America's Cup: High Noon for San Francisco over Venue wobbles

34rd America’s Cup - BMW ORACLE Racing - 1st Press Conference - Russell Coutts (BOR) - Vincenzo Onorato (MLA)

Paul Oliva writes for the San Francisco Chronicle. Following is an unpublished report written for SFGate.com on the America's Cup venue stand-off which has appeared on the US sailing website www.pressure-drop.us Oliva spent Wednesday through Friday in Miami grilling sources involved in America's Cup hosting negotiations. Miami is also hosting the RC44 Worlds, and several key AC players were present. He writes:

Wednesday through Friday from Miami I grilled sources involved in America's Cup hosting negotiations, here's what I learned in Miami.

In any race, there is rarely too fast, only too slow. Too slow, wrong tactics, you lose.

Today's letter from Golden Gate Yacht Club to Mayor Newsom and Supervisors reads like a match-race dialup. Two adversaries circling, pressing for advantage. The dialup got tense this week, even as America's Cup holder Larry Ellison relished some tough, fast racing here at the Oracle RC44 Miami Cup. Worth noting: his Russell Coutts-designed 44-foot monohull racer is called Deal Breaker.

The America's Cup Event Authority and GGYC must announce a venue by Dec. 31. Now we know they have given San Francisco until Dec. 17 to finalize an acceptable agreement. These players do not use the terms 'bad faith' or 'bait and switch' in describing the city's switch from the original satisfactory agreement to the Northern Waterfront Alternative. But the one can almost see the thought bubbles from the tone of the grousing.

What happened? Outwardly, it seemed that beneath the posturing and dramatic questions from Supervisors during their nearly five-hour hearing Wed., signs were hopeful that the city was on the cusp of approving plans to host the race in 2013. The Northern Waterfront Alternative -- switching part of the Cup Village from piers 40-54 to piers north of the Bay Bridge -- had gathered amazing political momentum in a short time, and the Supervisors discarded the original plan that had been agreed to by GGYC. Northern Waterfront was sold as a win-win and would have mean rehabilitating acres of crumbling waterfront that San Francisco Port director Monique Moyer testified no other developer wants to touch on terms the city has been able to offer.

The changes, while good for the city, appear to be a deal breaker given the risk San Francisco already represents in terms of environmental permitting, political change, fundraising uncertainty, and supervisorial foot-dragging.

The issue is not which piers (it is known that the Event Authority likes the piers involved in the Northern Waterfront Alternative). Rather, the issue is whether the finances cover not only the infrastructure improvements but also help to fund other costs of hosting the race. The Northern Waterfront Alternative doesn't do both.

Many observers assume that Larry Ellison is the sole person to seal a deal. It's more complicated than that.

The Cup is held in trust. Decisions must benefit all potential teams (as of Thursday, there are five, with entry period open through Mar. 31).

Blessings for the venue and any changes to the announced process must come from both the America's Cup Event Authority -- a new independent body similar to the International Olympic Committee -- and the Golden Gate Yacht Club / BMW Oracle Racing (as the last winner they act as the holder and trustee of the Cup). It helps if the official challenger Club Nautico di Roma / Mascalzone Latino likes the deal, too.

City project manager Kyri McClellan testified Wed. that Event Authority representatives were very receptive to the northern waterfront option during a recent visit. Officially, a spokesperson for the body was unable to comment. BMW Oracle Racing was officially mum, too. It was not a good sign. And then the letter to Mayor Newsom hit this morning.

In addition to the issue of whether the city is offering reasonable financial terms to the Event Authority, the supervisors wondered whether there was viable competition to San Francisco's bid, and whether the deadline could be pushed back. There was also a question of whether Supervisor David Campos is correct to be concerned about exposure to foreign litigation.

The letter responds to all points. the short answer is: the Northern Waterfront deal isn't good enough, the competition is real, the deadline most certainly can't be pushed back, and the arbitration concerns reflect lack of knowledge of international arbitration.

Of these, the competition is the most interesting. Indications are that the competitive threat is real and San Francisco's bid is in jeopardy.

The letter makes clear that Italy is an active option. Not only that, but all Supervisors were given the chance to see written evidence of the Italian bid; some took advantage of that, others didn't, including Supervisor Campos.

For the full story http://www.pressure-drop.us/forums/content.php?900-SF-AC34-tactics-potential-dealbreaker!click_here

Sail-World believes that there are now several discussions underway with venues around the world to host the 34th America's Cup, including others in USA. These discussion have accelerated over the past month, as the San Francisco political process loses traction. Key meetings will be held on Monday and Tuesday, this week and if those do not lead to the direct signing of a Hosting Agreement then expect some dramatic decisions to be made.
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