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Gladwell's Line- America's Cup Venue is San Francisco's to lose

by Richard Gladwell on 9 Sep 2010
The three key players in the San Francisco venue decision, Mayor Gavin Newsom (left), BMW Oracle’s Larry Ellison (centre) and Tom Ehman, who has been clocking up the air miles in the venue negotiations BMW Oracle Racing © Photo Gilles Martin-Raget http://www.bmworacleracing.com
The Venue is the third element in the formula for the 34th America’s Cup.

The first two - the Protocol which governs the conditions under which the Match and its preliminaries will be conducted; and the Boat to be used for the Match will be announced in Valencia in Monday at 1300CET.

As for the Venue, there are three options, but maybe more.

First and probably the frontrunner, is San Francisco, home port of the Defender, Golden Gate Yacht Club. Others in the mix are Valencia, host to the 32nd and 33rd America’s Cups, and an Italian venue understood to be Fiumicino.

The latter is just 25kms from Rome, the Italian nominated venue for the 2020 Olympics, and for which a decision will be made by the International Olympic Committee in 2013. Which fortuitously is the same year, or maybe a year earlier than the date for the 34th America’s Cup.



Valencia, is one of two maybe three, venues in the world with facilities that would require little by way of work to accommodate an America’s Cup at short notice. The other two being the 2000 and 2003 venue in Auckland, and the 1987 venue in Fremantle, Australia. Neither are believed to be in contention.

Valencia is the obvious choice for the venue, given that many of the key teams have bases in the Spanish city, which is also on the Formula 1 circuit. The dock area was transformed after Valencia won the bidding war for the 32nd America’s Cup ahead of Cascais, Portugal – another option should the America’s Cup be sailed once again in Europe.


But sadly, Valencia did not win the 33rd America's cup, and most would like to see the Cup contested again in the waters of the Defending club.

Another option is Cascais, Portugal - said to be favoured by now BMW Oracle Racing CEO, Russell Coutts, when his previous team, Alinghi were bidding the 32nd America's Cup venue. While Coutts favoured Cascais, he is believed to have been over-ruled by syndicate head, Ernesto Bertarelli on the back of a very persuasive proposal from Valencia. Couuts also won his ISAF Youth single handed title in Cascais, and the venue has wind by the bagfull.

At this stage, the America’s Cup venue is San Francisco’s to lose – and the City has made several attempts to drop the ball.

First of these are sidestepping environmental and planning processes to fast-track the development of new facilities. America’s Cup organisers have made it clear that they want certainty around the standard process – and need that surety by 30 September 2010.

That is a big step away from City Fathers making encouraging noises, and then leaving the normal planning processes to take their course.

However the all-time clanger came in a report from the San Francisco Chronicle, last Saturday:

If city officials are successful in their plan to host the next America's Cup, the drab Piers 30-32 would be transformed into a striking bayfront amphitheater and sailing showplace - a focal point of a revived waterfront stretching from the Bay Bridge to south of AT&T Park - all without tapping taxpayer funds.

Under a proposal that Mayor Gavin Newsom's administration recently presented to race organizers, the city would provide free land and future development rights on the property in exchange for the America's Cup event authority paying $100 million to $150 million to shore up the piers, dredge the area around them, and install new breakwaters and utility lines.

The Port of San Francisco would retain ownership of the property. Future development would be under a long-term lease and still require governmental approvals. Structures to house team headquarters, a public amphitheater and new mega-yacht slips would be temporary and paid for by race organizers.

To read the full story http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/09/04/MNLF1F8C3B.DTL!click_here

That Utopian view was floated in Auckland back in 1995-96 and was soon scuppered, with one of the key players likening it to Auckland hosting a Formula 1 race and then expecting the race teams to pay for building the track and facilities.


The reality of the deal for San Francisco is that the City will need to come up with a viable plan for the 2014 America’s Cup hosting; planning certainty that it can be achieved in time; paying for the flat-deck facilities, plus media centre and any other permanent use facilities; plus making a substantial monetary contribution towards the running of the regatta – probably in the vicinity of upwards of USD50million – depending on the duration they wish to host the event and its build up.

