Creative Commons/stevendamron

SF City Hall is far from Fresno or San Diego

San Francisco’s Board of Supervisors is set to vote Tuesday on a bid to host the America’s Cup, which could cost the public up to $12 million if it’s accepted by officials of the sailing competition.

Following months of negotiations with race organizers and fiery debate among city officials regarding the proposed pitch to host the event, the city is on the verge of settling on a bid that would cost the public far less money to execute than was initially proposed.

The terms of the bid were approved with a 2-0 vote Monday by the board’s budget and finance committee. Supervisor Sean Elsbernd was absent.

“This has been quite a San Francisco way of putting together an agreement,” committee member John Avalos said during the hearing.

The terms of the bid are broadly supported by city leaders, including Mayor Gavin Newsom and Supervisor Chris Daly. Daly previously vowed to use lawsuits to kill an initial version of the bid. But he told The Bay Citizen that he supports the new version, which is called the Northern Waterfront Alternative.

Despite the broad support for the bid among city officials, Supervisor Ross Mirkarimi, who has been closely involved in the bidding process and is a member of the board's budget and finance committee, said that he does not expect a unanimous vote of approval Tuesday when it is considered by the full board.

The terms of the bid were unexpectedly rebuffed over the weekend by Larry Ellison’s BMW Oracle Racing team, which holds the Cup and plans to announce the race venue within 18 days.

Avalos described San Francisco’s bidding process as transparent and public. He compared that process with negotiations that Ellison’s team recently said it has resumed with Rhode Island and Italy.

Industrial and maritime tenants of Pier 50 in the Mission Bay neighborhood would not be displaced by the regatta under the Northern Waterfront Alternative. An initial proposal would have controversially evicted those tenants and provided the massive pier to Ellison’s team for use during the race and for subsequent long-term redevelopment activities.

The absence of Pier 50 from the bid prompted Ellison’s team on the weekend to criticize the deal and state that San Francisco would not be awarded the event.

City leaders consider the statement to be a negotiating tactic, which they say they are taking very seriously. Nonetheless, they are forging ahead with approval of the cheaper bid.

“I think that San Francisco stands to be the best contender for hosting the America’s Cup,” Mirkarimi said toward the end of Monday’s hearing.

The Board of Supervisors’ budget analyst's office projects that the race would cost the public $11.9 million to host under the Northern Waterfront Alternative – far lower than its $128 million projection for the initial bid proposal.

The city controller’s office released a report Monday projecting that San Francisco would make a $23.8 million profit on the event.

Both projections would see the Port of San Francisco, a city-run agency that oversees state land, incur a large portion of the costs. The city is expected to recoup those costs through increased taxes from spending by visitors and spectators and through fundraising by event organizers.

San Francisco is in negotiations with other Bay Area waterfront cities in a bid to secure their support to help reduce event costs, according to Jennifer Matz, Newsom’s chief economic development aide.

“We believe that entities around the region are going to be directly supporting through in-kind security and transportation for this event,” Matz said during the hearing.

The $11.9 million in projected public expenses would decrease if race organizers live up to a commitment to help raise as much as $32 million in donations and other private sector contributions.

Matz said the yachting community, including “mothers and fathers” of young yachters, will help raise the money.

The $32 million in pledged fundraising has been a point of major contention in recent weeks.

Some city leaders have pushed to include language in the bid that would commit race organizers to provide the funds, or to provide enough funds to cover the city’s net expenses. But no such language was included in the terms that were approved Monday by the committee.

Under the terms of the bid, at least 43 days of catamaran racing would likely be held in 2012 and 2013 between Golden Gate Bridge, Angel Island and Fisherman’s Wharf.

Main spectator viewing facilities would be placed along the northern waterfront and on federal parkland, such as Crissy Field.

Some Port of San Francisco tenants that lease waterfront space along the Northern Waterfront would be evicted or relocated to make way for some of the viewing facilities.

Port officials say they will attempt to find alternative space for such tenants in their facilities, or in privately owned buildings..

Under the terms of the city’s bid, piers 30 and 32, which in the South Beach neighborhood are currently used for light vehicle parking south of the Bay Bridge, would be rehabilitated, reinforced and used for race operations.

Following the event, Ellison’s team would redevelop the piers under a lease that could last until after 2075.

Ellison’s team would also secure ownership of an adjacent triangle of land or lease the lot, which is zoned for a 10-story residential building, until after 2085.

In exchange for investing $55 million to improve the piers, the team would receive equivalent rent credits to offset its lease expenses.

The team would also have the option of improving and using piers 26 and 28, which are between piers 30 and 32 and the Bay Bridge, under the terms of the bid. The piers are estimated to require $25 million in infrastructure improvements, and Ellison’s team would receive rent credits on the piers if it invests those funds.