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America's Cup: Emerald Isle makes strong bid for AC37 venue hosting

by Richard Gladwell, Sail-World NZ 29 Aug 2021 06:57 PDT 30 August 2021
The leading boats in the Beaufort Cup Fastnet Race for military and rescue service crews on day 1 of Volvo Cork Week © David Branigan / Oceansport

With just over two weeks remaining before the announcement of the venue for the 37th America's Cup, Ireland and specifically County Cork, have put forward a compelling case, including support from top politicians.

Three other venues are in the mix including Auckland, Valencia, and a Middle Eastern venue, reported to be Jeddah.

With just over two weeks before the venue announcement, the bidding has gained a new energy, and as with the 2021 America's Cup venue, the final decision may not be made until the final hours.

The Irish bid has strong political support, a factor which is lacking in Auckland - which would normally be automatic choice to host the 37th America's Cup. Its America's Cup bid is hitched to another major project - Global Ireland 2025, a multi-faceted strategy launched in 2018 to recover from its lost decade. The Cup hosting will turbo-charge that project. The other hosting candidates, may have a similar strategy, but as Auckland and New Zealand have found to their cost - a stand alone Cup hosting inevitably delivers in different ways and quantity to the initial proposals.

Ireland also has a 67% double-jab vaccination rate for COVID, which is a precursor to allowing the nation to open its borders to double-jabbed international fans, sailing media, superyachts, sponsors, and VIPS. It has just announced a seven step plan to exit various COVID containment measures, effective September 1, with other measures being implemented until October 22, when the 11.30pm pub curfew will be eased. As part of the EU Ireland runs the EU Digital COVID certificate system allowing entry along with a 72hr negative COVID test.

Few of the above groups were allowed into Auckland for the 2021 America's Cup robbing the economic value from the New Zealand hosting. New Zealand's double-jab rate is currently less than 22%, with no immediate plan to open its borders to international sports teams and their cohorts.

The venue announcement will be made by America's Cup defender, and reigning champion Royal New Zealand Yacht Squadron and its team Emirates Team New Zealand, on September 17.

Emirates Team New Zealand has consistently refused to release the short-listed venues for AC37, and it may well be that a dark horse is also running in the AC37 stakes.

Cork stakes claim

Cork Harbor, on the south coast of Ireland, is the second largest natural harbor in the world after Sydney Harbor in Australia.

It is understood that 44 acres of waterfront land owned by the Doyle Shipping Group, have been proposed as the site for six team bases. The area has also been earmarked for redevelopment as a staging area for windfarms to be constructed in the Celtic Sea, along with urban renewal planned for several sites adjacent to Cork Harbour. It is likely that the projects will be given some concurrency, with the America's Cup performing its usual role of fast-tracking the planning and construction process.

Doyle Shipping is a well established marine organisation in Cork and now operated by the third generation of the Doyle family - all of whom are keen sailors.

Chairman Connor Doyle, a long time and successful Dragon sailor, was a competitor in the recent Rolex Fastnet Race, finishing 11th overall in 62 strong Class IRC 1, in his 50fter. His brother Frank is also a director of the family owned company.

Their father Denis Doyle was also prominent international yachtsman, captaining the Irish Admirals Cup team on several occasions. He was the owner of several top offshore racers all named 'Moonduster' whose lineage included IOR designs by Sparkman & Stephens, Ron Holland, and German Frers.

The Doyle site is a large flat wharf area adjacent to the main deepwater channel of Cork Harbour, which will need some upgrading - but not to the extent required of Auckland's Wynyard Point for AC36. Costs of NZ$342million to develop the venue for the America's Cup seem very inflated, and a more realistic estimate is being prepared which has not yet been publicly announced.

Three race areas are available in the Inner and Outer Cork Harbour and outside on an ocean course. The same areas are used for Cork Week, one of the premier events on the UK sailing calendar which has previously attracted a fleet of 600 yachts. The event is noted for its après-racing activities as much as the on-the-water action.

The ocean course is expected to be the primary course for AC75 racing.

300 years of yacht racing

Cork is also home to the oldest yacht club in the world, Royal Cork YC established in 1720, which celebrated its tricentennial last year, despite the COVID pandemic.