That fee is bargain basement stuff compared to the 150million Euros reportedly put up by Valencia to host the 32nd and 33rd (multi challenger) America's Cup, and the 500million Euros that the Italians have reportedly out on the table.

In return, the payback is substantial – hosting what the City says in its own study is the third biggest sporting event in the world in terms of economic benefit – valued at USD1.4billion, and being the epicentre of the sailing world for two years at least, and world sporting attention for the two and half months of the preliminaries as well as the America’s Cup Match itself.

In New Zealand, by way of comparison, has spent USD230 million upgrading just one of 11 stadiums that will be used for next year's Rugby World Cup. Under the San Franciscan model this would be a cost to the competing teams!

In short San Francisco is being required to make an investment in itself - something the City does not seem to be prepared to do – assuming the SF Chronicle has not been misquoted.

Sadly the statement would appear not to be a misquote, given the contents of a letter written to the San Francisco Chronicle by one Sean Randolph, Bay Area Council Economic Institute, San Francisco who opined:

San Francisco's offer to the America's Cup organizers of lease and development rights on piers used for the race is a winner for the city and the waterfront. In return for these rights, private funds would be used to rebuild the infrastructure.


The Port of San Francisco needs $2 billion to renovate its aging piers, money it doesn't have. Some piers already are red-tagged, and others will be as their infrastructure deteriorates. For the port, this means triage - deciding which it can afford to save and abandoning the rest.

The America's Cup won't solve this completely, but will make a big dent. The arrangement would save the city a $100 million-plus construction bill and Piers 30/32 and 50. It also lets the port redeploy its limited funds to preserve other piers.

The city followed a similar model to develop AT&T Park. Developing these piers with private funds not only will help bring the race and $1.4 billion in economic activity to San Francisco, but it also will help preserve the city's maritime heritage and support the redevelopment of the waterfront as a vital part of its commercial and recreational future.


The point that the Mayor and Economist seem to miss is that San Francisco may not hold the America's Cup more than one cycle - meaning that the offer for future return on their investment is somewhat limited. And if the business case doesn't stack up for the City on property it owns - then why would America's Cup organisers want to invest? And, on a short term investment, at that.


Traditionally the America’s Cup is sailed on the home waters of the Defender, and that was done right up until the Swiss Societe Nautique de Geneve won the event in 2003, and started the process of 'bidding the venue' to get a saltwater location for the 2007 America’s Cup. The protagonists were ordered back to Valencia by the New York Supreme Court, after they could not find a mutually acceptable alternative.

Most America’s Cup teams seem to support the return to the Cup being sailed in the country of the Defender. Golden Gate closed down the other two options when it announced in early July that Newport and San Diego were no longer in consideration in favour of making a national effort as San Francisco was tested against the European options and money.

Fast tracking America’s Cup venue construction is not new, and has been used in Fremantle, Auckland and Valencia to develop some superb facilities that have transformed rundown areas of the port, to provide a magnificent long term legacy beyond the lifetime of the America’s cup regatta.

In Auckland’s case a lighter basin that had the bottom exposed at low tide, half full of derelict and sunken boats, along with surrounding sheds that were just a city eyesore, and had little substantive use. The advent of the America’s Cup proved to be a development trigger that cleared large tracts of waterfront land, producing a deep marina area surrounding cafes, premium office hotel and apartment space, while retaining all of the traditional uses for fishing and opening the area up for charter boat use, creating a superyacht marina and service facility plus a public walkway right around the whole area.

The same model was used for fast-tracking new facilities for the Rugby World Cup – however it is easily contained to accommodate special one-off events of a very significant nature, and is not the planning equivalent of a Trojan Horse.

As an America’s Cup venue, San Francisco has a lot to commend. Reliable breeze is the first essential, and there are no questions in this regard – attested by the many recent major sailing regattas which have not lost a day between them.


