Getty Images/Dan Kitwood

The American team's BMW Oracle races in the America's Cup at the Cowes Week Regatta 2010 on Aug. 4, 2010 on the Isle of Wight, England

Dueling scenarios for a multi-year America’s Cup regatta on San Francisco Bay were approved by the Port of San Francisco on Tuesday, with city lawmakers now charged with hastily selecting, crafting and approving a host city agreement with Larry Ellison’s BMW Oracle Racing team.

The team, which is based in San Francisco, won the Cup in February and aims to announce a venue for the next event by the end of December. Following a series of pre-regattas that could be held around the world, the climactic Cup matches are scheduled for the summer of 2013.

Despite earlier claims by race officials that cities around the world were offering packages worth hundreds of millions of Euros apiece to host the Cup, San Francisco remains the only city that has announced a formal bid.

Members of Mayor Gavin Newsom's administration initially negotiated a deal that would permanently displace 26 industrial tenants from the city’s commercially vibrant Pier 50 to clear space for race operations.

Dozens of other Port of San Francisco tenants would also be affected, including bulk cargo operators farther south at Pier 80.

The proposal could cost San Francisco and its port division, which oversees state land, upwards of $128 million, including lost waterfront rent, interest payments and foregone land development opportunities, the city’s budget analysts found.

Aides to Newsom say the budget analyst’s report overestimated public costs, in part because America’s Cup organizers have agreed to help raise funds to offset city costs and because Ellison’s team would improve and take over piers that are so dilapidated that they serve little public use.

The proposal would provide piers 30, 32 and 50 and a triangular waterfront parking lot to Ellison’s team for at least 66 years each, in exchange for infrastructure improvements.

But the proposal is bitterly opposed by members of San Francisco’s maritime industry.

“This would completely obliterate the opportunities for blue-collar maritime jobs in San Francisco,” said Michael Hamman, an India Basin resident and southern waterfront advisor to the Port, during a Tuesday hearing at the Ferry Building. “It would ruin the San Francisco heritage as a maritime powerhouse on the West Coast and it would have great long-term harm.”

In an effort to bring down public costs and improve spectator viewing experiences, city staff in recent months suggested shifting the event farther north along the waterfront, closer to an established tourism district and the proposed racing area, which would be roughly bordered by Angel Island, the Golden Gate Bridge and Fisherman’s Wharf. That change would minimize disruption at piers 50 and 80.

The alternative proposal, called the Northern Waterfront Alternative and sometimes referred to as Plan B, would see northeastern waterfront piers, where a cruise terminal is planned, used as spectator viewing areas. The race operations planned for Pier 50 would shift northwards to piers 30 and 32, south of the Bay Bridge, locations that had been designated in the initial proposal as spectator viewing areas.

Race officials lauded that alternative, saying it would improve the spectator experience and reduce costs, but also said in a Nov. 8 letter that there was not enough time to fully vet the new locations before the Dec. 31 venue announcement deadline they had imposed.

But with political support for the initial proposal waning, it appears that city officials are determined to ram through a detailed consideration of the alternative proposal before a host city agreement is signed.

Port of San Francisco commissioners on Tuesday expressed serious concerns about the original proposal, saying it would permanently impact the agency’s revenue and financial borrowing capabilities. They also called for caution before any host city agreement is signed.

“This is a great opportunity for the city overall — it’s one of the best economic stimulus packages that we’ve seen in years — but the Port can’t carry the brunt of the debt for this to happen,” Commissioner Kimberly Brandon said. “For the city, it’s a great thing, but I didn’t see any community benefits for the communities that will be impacted.”

Brandon suggested asking race organizers to contribute funds to improve bayfront paths or other projects to offset their impacts on waterfront neighborhoods, many of which are heavily populated by blue-collar and low-income workers.

The three commissioners who attended Tuesday’s hearing voted unanimously to approve host city agreements dealing with both of the imagined scenarios, while expressing strong support for the Northern Waterfront Alternative.

City officials are continuing to negotiate with Ellison’s team in an effort to improve both agreements, Kyri McClellan, an economic development aide to Mayor Newsom, told commissioners.

With the Port's approval secured, the Board of Supervisors plans to hold a Dec. 8 committee hearing related to the proposals, with a full board vote scheduled for a week later.

Correction: An earlier version of this story incorrectly stated that Pier 28 would be transferred to Larry Ellison's team for long-term development under the city's original proposed host city agreement. The plan would give the team long-term development rights to piers 30, 32 and 50.