ever really in contention given the boat choice? It seems to me the announcement of huge stayed rig cats as the next class of AC boat was when Larry's hand tipped. Stayed rigs in windy conditions, a lack of runway for ultra fast boats, and an ebb chop which would wreak havoc on boats designed on the edge of structural limitations are all realities of sailing in the bay which make SF an oxymoronic choice. The flat water and light winds of Newport is a more logical venue given the type of boats to be raced. I'm just sayin' ... "

It really doeasn't matter what Newsome does to sweeten the pot or what Kimball Livingston has to say, SF just isn't compatible given the AC34 boat choice. Why else would we have a venue come into into the picture so late in the bidding process? It's simple .... Ellison never really wanted to race here, he's just gone through the motions with an already forgone conclusion in order to save face.

PD Staff
12-22-2010, 02:31 PM

Variation on a theme

While the pulse of San Francisco's chances to land the America's Cup may be sliding toward demise, the offer the city put before Larry Ellison and the cup organizers is very much a living document.

The "final agreement" bid unanimously approved by the Board of Supervisors and signed by the mayor is actually neither final nor an agreement. So as Newsom continues negotiating with the sailing mavens to wrest the Cup away from Newport, Dubai, the Sea of Tranquility or God knows where else, he can alter the arrangement.

"According to Newsom, the negotiations are not over what piers to use or how much public money to spend," reported the Chronicle today, "but rather about tax increment financing and other financial details."

While "tax increment financing" sounds like a niggling detail, however, it could translate into millions of dollars spent out of city coffers and would affect the city's deal with big landowners for up to three-quarters of a century.

Tax increment financing -- also known as "incremental property tax" -- is something SF Weekly wrote about earlier. Essentially, it's a perk that would allow the "Event Authority -- the organization controlled by yachting billionaire Larry Ellison that's putting on the America's Cup -- or whomever owns the waterfront land the city is giving up to recoup investment costs.

So while the developers pay out at least $55 million in infrastructure costs for Piers 30 and 32 and Seawall Lot 330, they eventually get the money back -- and from city funds. Incremental property taxes mean the property owner is reimbursed the additional tax paid on land now assessed at high values due to that infrastructure work.

It's uncertain what, exactly, is being negotiated with regards to tax increment financing. But to shrug it off as trivial would be a cavalier assumption. "It could be very significant," says Fred Brousseau, a principal in the Budget Analyst's office who prepared multiple fiscal feasibility analyses regarding the city's America's Cup bid. "While it is speculative what aspects it's concerned with, it sounds like the discussion is about long-term development."

And that's the thing about long-term development. It's long-term.

Perhaps by the end of the year, San Francisco will know if it gets to host the America's Cup. Learning how much it's gonna cost us -- that may take far longer.


PD Staff
12-22-2010, 02:48 PM
How many can you find?

No doubt about it- Larry Ellison makes people nervous. Which may be one of the reasons he was blackballed by the San Francisco Yacht Club. Of course, he famously went a few yards down shore and bought the Golden Gate Yacht Club so he could compete in the Americas Cup. All of that is ancient mariner history now, but this week he's making people on opposite coasts nervous- in San Francisco and Newport, Rhode island and our Mayor's been on the phone.

To recap: earlier this month, San Francisco turned around and decided not to give Ellison a sweet deal on a stretch of waterfront in exchange for infrastructure investments, and presented a smaller venue along the North Embarcadero. So Ellison's team began shopping their event to other waterfront cities, and they found a heartbeat in Newport.

Why Newport makes a good alternative, plus other worries >>
Newport has a long nautical and yacht-racing tradition (most of the wooden boats in past America's Cup races were built in nearby Bristol) and excellent sailing, and a very choice site- Fort Adams State Park- sixteen waterfront acres often used as a venue for the Newport music festivals and musket-wielding re-enacters. But with their economy in the gutter, Rhode Island is really worried about having to come up with the cash to support the event, up to $50,000,000. By the end of the month. So far, however, no one in Rhode Island has muttered the dreaded words "Environmental Impact Report."