The proposed location of the shore facilities are just 3nm from the race area – which offers the great option of having islands and land on three sides – making for great backdrops to the racing as well as providing a real sailing stadium, plus allowing very easy off the water communications.

Yes there are strong tides, which won’t satisfy the purists – however other yachts can race quite successfully in these waters – so why not America’s Cuppers?

While many believe that the winds should true, and the waters virginal - the reality is that condition only provides a test of the respective teams design and tank testing programs - as the fans spend a riveting couple of months watching a regatta to find out who is a couple of tenths of a knot faster.

What needs to be tested is the design, sails and equipment, boat handling, positioning use of tides and windshifts to find the best team. in this respect San Franciscan environment fits the bill admirably.


But in the criteria being used to evaluate the options, the quality of sailing water does not loom large. It can be assumed that all venues will be rated on their ability to provide wind to order, before they are moved into the frame for final selection. The key factors are:

- Facilities – state of existing facilities and scope for building those required

- Environmental – able to fast track through planning requirements to meet deadlines

- Venue Fee – needed to cover regatta staging costs – and recognising the TV rights will be zero to low

- Administrative – putting in place a 'one stop shop' for teams to handle tax, immigration, family relocation etc without having the deal with a myriad of agencies.

You don't need a PhD in America's Cup planning to calculate that San Francisco is coming a very safe third, at present, when measured against all four criteria.

The principal venue in San Francisco is the large Y-shaped Pier/Wharf 50, which has a surface area bigger than the land surrounding Auckland's Viaduct harbour - which took a dozen teams, each with a shed and mostly with a couple of boats and travelifts each. But the boats only required a footprint (or rather airspace) a third of the size of the multihull option under consideration.

Using satellite shots of the various bases, we can calculate that Pier 50 will take about 10 bases the size of BMW Oracle Racing's palace and hardstand in Valencia.

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Other shuffling of wharves and facilities will take place, however the graphic published in the San Francisco Chronicle is accurate except that while the plan is to house the teams on Pier 50, the plan is for the boats to leave for racing each day from alongside the Public Hub and Media Centre on Piers 30-32 and 28. Presumably they will return to that area each day for media conferences and the like before returning to Pier 50 for the night.

If San Francisco were to be the venue, America's Cup organisers have the opportunity to bring sailing up to the same standard as other major stadium sports by providing a substantial media boat capable of handling the live broadcast so commentators can actually report what they are seeing on the field of play, as well as their broadcast monitors.

The fact that the race area is near land-locked allows for a the creation of a square 'field of play' opening up some new course options, but equally the audio signals off the boats can easily be taken back to the media boat, as well as picked up to a land base close by.

Back on 19 August, the http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/08/19/MNJD1EUS0G.DTL!San_Francisco_Chronicle_reported_that: The city has six weeks to present a formal proposal to host the storied series of yacht races, which carries with it the promise of $1.4 billion in economic stimulus for the Bay Area, and almost 9,000 jobs.

'The big issue is certainty,' Mayor Newsom said in an interview.


That timing was corroborated with information from other sources, and quite simply San Francisco has until the 30 September to put a proposal on the table that will put certainty into San Francisco's ability to provide the facilities to host the 34th America's Cup. Miss that, and it is likely the decision will then be played out between Fiumicino (Italy) and Valencia (Spain).


The Italians are believed to have put more money on the table by way of an event fee, and have a lot of infrastructure work ahead of them to cater for the teams. Valencia, might have the same Euros, but is much, much easier and more cost effective for the teams, with existing bases, familiar territory and city officials who fall over themselves in their haste to make things happen quickly.

Quite simply, Valencia has the track record, while the other two have a lot of work ahead of them.

In conclusion, San Francisco should be first favorite as the venue for the 34th America's Cup. The City would make an outstanding regatta and sailing event host. It is theirs to lose.

For Kimball Livingstone's earlier take and backgrounder on the San Francisco situation http://kimballlivingston.com/?p=4297!click_here

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