America's Cup- Venue discussions progress well in Newport, RI

by Richard Gladwell on 17 Dec 2010
Friday 17th December is the deadline set by BMW Oracle Racing's lead negotiator Stephen Barclay to the City of San Francisco to have a signed agreement in front of the team, before they make their decision on the Venue for the 34th America's Cup.

'If we do not have San Francisco’s signed bid by not later than close of business on December 17, then the City will be deemed to have withdrawn itself from contention' Barclay wrote to the Mayor and Board of Supervisors on 10 December. That condition would seem to have been met, with the public signing of an Agreement by Mayor Gavin Newsom on 14 December 2010, after a revised deal was put to the Board of Supervisors earlier that day and passed unanimously.

However reading Barclay's letter it would seem that the revised bid from the home city of the Defender, Golden Gate Yacht Club and their team BMW Oracle Racing, is still south of other deals that are on the table or under negotiation at another US venue. San Francisco officials have been careful to negotiate a deal that is essentially cost neutral to the financially strapped City.

Barclay notes: 'In San Francisco’s bid, the Event Authority does not benefit from any government guarantee of funding as was the case in Valencia and is the case with another bidder for AC34.'

That bid is believed to be from an Italian venue, which has not been publicly identified except in Italian newspapers.

He concludes: 'To enable this we must ensure the risks and financial arrangements balance and do not put the Event Authority at risk. The negotiated Host City Agreement balanced this equation; the proposed alternative does not. We have offered a mechanism to assist the City/Port resolve its cost issue. Previously this offer has been rejected, yet such is our belief that a deal can to be done which benefits the City, the Event and its stakeholders, we have put forward a final proposal.'

Again it is not known if the final bid from City Hall does balance the equation for the America's Cup Event Authority, which believes it has a $300million cost to stage the America's Cup in San Francisco, plus fund the Racing Team to compete in the Defence.

Little is known of the Italian bid, however Sail-World understands that negotiations with another US venue, Newport RI have intensified this week.

Stephen Barclay was in San Francisco for the first days of this week, before travelling to Newport as has AC Event Authority CEO Craig Thompson. America's Cup Regatta Director Iain Murray is expected to arrive from Europe on Thursday local time.

Head of External Affairs for BMW Oracle Racing Team, Tom Ehman has been in Newport since last Monday restarting the venue negotiations put on ice when BMW Oracle believed it had a winning bid from San Francisco, which was subsequently replaced with the 'Northern Alternative' judged by the City to fit more comfortably with its financial situation, and in fact proved to be revenue positive for the City.

For its part the Newport RI negotiations are said to have intensified since Ehman arrived Monday, and are headed up for locals by Keith Stokes, head of the RI Economic Development Corporation, David Elwell, Commodore of the New York Yacht Club, and Brad Read, Executive Director of Sail Newport.

Ehman is a member of the New York Yacht Club, long standing Defenders of the America's Cup. Team owner Larry Ellison recently purchased the Astor mansion in Newport RI.

The Newport group is believed to have been putting in long hours group and will be touring Fort Adams State Park and other possible shoreside venues as well as meeting with Rhode Island Governor-elect Lincoln Chaffee and other Rhode Island officials.

Fort Adams is a tract of land owned by the State and would be developed as a world class sailing facility by the State, in contrast to the San Francisco deal which requires $150million of expenditure by the newly required property development arm of BMW Oracle Racing in exchange for long term leases, and a system of rent charging by the City offset by rent credits.

The Newport bid is believed to contain Rhode Island State backing, while the San Francisco deal was silent on a contribution from the State of California, the eighth largest economy in the World. However the State would benefit substantially from an America's Cup held within its environs.

An announcement on the Venue for the 34th America's Cup is required before 31 December 2010, that date could depend on the outcome of negotiations in Newport RI, which were believed to be progressing very well.