Meanwhile, Ellison's event may be shrinking. There are only four confirmed teams, plus one whose identity has yet to be revealed, and with the exception of Oracle/BMW, all based in Europe. Newport is closer- seriously, who wants to sail through the Panama Canal? The entry fee has been reduced by two-thirds and teams given an extra five months to remit. More critically, the looming financial crisis in Europe may deter corporate sponsors from fully funding even the teams now on the roster. According to the Telegraph, sponsors pony up at least £30M a year over three years, which translates roughly to $140,000,000. So Newport may well win out- a smaller, equally scenic venue, less fog, less upfront costs for Oracle/BMW, plus a much more desperate local government. Enjoy a little tour of the waterfront competition, above.

http://sf.curbed.com/archives/2010/12/22/newport_vs_san_francisco_will_ellison_sail_east.ph p

PD Staff
12-22-2010, 02:50 PM
01:00 AM EST on Wednesday, December 22, 2010

By Kate Bramson

Journal Staff Writer
Advocates at the heart of Newport’s efforts to lure the America’s Cup back believe Rhode Island’s woeful economic status could help the state raise federal money to upgrade the proposed site, Fort Adams State Park.

But it remains unclear how the Ocean State would cobble together anywhere from $10 million to more than $50 million to prepare Fort Adams to be the world-class sailing venue that reigning champion BMW Oracle is seeking.

It also remains unclear how Rhode Island would find the funds by Dec. 31, BMW Oracle’s deadline for announcing its host city.

“I can’t see it happening in 10 days, but I can see it happening in a couple of months,” said longtime yachting expert Halsey Herreshoff, who is on the 11-member committee formed this year to attract the Cup or pre-regatta races. “The reason it might be easier now is the big emphasis on job creation.”

Aside from the America’s Cup being an economic boost in tourism for the state, it would clearly bring jobs to Rhode Island, too, said Herreshoff, who was a crewman aboard four America’s Cup defender boats, from 1958 to 1983, the year Newport lost the Cup.

Keith Stokes, director of the state Economic Development Corporation, said Monday that BMW Oracle would need to make a leap of faith that everything in Rhode Island would fall into place if it’s to meet its self-imposed deadline.

In Newport, Mayor Jeanne-Marie Napolitano said the city is working to improve Fort Adams, but “by and large, it would have to be a state initiative” to raise that kind of money.

“I certainly think that perhaps they can look federally for some money,” she said. “Knowing the economic condition of the state, I think it would behoove us to turn over every rock we can.”

Napolitano, who said it appears she may lose her position in coming weeks on a council that elects its own mayor, said the Cup’s return to Newport would be a great opportunity for the whole state.

“I think it would be terrific,” she said with a laugh. “It would be like old home week.”

“With the economy being what it is for the State of Rhode Island, I just think it would be a real feather in their cap if everyone can work together to make it happen.”

Rhode Island resumed its bid to reclaim its place in yachting history when negotiations in San Francisco turned sour last week and BMW Oracle took a serious look at Newport.

In its bid to host the Cup races, San Francisco pledged that a committee of civic and business leaders would help raise $270 million in corporate sponsorships for the event.

It’s unclear if Rhode Island would need to make similar promises.

“Since these new discussions are just beginning, the amount of money needed to be raised is unknown at this point,” said Stephanie Martin, chief communications officer for the 34th America’s Cup Event Authority, in an e-mail.

Martin said each venue option would require different levels of funding, depending on what infrastructure is needed and how much it would cost to run the event. While Martin said a committee like the one in San Francisco has not been discussed for Rhode Island, “there would be the need for a commitment of local support in raising of sponsorship monies, working in conjunction with the America’s Cup Event Authority.

“Again, there is work to do to understand what that dollar figure is.”

