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AC 34 Numbers Are In

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  • AC 34 Numbers Are In

    The financial numbers are in, and depending on how you look at it, it was a boon for the City or a bust: We'll start with the upbeat America's Cup Press Release:

    The preliminary economic impact report on the 34th America’s Cup is in and the numbers are substantial. The independently commissioned report shows an economic impact to the city of $550-million dollars and over 3,800 jobs created.

    “Hosting the 34th America’s Cup in San Francisco showcased our beautiful City to the world and brought thousands of new jobs, long-overdue legacy waterfront improvements, international visitor spending, and a boost to our regional economy,” noted San Francisco Mayor Ed Lee in a statement. “Our investment brought in significant revenue to the City and the lessons we learned will help us deliver even better world-class events in the Bay Area in the future.”

    America’s Cup events ran from July through September this summer with racing on San Francisco Bay. The America’s Cup Park and America’s Cup Village venues along the waterfront attracted nearly 1-million visitors, with another million taking in the action from various sites along the city front.

    “This year's America’s Cup has been a winner for San Francisco, the Bay Area and California,” said Gavin Newsom, the Lt. Governor of California. “The sport on the water was thrilling, with ORACLE TEAM USA’s comeback win over Emirates Team New Zealand leaving fans on the edge of their seats until the winner’s gun fired. And economically, we scored as well, with an impact of over $500-million.”

    ORACLE TEAM USA staged one of the biggest comebacks in the history of sport in defeating Emirates Team New Zealand to retain the oldest trophy in international sport. The American team was down 8-1 before rallying for a 9-8 win.

    “The America’s Cup in San Francisco has been a very positive experience for both the event and for the city,” said Russell Coutts, the CEO of ORACLE TEAM USA, who selected San Francisco as the venue after winning the Cup in 2010. “The economic impact numbers show what the America’s Cup can deliver. San Francisco provided a spectacular venue for racing and the final was one of the most exciting in the 162-year history of the event.”

    The preliminary economic impact report was provided to the City by the Bay Area Council Economic Institute (BACEI), who will issue a full report before the end of the year.

    “The $550 million in economic activity generated by the America’s Cup is substantial,” said Sean Randolph, President of the Bay Area Council Economic Institute. “The activity benefitted hundreds of small businesses and other employers in San Francisco and the Bay Area and produced tax revenue that supports a wide range of important city services.”

    And a more pragmatic report we go to today SF Chronicle:

    San Francisco is still in the red from hosting the 34th America's Cup, which so far has cost taxpayers at least $5.5 million, according to draft financial figures from the regatta that The Chronicle reviewed Monday.

    That spending, though, allowed the city to host an event that drew more than 700,000 people to the waterfront over roughly three months of sailing and generated at least $364 million in total economic impact, draft figures from the Bay Area Council Economic Institute reveal. That figure rises to more than $550 million if the long-planned construction of a new cruise ship terminal, which the regatta served as a catalyst to finally get built, is factored in.

    Even the higher number, though, is well below the $902 million in economic benefit that was projected in March, a few months before the races were held. And it's a far cry from the $1.4 billion economic boost that was originally predicted in 2010, when the races were billed as trailing only the Olympics and soccer's World Cup in terms of economic impact.
    Dec. 22 bid deadline

    The real costs and benefits of hosting the regatta - the most prestigious competition in competitive sailing and this year the source of one of the most stunning comebacks in international sports - are expected to be in the spotlight as Mayor Ed Lee prepares to submit a preliminary proposal for hosting the next Cup by a Dec. 22 deadline.

    Critics contend that using taxpayer funds for the event amounted to subsidizing a vanity race for the ultra-rich. Supporters view it as a smart investment that pumped up the local economy, brought international media coverage and prodded city officials to finish planned waterfront improvements that had languished, including better sidewalks and a promenade at Fisherman's Wharf and a redone bike path and boat berths in the Marina District.

    The Cup "showcased our beautiful city to the world and brought thousands of new jobs, long-overdue legacy waterfront improvements, international visitor spending, and a boost to our regional economy," Lee said in a statement.

    It came at a cost.

    The city spent $20.7 million to hold the event, according to the latest figures from Lee's office. That number does not include more than $180 million in long-planned improvements around the waterfront that were finally completed in advance of the event. The most notable was the new cruise ship terminal at Pier 27, which is only partially finished.

    Ongoing private fundraising, which was intended to help cover the city's event costs and initially pegged at $32 million, has so far only reimbursed $8.65 million to taxpayers, while also covering other obligations. If the net increase in city tax revenue of $6.6 million during the event is factored in, that still leaves taxpayers $5.5 million in the red.

    "A $5.5 million deficit, all for a yacht race for billionaires," said Supervisor John Avalos, who maintains that such money could have been better spent improving city services in outlying neighborhoods like the Excelsior, which he represents. "The whole event has been nothing more than a stupefying spectacle of how this city works for the top 1 percent on everyone else's dime."
    'Moving the goal posts'

    Even applying event-generated tax revenue to the city's bottom line was "moving the goal posts" from the original agreement in December 2010 with regatta organizers, Avalos said.

    By early 2012, though, some city officials were already contemplating factoring in the tax revenue. A February 2012 report by board Budget and Legislative Analyst Harvey Rose projected city event costs at almost $52 million. With $32 million from the America's Cup Organizing Committee and $22 million from event-related tax receipts, Rose's report projected the city would have a $2.2 million surplus under that scenario.

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  • #2
    Quite a contrast in opinions.