News that The City could be left holding the bag for millions the America’s Cup Organizing Committee has failed to provide is the exact scenario warned of by prudent city officials not cheerleading for the regatta. And it could cost a bit more than the figures reported over the weekend.
According to last year’s analysis by the Board of Supervisors’ budget and legislative analyst, the estimated costs The City will incur stand at $40.2 million. The Port of San Francisco is also pouring $21.9 million into the effort, $3.7 million of which does not come with long-term, noncup benefits.
That means even if private fundraisers hit their $32 million goal, San Francisco could come up short. And it doesn’t look like that goal will be hit; the money has purportedly dried up at $14 million.
Also, much of that was a hand-me-down from race organizers, described to SF Weekly last year as an “$8 million payment from [race organizers] characterized as an advance on future sales to be derived from a revenue-sharing split on sponsorships.”
Private fundraisers tasked with offsetting The City’s costs were afforded wiggle room in the lengthy contract, which says they must merely “endeavor” to raise the $32 million.
“Not one cent” in private funds is guaranteed, budget analyst Harvey Rose said in November 2010. “So there’s no guarantee whatsoever we’ll get that $32 million.”
In February 2012, city Controller Ben Rosenfield said, “If they don’t raise the money, it’s on The City.”
The budget analyst in 2012 estimated that if private fundraising stalled around its current take, San Francisco stands to lose some $11 million. This, however, is assuming $20.3 million in hotel taxes from visitors who will supposedly inundate The City.
That may not happen, in which case the added costs on city services such as police and Muni would be lower, and thus San Francisco would lose less money. Of course, a lower attendance figure would lessen the event’s promised billion-dollar impact on the regional economy.
In any event, this ship has set sail — races begin on San Francisco Bay in July.