Martin said the Event Authority remains committed to the Dec. 31 deadline.


Old Codger
12-22-2010, 03:38 PM
"While "tax increment financing" sounds like a niggling detail, however, it could translate into millions of dollars spent out of city coffers and would affect the city's deal with big landowners for up to three-quarters of a century.

Tax increment financing -- also known as "incremental property tax" -- is something SF Weekly wrote about earlier. Essentially, it's a perk that would allow the "Event Authority -- the organization controlled by yachting billionaire Larry Ellison that's putting on the America's Cup -- or whomever owns the waterfront land the city is giving up to recoup investment costs.

So while the developers pay out at least $55 million in infrastructure costs for Piers 30 and 32 and Seawall Lot 330, they eventually get the money back -- and from city funds. Incremental property taxes mean the property owner is reimbursed the additional tax paid on land now assessed at high values due to that infrastructure work. "

Great spin... "they eventually get the money back -- and from city funds." No they don't get the money back. The city never gets the money in the first place nor is the city foregoing revenue that it's currently getting. The city just forgoes revenue in the amount of what it would take to rebuild the piers in the first place instead of taxing the shit out of derelict structures that the city and or other governments would eventually have to spend on fixing up those structures. After the structures are rebuilt and the amount of the rebuild is recouped then the city can go and tax the hell out of the developed structures at their usual modest levels.

30/32...Oh, and the answer to my question about whether or not much of the existing structure can be used as fill or would have to be hauled away.
If there's a drop of motor oil on any of that material it has to be hauled away, can't be reused.

PD Staff
12-23-2010, 11:17 PM
On the San Francisco bid, about which Barclay is much more easily able to discuss, given that its details, costs, investments and timelines have all been put into the public domain by the City, we turned to the issues of environmental approval process – which is expected to take 12 months.

'The San Francisco deal is for the CEQA process to be complete by October 2011. The San Francisco City cannot guarantee that process. Our initial position with them was that we wanted an exemption from it. We were counselled by them and other groups to remove that request and to work with them and get approval on the consents.

'They want to make a model of the America’s Cup to show others how the CEQA process can work, and they want to work collectively with us to get that done.

'We wouldn’t select them thinking we were going to go through that process and get a dud result.'

11-0 seen as decisive
Many close to the action in City Hall at San Francisco regard the Board of Supervisors vote at 11-0 in favour of the Agreement, as being very decisive and as a show of solidarity by the 'Supes' and that unanimity is a strong factor in getting the CEQA process completed in the allowed time.

Barclay agrees: 'I think that 11-0 is very strong. We were very pleased with that level of support.'

'One thing to highlight is that it shows the degree of change in the San Francisco agreement to go from 9-2, with one of the dissenters saying he would do everything in his power to kill the deal, to a position where all eleven voted in favour of their revised bid.

The factor that swung the deal to get that unanimity amongst the Supes was to move to a more northern location with a different set of piers- some of which have a remaining life of just five years, maybe ten.

'We can’t use them', is Barclay’s opening comment. 'We have to spend 50-100 million dollars to get then usable'

'If we select San Francisco, the day after we have to sit down with them and look at the documentation required to go through the CEQA process. That process will be complete by October 2011, and we believe it will be affirmative. That will get the piers up to the standard where they are usable.'

'Then we have to spend a few months sorting out other issues. The construction starts on 1st January 2012. That takes 12 months, and then the piers are ready for the America’s Cup Event Authority to take over on 1st January 2013, to prepare them for the event.'

In construction vernacular, the 'horizontal' being the piers will be done by 1 January 2013, and then the America’s Cup Events Authority starts constructing the team bases or 'the vertical', which also includes the public area.

Different build from Valencia
Valencia type permanent structures will not be used, rather the intention is to build Formula 1 type semi-permanent (vertical) structures which can be removed and the horizontal piers put to another use once the America’s Cup has moved on.

