Andy Newman/Florida Keys News Bureau

Sailboats pass the start line to begin the fourth day of racing at the Key West 2010 sailing regatta Jan. 21, 2010 in Key West, Fla.

Hosting the America’s Cup sailing regatta on the bay is expected to cost San Francisco $128.3 million, the city’s budget analysts found.

If the San Francisco-based BMW Oracle Racing Team chooses San Francisco as the host city for the 34th America’s Cup, the event will take place over roughly 38 days of sailing from 2011 or 2012 to 2013.

In a first for the event, pre-regatta races could be hosted in a range of venues under a Formula One-style format before a final America’s Cup match is raced in the host country, team CEO Russell Coutts announced in September.

Hosting the America’s Cup could be a boon for Bay Area businesses, with hundreds of thousands of people expected to flock to the city’s shorelines to watch crews of 11 sailors compete in an area roughly bordered by Fisherman’s Wharf, Angel Island and the Golden Gate Bridge.

But a proposed agreement between San Francisco and Larry Ellison’s BMW Oracle Racing Team would be a major financial drain on San Francisco, according to a report published Thursday by the city’s budget analyst office.

The need for such a generous offer has been questioned by critics, including Supervisor Chris Daly, given that city officials have been unable to confirm that any other cities or ports bidding to host the Cup.

“We simply have not been able to verify that there are other bidders out there,” San Francisco Budget Analyst Harvey Rose said Thursday.

Italy appears to have offered tax breaks and help with visas, along with other assistance, as incentives to select that country as host, but the San Francisco budget analyst's office says it has not been able to find evidence that Italy is offering any money or land.

The mayor of Valencia, Spain recently said the city is not being considered to host the event, despite an offer to provide free use of docking facilities, according to news reports.

San Francisco, if selected, would spend $64.1 million on traffic management, environmental reviews, security and other event-related costs, according to the budget analyst's report, which was provided in response to a request from Daly.

The city is expected to recoup $22 million of those costs in taxes generated by increased visitor spending.

Overall, that means that San Francisco, which has a current budget of $6.6 billion and is facing a $712 million projected budget shortfall next year, would spend $42.1 million hosting the Cup while city departments are being asked to slash costs, according to Rose.

Additionally, the city would provide the team with $89.8 million worth of property and waterfront development rights, which would be partly recouped with $3.6 million in additional property taxes.

The team, owned by Ellison, who is a multibillionaire, would be granted 66-year leases at piers 30, 32 and 50 and granted ownership of a triangle of land bordered by Beale and Bryant streets and the Embarcadero in exchange for performing $150 million in infrastructure improvements.

The Port of San Francisco, which is a city department that manages state land, would also be required to evict or relocate 87 tenants from the piers and from other waterfront facilities needed to host the event.

Added up, the figures indicate that the net cost to San Francisco of hosting the event would be $128.3 million.

The benefits to businesses of increased visitor spending, on the other hand, could be worth between $928 million and $1.6 billion, the report found.

Jennifer Matz, head of Mayor Gavin Newsom's economic development office, said the city anticipated substantial costs in a bid to secure the event, in order to bring massive private sector and other benefits.

"We strongly feel that the costs that are associated with this event are investments — they are not giveaways," Matz said.

Matz said some of the projected costs in the report could come down and that event organizers would help raise $32 million to help the city host the event. She also said the report overvalues some pier development rights, given that they need major renovations.

The Board of Supervisors, which must approve the proposed host city agreement before planning can move forward, will consider the plan in the coming weeks.

A nonbinding vote of a previous draft host city agreement was supported by a 9-2 vote of San Francisco's supervisors, with Supervisors Daly and John Avalos dissenting.

On Thursday, Daly told reporters that he would continue to oppose the agreement, which he says misuses government funds in an effort to help members of the private sector make money.

"We want to see how we can keep this city in the business of providing life-saving health services to people who otherwise wouldn’t be able to access those; we want to figure out how to preserve basic bus services," Daly said.

The budget analyst’s office expects to publish a feasibility analysis related to the proposed agreement before Dec. 1, when the board’s finance committee expects to hold a hearing. The feasibility analysis will include recommendations, Rose said.