America's Cup - Emirates Team NZ pushes back on surprise bases deal

by Richard Gladwell, Sail-World.com NZ on 23 Nov 2017 An olive branch offered by Emirates Team New Zealand Board Chairman, Sir Stephen Tindall midway through an afternoon meeting of the Auckland Council triggered the end of the team's preferred option for the hosting of the 36th America's Cup.

After a weekend of lobbying between Labour party politicians past and present, together with similarly leaning activist groups, a deal brokered by Mayor Phil Goff carried the day.

That was the same Mayor who two months previously had pleaded with the Council for an evidence-based decision when the decision was to be made.

Panuku Developments' Rod Marler made an outstanding presentation on behalf of the Council organisations with a very detailed analysis presented in a very clear and unambiguous manner. It set out a compelling business case for the option favoured by Emirates Team New Zealand and which would have generated substantial revenues from superyacht servicing and a possible J-Class regatta. Throughout this whole exercise it has been the Council officials who have shone rather than the politicians.

Instead of making an evidence-based decision, politics and a solution acceptable to the lobby groups carried the day.

One example of emotion over-riding the evidence was the revenue that would have come directly to the Council coffers from superyacht berthage fees from the so-called Wynyard Basin, compared to the Halsey Street Extension.

In the lead up to 2020, the Basin option generated $6.7million compared to $12million from the Halsey Street Extension. During the period of the Cup to June 2021, berthage from the Basin option was estimated to generate $11.0million while Halsey Street Extension produced $18.7million. Post the 2021 America's Cup the ongoing revenue from the Basin option was estimated to be $6.4million compared to $11.4 from the Halsey Street Extension. A simple calculation to the end of 2022 shows the Basin option earning $24.1million compared to $41.1million for the Halsey Street Extension.

So much for deciding on the basis of hard evidence. There were many similar examples during the three hour session.

One of the inequities of an America's Cup hosting equation is that the Auckland Council provides the infrastructure and in theory foots the bill, while the New Zealand government reaps the benefits in tax paid by teams and visitors. As well there is the additional tax revenue from business generated by the Cup. However, the estimates above are revenue coming directly into the Councils coffers - clearly deemed to be not enough to be worthwhile.

Emirates Team New Zealand was quick to react to the decisions taken, issuing a media statement a couple of hours after the meeting end:

'Emirates Team New Zealand said today that now the full Halsey Street extension has been taken off the table it seriously restricts the ability for the marine industry to benefit from the berthing of the super yachts and the ability to extract maximum economic benefit.

The final plan for the Wynyard Basin option will need to reincorporate the lost super yacht berthage within the event perimeter.

We will continue to work constructively with council and government to progress the plans.'

In reality, the moves won't directly affect Emirates Team New Zealand or the Defence efforts. The New Zealand team will have the pick of the base locations and is expected to be based on the two-boat base on Hobson Wharf (S8 in the accompanying images).

The rest will be allocated to Challengers in order of entry. There is now a substantial incentive to enter early and secure one of the better base sites (S5,6 and 7). In the extended Halsey Street plan, all sites were equal as they all launched into a central basin which was sheltered water. In the Wynyard Basin plan only four of the bases launch into the basin.

The Viaduct Basin plan provides five two-boat bases and three single boat bases. There are three bases located on the eastern side of Wynyard Point. It would seem that there are water depth issues associated with all base options and dredging would be necessary to increase the water depth to be able to accommodate the 5.5metre draft of the AC75 class yachts to be used in the America's Cup Regatta. J class have draft of 4.5metres.

There are also concerns about water movement around the Wynyard Point bases, given that the bases off the end of Halsey Street are all built on a wharf that will be extended over 70 metres out into the harbour (compared to the 220 metres of the Halsey Street extension), and there is no reclamation planned that would provide a solid barrier. Time will tell if those concerns materialise.

Brigham Street which runs along the eastern side of Wynyard Point will have to be closed for half of its length and bases will be built hard against the silo tanks in the area.

Much was made of the cost of the Halsey Street Extension, however, Summary Costs estimated for that option totalled $169.4million compared to $132.1million for the Viaduct Basin. The Halsey Street Extension is far less complex from a ownership perspective, as all land is already owned by the Council, without requiring any early termination of existing leases, aside from fishing boats and Sealink ferries (both of which are relocated in the same area).