For the World Series venues, as completely temporary facility will be erected, and Barclay says the structures will be more permanent than the 'tin sheds' in Auckland, but not to the level of construction seen in Valencia.

The point being that the short time allowed for construction of the vertical is quite achievable, in the time that has been allowed.

In the last week, Barclay says, the City of San Francisco have approved the cruise terminal at Pier 27. The shed currently on the site will be removed and the facility that is put in its place will be both good for the America’s Cup use, and as a cruise ship terminal.

'I don’t know how the Northern Alternative is going to work, because it is very new to us', he adds, 'but it is a good example of how a private and public partnership can work to help us both save money, if we are smart.'

The lack of an Event Fee is something that seems to differentiate the Italian bid from the US bid.

'In America there is not the opportunity for them to be able to guarantee an Event Fee and guarantee sponsorship. We have to be innovative as to how we arrive at those things.'

In the San Francisco deal, which is public, they have set up a private company which is full of public sector influential people including the Governor of California, plus very influential private sector individuals. That group is tasked with raising $270million. Given the calibre of the people involved, we think there is a very strong chance they will achieve that goal

'It is just a different way of achieving the Event Fees that other governments will just pay or guarantee.'

Other positives for San Francisco
Turning to the other issues, for and against San Francisco, Barclay says 'We all know that San Francisco Bay is a fantastic amphitheatre for sailing, so we can put a tick in that box.'

'The other thing that hasn’t been talked about too much is that San Francisco can create a real linkage between America’s Cup 'village', and the City. Take in what was achieved with Auckland and the Viaduct Harbour, multiply that by several times because San Francisco is a massively international City, and you have an idea of how the City is going to embrace the America’s Cup.

'The property deal in San Francisco is because the City’s balance sheet won’t stand upgrading the piers. The Event Authority is going to have to spend in the vicinity of USA$100million to make the piers usable for the America’s Cup.

'In return we receive long term development rights, which would be worth more than the original rights due to the length of time to get back the original investment– its a complex deal! At this stage, we haven’t even looked at how those long term rights might be used and in any case, will involve the City and Port in those decisions. All that we need to know is that at the end of the event, the Event Authority will get its money back.... even though it might take a long time. That is the key concept to understand.'

Barclay says they would prefer not to have to be involved in property development, and just take over the 'horizontal' as the Event manager and teams did in Auckland.

Discussions with San Francisco have come down to the wire because the agreement negotiated over four months was changed.' says Barclay.

The major differences were the change in the two deals was the change of location which Barclay says doesn’t worry them too much, in fact it could be better as it is closer to the race area.

'The real problem is that we haven’t had time to do due diligence on the Northern Alternative. It came out the blue. Can we take the risks? We are talking about several hundred million when the cost of running the event and infrastructure spend is added together.

'The point we made to the City is that they were given the opportunity to balance their books, we should be given the same.'

The Balance the Books argument is critical for both parties. Under the original deal, the City claimed it had to invest up to $100million, and under the new deal, under one view from their Budget Analyst, it is cash positive for the City.

The current deal, according to Barclay, is neutral to the City, largely by virtue of elimination of dredging costs and relocation of tenants off Pier 50..

'What was publicised was that the location had moved north and saved the City a lot of money. What wasn’t publicised was that there were two other major parts of the deal. First they had changed the responsibility for the infrastructure works and second they had changed the financial arrangements associated with the property transaction.

'They added significant risk to the Event Authority and that is why we came out and said that this deal will not pass muster.'

'What we told them was that we can’t enter into an arrangement that puts the Event itself at risk. 11-0 is fantastic for the Board of Supervisors. But on the other side we had to have the chance to balance our set of books just as they did with theirs.'

'The good news is that message has got home.'

Barclay won’t say if they are out of the woods with City Hall. 'We are in discussions' is his only comment, 'and those discussions are at the highest levels and are heading in the right direction', he adds.