The lead politician for the bid, Foreign Minister Simon Coveney is also a keen sailor. His father, politician Hugh Coveney, is best known for his series of IOR offshore racers including 'Golden Apple' and as part-owner of a series of Admirals Cup yachts, 'Big Apple' and 'Golden Apple of the Sun', amongst others.

Hugh Coveney enticed promising New Zealand designer Ron Holland to Ireland in 1973 to design the 'Golden Apple', which won the British Trials and contested the 1974 One Ton Cup. Holland's arrival boosted Ireland's offshore standings, to the point where the Irish team was top team in the 19 team (57 boat) 1979 Admirals' Cup before the start of the tragic Fastnet Race, and had a lead that, in a normal year, should have assured them of winning the trophy, regarded as the world championship of offshore racing.

Initially helped by Hugh Coveney's continued design patronage, Ron Holland established a 15 strong design office in Cork, staying for 40 years in a design career that included top IOR racing yachts through to superyachts including Mirabella V, now M5, the largest sloop afloat. Ron Holland, along with Laurie Davidson and Bruce Farr was part of the triumvirate of leading New Zealand designers who worked together to design KZ-7 'Kiwi Magic', the Challenger for New Zealand's first America's Cup campaign in Fremantle.

Cork is also the home of second generation racing yacht builder Killian Bushe, whose most recent project was as a key part of the build team for the 125ft Skorpios, which took line honours in the just concluded Rolex Fastnet race. Cork is also home of Ireland's top sailor, Harold Cudmore - a dominant figure for many years on the match racing and offshore racing circuits, as well as being part of several America's Cup teams.

America's Cup part of a bigger plan for Ireland

The Irish business case for the America's Cup is believed to be hinged around the multi-faceted Global Ireland 2025 strategy designed to expand Ireland's global presence. Global Ireland was launched prior to the COVID pandemic and has been rejigged since. Its aim is to to greatly increase Ireland's international presence through a number of initiatives.

Still a member of the European Union, Ireland has a number of advantages which can be exploited following Brexit. Cork is just two hours flying time from Europe, making it attractive, as is Valencia, to team and event sponsors wanting to give key clients and VIP's and America's Cup experience.

The substantial Irish government support comes from Coveney and the Taoiseach (PM) Michael Martin. Both hail from Cork, as does Stewart Hosford, CEO of Origin Sports who have been working with Emirates Team New Zealand on attracting and evaluating venue bids.

As Foreign Minister, Coveney also has his hand on the Irish Immigration lever, part of which will control team, event and fan entry into Ireland for the 37th America's Cup. Being able to deal with a single top level politician who has Coveney's assets, not the least of which is a sound understanding of sailing, is in stark contrast with Team New Zealand's estranged relationship with the New Zealand Government and Auckland Council and their media attack dogs.

In short the Irish Government seems to be able to grasp the potential of an America's Cup Hosting - something that was beyond the New Zealand horizon.

It is believed that 35 expressions of interest were received for the AC37 venue hosting which were cut to a short list of four (including Auckland) in early March, prior to the staging of AC36 in Auckland.

The warmth of the Irish political backing for the AC37 venue bid is in stark contrast to the New Zealand political climate with leaks intended to discredit Team New Zealand and its management being a regular occurrence for over 12 months.

Valencia gets serious

Sail-World's sources in Valencia advise that their hosting bid, based around infrastructure developed for the 2007 America's Cup and used again in the Court-ordered 2010 Match, is now full-on after a slow start when their Mayor was initially reported as being only luke-warm with his support.

The Spanish Government, and the local Government in Valencia, invested a USD$3.237billion to create the infrastructure ahead of the 2007 America's Cup. That investment is still being paid off, with $20million still outstanding.

Parties associated with the Valencia bid were initially planning on being able to put together a bid drawing on the €750 billion Next Generation EU fund of which Spain has a €17 billion share.

That is no longer at the centre of the Valencia bid, but still of of it. The Spanish proposal is now backed by the private sector, after several global Spanish companies came onboard along with local/central institutions. Spain seems to have now understood that they have the opportunity to get a third use from the excellent existing facilities and infrastructure, without incurring the eye-watering expenditure of the 2007 hosting.

With the exception of Auckland, none of the bids would appear to include an America's Cup team. However that could be change when the new Protocol is announced on November 17, which will have provisions for "Emerging Nations" to get new teams/countries into the event.

