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San Francisco Unswayed by Rival America's Cup Bid

More than a half-million spectators could gather in San Francisco to watch the America’s Cup, if Ellison's team approves the city's bid
More than a half-million spectators could gather in San Francisco to watch the America’s Cup, if Ellison's team approves the city's bid
City unlikely to sweeten terms of deal, despite pressure from Ellison's team

San Francisco is standing firmly by its bid to host the next America’s Cup despite ongoing negotiations between event organizers and a rival East Coast bidder.

San Francisco’s Board of Supervisors and Mayor Gavin Newsom last week finalized and approved a bid to host 43 days of catamaran racing on the bay near the Golden Gate Bridge until 2013 that could see the public incur costs of up to $12 million.

Larry Ellison’s San Francisco-based BMW Oracle Racing team, which holds the Cup and the rights to select the next race venue, surprisingly rebuffed that offer in the days leading up to last week’s board vote. The team plans to announce a venue by Dec. 31.

An initial bid supported by the team and Newsom, but opposed by other city leaders, would have seen the public contribute up to $128 million in event-related costs, including foregone waterfront development rights.

The team had apparently failed to secure a rival bid prior to last week’s vote, despite earlier unsubstantiated claims by Ellison's team that an unnamed Italian city or port had tendered a generous offer.

As a result, the team has been scrambling during the past two weeks to secure a bid from Rhode Island officials who want the event held near the regatta’s historical home at the mouth of Newport Harbor, which is in Narragansett Bay.

Sailing is far more popular in Rhode Island than it is in Northern California, where the sport is considered obscure and viewed as elitist. Increasing sailing's popularity in the Bay Area was one of the organizers' goals in bringing the event to San Francisco, where yacht marinas are included in plans to redevelop former Navy facilities.

San Francisco officials view the Rhode Island talks as a negotiating tool that’s ultimately designed to convince city officials to boost the public value of San Francisco's bid.

Such a strategy could be doomed to failure. Even if San Francisco’s government were willing to increase public investments to woo event organizers, it’s unclear how a new bid could be approved by lawmakers before the team’s Dec. 31 deadline for a venue announcement. Yachting teams around the world are waiting to find out where the event will be held before deciding whether they will participate in the regatta, which will require millions of dollars in sponsorships.

The San Francisco Board of Supervisors, which must approve any changes to the city's bid, is in recess until early January. Newsom, meanwhile, is scheduled to resign in early January to begin a new role as California’s lieutenant governor. It remains unclear who will succeed him in an interim capacity.

Newsom stood firmly by the city’s bid at an unrelated press conference on Tuesday morning, ruling out substantial changes but telling reporters that “we’re happy to tweak” the details.

“We’re all in a crunch time — we’ve done the best we could,” Newsom said. “If we don’t get it, I don’t have no real regrets — except losing the opportunity to host this cup in a world-class city — because we did everything we possibly could.”

Newsom also rebuked claims by Ellison’s team that it deserves more attractive terms in exchange for taking financial risks in bringing the coveted competition to the Bay Area.

“This is a great bid we have offered. There is a tremendous amount of benefit to them, not just to the city. We really see this as a win-win,” Newsom said.

Supervisor Ross Mirkarimi, a progressive lawmaker who has been closely involved with efforts to secure the America's Cup, was similarly firm in his support of the city's existing bid.

"We put together an outstanding proposal featuring one of the world's best sailing amphitheaters," Mirkarimi, who is traveling, said in a text message. "Under extraordinary circumstances, San Francisco rallied to advance a bid that appears to be being leveraged against Rhode Island. The mayor and Mr. Ellison need to talk over some holiday cheer."

On Monday, Rhode Island economic development officials announced basic details of their bid, which is being hastily negotiated and refined.

Bid details are scant compared with San Francisco’s 79-page offer, which was the result of months of work by city officials and regional representatives.

What is clear is that many of the East Coast discussions have focused on Narragansett Bay infrastructure improvements that would be funded by Rhode Islanders.

“By transforming Narragansett Bay into a highly coveted, world-class sailing competition, education and training venue, we will attract additional private investments and premier yachting and boating events for generations to come,” the Rhode Island Economic Development Corporation wrote in a one-page summary of the proposed bid.

“The America’s Cup will also be the impetus to make much needed, long discussed and long overdue permanent public infrastructure improvements at Fort Adams State Park,” corporation officials wrote. “The public will experience the permanent, leave-behind benefits of new piers, docks, parking facilities, walkways, improved roads and a refurbished historic fort.”

The Newport Chamber of Commerce announced that it appointed consulting firm KLR2 to assess the economic impacts of hosting the event. Design and engineering firms including the Louis Berger Group, Newport Collaborative Architects, St. Jean Engineering LLC and Gates, Leighton and Associates, Inc. are working with Ellison's team on the details of the proposed event.

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