San Francisco (USA,CA) - 33rd America’s Cup - BMW ORACLE Racing and the Mayor Gavin Newsom, plus ACOC’’s George Schultz pose with the America’s Cup - USA Victory Tour - Day 2 -Reception at City Hall
Supervisors of the City and County of San Francisco have passed the recommendation from their Finance Committee for the Hosting of the 34th America's Cup.
The vote was unanimous 11-0
That plan, which was claimed by City officials to have been re-negotiated with BMW Oracle Racing since the weekend is for the so-called Northern Alternative, involving a set of Piers and infrastructure more to the north of the City.
The previous plan, involving a more central location, and the subject of four month negotiation between the America's Cup Defenders, will not be submitted.
At yesterday's Finance Committee hearing, official backed the Northern Alternative, largely on financial grounds in a deal that is effectively cost neutral to the City in return for an estimated $1.2billion dollars of Economic Return and 8,000 new jobs.
City Officials could not determine whether they were going to make or lose money on the deal. On one hand claiming that the deal would cost the City $11million and on the other saying that by accounting for $32million of sponsorship to be raised by the America's Cup Organising Committee and offsetting this against the $11million of cost, the City would show a positive return of $22million from the event, plus the Economic Return and Job Creation. The sponsorship money is apparently needed by the City to pay the extra costs of Police, Firemen and other such City services, normally run by the City.
Proposed Race Area - San Francisco
One of the concessions made in the deal was to remove a clause giving the City the ability to spike the Hosting Agreement if the $32million was not raised by the ACOC, instead softening that stance to a 'best endeavours' basis.
There is no Hosting Fee to be paid by the City to America's Cup Event organisers to offset their costs, instead there is a proposal that $270million will come from private sources. However there is no guarantee of that fee, or sum being raised. That would also be on top of international sponsorship raised by ACEA, the event business arm of the America's Cup Defenders.
The basis of the Northern Alternative is that BMW Oracle Racing would redevelop several crumbling piers, said by City Officials to have only 10 years life left, at a development cost to the team and its backers of of $150million. In return the would get leases in excess of 65 years on the property they had redeveloped, paying rent to the City for the space, but with that being offset by a rent credit.
In return the City gets a facility on two piers that will be a new cruise ship terminal. Incredibly one official commented in the Finance Committee hearing that if BMW Oracle Racing successfully defended the America's Cup in 2013, then they might not be able to use those piers for a second Defence, as the piers would be required for the new terminal.
Additionally the team has to fund the actual Defence of the prestigious America's Cup, plus fund the Event Management of the regatta. Long time America's Cup event sponsor, Louis Vuitton announced in Dubai recently that it would be working alongside event organisers for the 34th America's Cup and ancillary regattas.
San Francisco's America's Cup Centre - 34th America's Cup
The substitution of the Alternative Plan, as the City's best offer on Hosting effectively removes it from the position of having a 'winning bid' in the words of lead negotiator, Stephen Barclay of BMW Oracle Racing, to one where the San Francisco bid would be compared with others from Italy and New York.
Details of the New York bid are not to hand, however the Italian bid, believed to be linked to Rome's Olympic hosting aspirations for 2020, involves a guaranteed event fee of $million and numerous other concessions and fast tracking.
The survival of a confidence vote by the Italian Prime Minister overnight, said to be a key supporter of the Italian bid, will have only strengthened the European hand.
Traditionally the Defence is staged in the waters of the Defending club, in this case Golden Gate Yacht Club, however given the parsimonious Hosting Bid put forward by San Francisco's City Hall, it will now be considered alongside other offers.
Earlier in the week, the chances of San Francisco hosting the America's Cup are rated at less than 50% by Cup insiders. However time may favor the low-bid by the Californian City.
A decision on the Venue for the Defence of the 34th America's Cup is scheduled to be announced by 31 December 2010.
For news video on the Bid Hosting http://abclocal.go.com/kgo/story?section=news/sports&id=7841674!click_here and http://abclocal.go.com/kgo/story?section=news/local/san_francisco&id=7816965!click_here