Spain was a regular Challenger for the America's Cup in the IACC era with Pedro Campos led teams competing in the IACC monohulls in the 1992, 1995 and 2000 Challenger Selection Series for the Louis Vuitton Cup, and again in 2007 in Valencia. Ireland was represented at four America's Cups between 1899 and 1920, by Sir Thomas Lipton's Shamrocks. He challenged for a fifth and final time for Northern Ireland, in 1930, after Ireland was partitioned in 1921.

An America's Cup challenge from Spain or Ireland may eventuate under the Emerging Teams provisions already announced to be part of the Protocol for the 37th America's Cup. Spain has a strong record in the America's Cup, including four challenges between 1992 and 2007. Spain won two medals, in the Finn and Mens 470 at Tokyo2020, and clearly doesn't lack for sailing talent.

After Sir Thomas Lipton's five challenges over 30 years starting in 1899, Irish sailors and builders have been involved in key roles in other America's Cup teams, notably with Harold Cudmore and Killian Bushe. However any Irish Challenge is expected to draw heavily on the resources and talents of the 70million Irish diaspora scattered around the globe.

The Irish 49er crew won two races at the Tokyo2020 Olympics, and would have made the top ten in the event, contested by America's Cup champions Peter Burling and Blair Tuke, had they not been hit with a double race disqualification after a measurement spot check where one of their trapeze belts was just 9gms over the specified 2kg weight. That very minor error cost them very countable second and sixth places in the two races. If the Irish do challenge, it will be an opportunity to bring new sailing talent through onto the international sailing stage, and get back into the position it was in during the 70's and early 80's.

Kiwi budget underspend

Nothing of their bids has been said publicly by any of the other potential venues, which are reported elsewhere to include Jeddah, located on the Red Sea, in the Kingdom of Saudi Arabia.

The Protocol for the 37th America' Cup is expected to be released on November 17, six months after Emirates Team New Zealand successfully defended the America's Cup on March 17, 2021. It is being negotiated between the Royal New Zealand Yacht Squadron and the Royal Yacht Squadron, based in Cowes, Isle of Wight, which appears to have dropped out of the venue selection process.

Emerging Nations aside, at least six teams are expected to enter the next America's Cup, which is the target set in the host venue bid document. At least one of the existing teams' first generation AC75's has a sale agreement negotiated with a new team for the first generation boat. All of those six teams are from clubs which have previous America's Cup experience.

As yet, there is no indication of the amount of the Hosting Fee, offered by the Irish government, or the Valencia bid, along with other items listed in the Venue Selection Process Hosting Guide developed by Origin Sports and commissioned by Emirates Team New Zealand.

The New Zealand Government and Auckland Council was reported to have offered a package totaling NZD$99million in cash and "value in kind".

The NZ bid's cash component was around $NZ31million, with the NZD$68million balance of "value in kind" being harder to comprehend, compared with other published financial arrangements involving public funds.

The Hosting Fee and commercial underwrite for the America's Cup in Bermuda in 2017 was USD$40million (NZD$57million) compared with the NZD$40million paid by the New Zealand Government for the 2021 America's Cup.

At the conclusion of an exclusive "good faith" negotiation period on June 17, the NZ Government is reported to have come in below the 2021 $40million payment with an offer of $31million towards hosting and TV coverage costs. Emirates Team NZ will again have to raise sponsorship to make up the $40million shortfall, as well as finding $100million to run the team.

The figure of $NZ342 million claimed in some Irish media as the price for AC36 in Auckland drops to $NZ117 million (E70million) once the infrastructure costs of $NZ 253million are removed, according to Auckland Council documents.

Despite subsequent reports in NZ and overseas media of America's Cup financial blowouts, it transpired that there had in fact there had been a budget underspend.

As the America's Cup champions were still being towed in from the final race of the 36th America's Cup. The funding was not sought by the team and was later declined. Newshub reported that: "The minister responsible for America's Cup support Stuart Nash said Cabinet has agreed in principle to use the under-spend from the $136.5 million set aside in Budget 2018 to support the successful team to stay together while it planned its defence." The condition tagged $5million was not sought by Emirates Team New Zealand and was politely declined a couple of days later.