While the Emirates Team New Zealand decision came as a surprise, even more astonishing was the vote by the Councillors to leave on the resolution their option to have bases distributed around both sides of Wynyard Point and in Halsey Street - even though they had been told the water depth was only 2.5 metres in front of some sites. A continuing theme throughout the afternoon was an obsession with stopping further incursion of the harbour, but not mentioning the damage caused by dredging and the depositing of spoil.

The New Zealand Marine Industry looks to be the biggest loser from the compromise deal, with the superyacht berths dropping from 24 large berths and eight smaller berths to just eight large berths and eight smaller berths in the Viaduct Basin plan. At an average spend of $3million per superyacht servicing that is a big capacity reduction - not just for the America's Cup Regatta, but on an ongoing basis.

The economic impact, touted at up to a billion dollars should now be scaled back to the lower end of the estimate, along with the estimate of 8,000 jobs being created.

Also looking likely to fall by the wayside is a probable J Class regatta with seven or eight of the 120ft yachts used for the 1930-1937 era of the America's Cup due to visit Auckland. The event was mentioned at the Council Meeting by Emirates Team New Zealand, as one which would provide a second income stream as well as adding a significant and prestigious event to the America's Cup Regatta.

In Bermuda, seven J class competed in a Superyacht Series and then six in their own J Class Regatta, bringing 30 crew per boat plus numerous friends and supporters. That event would now appear to be very difficult to host, due to the reduction in berths from 24 to just eight in the Viaduct Basin plan, and the need to have safe and secluded berthage which won't damage the classic yachts.

Also yet to be seen is how/whether the superyachts and AC75's can co-exist opposite each other with the superyachts moored Mediterranean style to the western side of Halsey Street Wharf, and the AC75's coming out of the eastern side of Wynyard Point - and sharing 170metres of water for turning at slow speed, and often tricky cross-winds.

Superyachts such as 88 metre The Maltese Falcon, was one of 134 which visited and raced in Bermuda during the 35th America's Cup. She had 300 metres of manoeuvring room in Bermuda's Royal Dockyard - and without dock fingers opposite.

Seven of the 19 Councillors present voted for the Halsey Street Extension to stay on the negotiating table. However that was not enough to save Emirates Team New Zealand's preferred option, and it was quickly voted off the list.

Security not an issue?
Barely discussed was the question of security, which works heavily in favour of the Halsey Street Extension proposal, as essentially it is securing an island, and the whole base area and superyacht area can be easily blocked off from the sea.

At the 2010 America's Cup in Valencia there was a 1km radius lockdown 24x7 around the Darsena and America's Cup bases, patrolled by armed military. In San Francisco, there was full bag search, to get into the America's Cup Village, plus it was ticket only. In Bermuda, it was full Olympic standard for everyone - a pass scanned into the database, full bag search and full body scan. There were underwater searches grid-style done outside the seawall at Cross Island in Bermuda, which housed the America's Cup Village. Checks also included media being chaperoned by military security to media boats and then being fully searched and scanned on their return.

In Auckland with the 'dispersed base' concept it seems that it will be just a free for all, with people able to wander as they please - which is not the reality of an international event of this type. One of several moments of incredulity in the Hearing came when the Mayor casually asked Team New Zealand what would be required for security at the America's Cup in Auckland. Rod Marler made a passing reference to the issues in the two 'dispersed' base concepts saying they would be more difficult, but didn't elaborate.

The usual approach is to get a full assessment of the risks from international security experts and then incorporate that into early stages of planning for the event so that proper security can be implemented without being obtrusive.

At this stage, the reaction of the Challenger of Record to the changes is not known. The decisions made Thursday would also have implications for Challenger Selection Series sponsor, Italian luxury fashion house, Prada.

Already three Challengers have announced their intention to enter - Luna Rossa, Land Rover BAR (GBR) and New York Yacht Club (USA). Emirates Team New Zealand indicated they were talking with Artemis Racing (SWE), another two challengers from USA and another two from Italy.

Entries for the 36th America's Cup open on January 1, 2018, and close six months later, with late entries being accepted for a further six months.

For former Team New Zealand founder Alan Sefton's comments on the Council decision click here