Some of the wind was taken out of the sails of an effort to hastily approve an America’s Cup host city agreement when San Francisco lawmakers delayed a scheduled budget hearing by one week to allow themselves to consider an alternative that could be $27.2 million cheaper.
Mayor Gavin Newsom’s economic development office had helped negotiate an agreement with Larry Ellison’s BMW Oracle Racing team that would see the 34th America’s Cup sailing regatta held on San Francisco Bay.
The San Francisco-based team, which won the most recent Cup, plans to announce the host city for the next event by Dec. 31. San Francisco is the only city or port in the world that has announced a bid to host the event and its leaders are scrambling to finalize the city's proposal by the deadline.
The Board of Supervisors’ Budget and Finance Committee had been scheduled to hold a hearing Dec. 1 about the proposed agreement, which budget analysts found could cost the city, including its port, more than $128 million in event-related expenses, land, financing costs and lost development opportunities.
But the committee hearing was delayed this week until Dec. 8, according to Supervisor Ross Mirkarimi, who said more time was needed to consider an alternative proposal published by the Port of San Francisco on Tuesday evening that would likely save the city millions.
The original proposed host city agreement would cost the Port of San Francisco $43 million in land and development rights offered to Ellison's team, the report showed.
The Port is a city-run department that manages state-owned waterfront land.
Under the agreement, spectator and race staging facilities would occupy the city's eastern waterfront, including piers 48 and 50 in the Mission Bay neighborhood. The price tag does not include dredging-related expenses or costs that would be incurred by other city departments.
The team would invest $150 million in pier repairs and other needed infrastructure expenses in exchange for development rights on three piers.
The alternative plan, which as first reported by The Bay Citizen would shift some of those facilities north to the city's main tourism district, would cost the Port only $15.8 million. Ellison's team would spend $55 million improving waterfront infrastructure and secure development rights for two piers.
The alternative would not use piers 48 or 50 for the event. Pier 50 is currently occupied by 26 industrial tenants that would need to be evicted, under the original proposal.
Both proposals are scheduled to be considered Nov. 30 by the Port Commission.
Mirkarimi said he asked for the budget hearing to be delayed by one week to allow supervisors time to consider the alternative and because the city controller's office is scheduled to release an economic feasibility analysis related to the proposed agreement on Dec. 1.
Newsom's chief economic development official, Jennifer Matz, said that despite the schedule change she is still confident the agreement can be approved by the board and signed by the mayor before the end of the year.
“I think it still has us out for a vote on the 14th [of December] at the full board,” Matz said. “Should any changes be made to the [agreement], those can be made in committee and voted on.”
The 43 or more days of catamaran racing planned by organizers, culminating with final match races in the summer of 2013, could prove to be a billion-dollar boon to the region’s economy, according to the report published by the city’s economic analysts.
But it would come at a substantial price to the city, which is facing a projected budget deficit of $712 million next fiscal year.