A dramatically scaled-down America’s Cup lease deal with The City will be decided Tuesday by the Board of Supervisors amid more uncertainty over the yacht race’s overall vitality.
Since announcing The City as the venue for the international event 16 months ago, race officials have faced a number of hurdles, including a sluggish market for sponsors and a long list of required approvals from city, state and federal agencies — not the least of which has been San Francisco itself.
“The complexity of these different agencies happens where no one coordinates with each other, and that requires you to self-navigate,” said Stephen Barclay, the chief operating officer of the America’s Cup Event Authority — the business arm of the race. “We never anticipated having to do separate deals, and especially not when some of these groups are in conflict with each other.”
Last month, prolonged negotiations among the America’s Cup, the Port of San Francisco and The City broke down, and a plan to have race officials spend $111 million to fix crumbling waterfront piers in exchange for long-term leases and development rights was set adrift.
That impasse, plus other failed agreements with the U.S. National Park Service to make Crissy Field a viewing area for the event, have forced layoffs for half of all employees working for the race group, Barclay said Friday.
“It’s 14 people in San Francisco and 14 more people around the rest of the world,” Barclay said. “The new deal essentially eliminated some of the needs.”
The revised deal now calls for about $20 million in waterfront infrastructure fixes to be made and financed mostly by The City before the race. Barclay said in a news release last week that race officials can “live with” the revised deal, even though it’s not what they anticipated when a pact was originally struck with ex-Mayor Gavin Newsom in December 2010.
Aaron Peskin, the local Democratic Party chairman and an outspoken critic of the original America’s Cup deal, said the trimmed-down terms present less risk to The City and won’t require giving up lucrative public waterfront properties.
“It’s a huge step in the right direction,” Peskin said.
Just days before the real estate deal was abandoned, Peskin and a group called Waterfront Watch filed a lawsuit against the America’s Cup over the event’s primary environmental document — a separate aspect of the race’s approval process. Supervisors could endorse the event’s development agreement Tuesday regardless of the lawsuit, but if litigants seek an injunction over the environmental plan, it could mean significant delays for race preparations.
“There are still some unresolved issues regarding environmental impacts, and I’m hoping those can be negotiated and resolved,” Peskin said.
Real estate agents are ready to open the floodgates of cash expected to pour in from sailing fans looking to get their hands on rental property for the America’s Cup yacht race. But there’s just one little issue holding up the big spenders — the loose race schedule.
Listings for properties in San Francisco, Sausalito and Tiburon are up for the regatta’s 2012 and 2013 events, but getting a look at the action from prime real estate won’t be cheap. Online listings are asking for as much as $60,000 per month for a seven-bedroom Pacific Heights mansion, or $10,000 to $15,000 per month for a spot in the Marina district. Home rentals in Tiburon are going for $16,000 to $20,000 per month.
“We’ve had a lot of interest — a lot of hits on the website,” said John Flavin, director of Rez Lux, a real estate group formed to service the America’s Cup market. “But there’s some question regarding the timing of the events. People are just waiting until that gets resolved before committing.”
Race officials said Friday they expect a solid list of events and their locations to be confirmed in the coming days.
A recent television deal with NBC had race officials potentially shuffling the schedule to include New York City as a new summer venue instead of San Francisco, but that plan has been scrapped, America’s Cup Chief Operating Officer Stephen Barclay said Friday.
Now, the America’s Cup also is eyeing early October for additional World Series events here. In that case, the festivities could coincide with San Francisco’s Fleet Week, which already draws thousands to The City.
The regatta’s main event in September 2013 is expected to draw the biggest crowds, which race organizers estimate at hundreds of thousands per day.
Race officials portray the regatta as third only to the Olympics and World Cup in terms of revenue generation for its host city, so the price of the listings is no surprise to the San Francisco Travel Association.
“People have been wondering what would come of this, and I guess this is an indication,” said Laurie Anderson, a spokeswoman for SF Travel. “It’s very much a free-market event.”