Mood shift in Auckland

Last week it seemed that the public mood may have shifted in New Zealand, with a survey of 1,000 people conducted by Curia Market Research revealing that 72% of New Zealanders want the America's Cup defended in Auckland.

Forty percent of the people polled supported the increased government funding to $100m with 45 per cent opposed. Fifteen per cent were unsure. There was more support in Auckland for the Government to increase its bid, with 51 per cent of Aucklanders surveyed supported increased funding, while 38 per cent did not.

Only 14 percent of respondents want the event staged on foreign soil, while 13 percent either don't care or refuse to answer.

That sets the scene for a bidding competition between Auckland, Valencia, Jeddah and Cork, with requirements including a rent-free base for Emirates Team New Zealand, financial support for the team, outside of the event staging costs, and certainty around admission to the host country of teams, VIPs, sponsors, officials, fans and superyachts, without the need to COVID quarantine.

Contrary to the mainstream media view that the Venue Hosting is just a matter of who ponies up with the most money, only three of the 15 bid evaluation factors hinge around dollars - being the Rights Fee; the Operating Costs commitment; and the Underwrite of additional costs.

The fifteen factors are scored - some on a five-point scale - being the Rights Fee; the Operating Costs commitment; Race Village facilities; Onshore Teams Tech area; On Water Race and Spectator Facilities and Weather and Race Conditions. Others are scored on a four point scale being attraction to Commercial Sponsors; attraction to TV Broadcasters; and ease of Operational Delivery on site. The rest can get a maximum of three points being: underwrite of Additional Costs; TV Broadcast and Media Facilities; level of Interest and Commitment from the venue; Hospitality facilities; appeal to teams and sailors; and access to venue and accommodation.

Normally the 35 venues who expressed initial interest would be scored on these points using supplied documents and other sources; a short list is developed and site visits are conducted. Cork had its site visit before the 2021 America's Cup Match had even commenced.

With 35 years experience in America's Cup as a team, and with CEO Grant Dalton and COO Kevin Shoebridge having around the world race experience that precedes that, the venue selection is not just a tick box exercise. A key part is the relationship between the defender and the venue, and to see how close they can get to the best ever America's Cup - Fremantle in 1987.

The chosen venue has to have a bit of soul and vibrancy, rather than being just a pop-up production.

New Zealand is yet to determine its COVID entry strategy, post December 2021, and without some concrete assurances on open-border immigration, are unlikely to be awarded the venue hosting in two weeks time. While an America's Cup would be held in New Zealand in March 2024, teams would be expected to start arriving much earlier than the 36th America's Cup - maybe as early as December next year. Two teams still have bases in Auckland which are being used as storage facilities for first and second generation AC75's and AC36 campaign gear.

Although New Zealand has experienced only 26 COVID attributed deaths, many sports and other events have been cancelled, as the country continues to pursues a COVID elimination strategy.

The latest victim is the SailGP New Zealand regatta set down for Christchurch, in late January 2022, which was cancelled a fortnight ago, after an application for 170 Quarantine places in January 2022 was rejected by the New Zealand Government. For NZ SailGP Director, Karl Budge, it was the fourth international sports event he has had to cancel due to unsurmountable COVID-related barriers on the entry of international sporting athletes into New Zealand.

NZ Sports Minister, Stuart Nash, seemed resigned to waving goodbye to the America's Cup hosting, when interviewed on the AM Show immediately after the exclusive negotiations with Emirates Team NZ had ended.

"This will still be called Team New Zealand, it would have been good to hold it here, it could still be here - but the odds of that are incredibly low, to be honest," Nash said.

"I do think it's gone.

"We put $99m [$31m Hosting Fee and with $68m "value in kind"] on the table, it wasn't enough. Grant Dalton and the team are now free to go out and hook their wares anywhere around the world."

In response, Emirates Team NZ CEO Grant Dalton told Newshub if ETNZ do come to terms with a foreign city, Team NZ would still be New Zealand based and would spend most of their time preparing in Auckland.

"There seems to be this notion that we are about to pack our bags and head to another country," Dalton added.

"In the event that we have to go we will still have a World Series here, we will do our summer training here, we will build our boat here and the industry around us will still supply to us.

"In the end, we will still be the same organisation," Dalton added.

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