San Francisco has an unprecedented opportunity to host the 34th America’s Cup.
The America’s Cup is the third-largest sporting competition in the world behind only the Olympics and the World Cup. In total, the series of sailing races is expected to generate $1.4 billion in economic activity — three times the estimated impact of a Super Bowl.
A recent analysis from Beacon Economics estimated that The City can create 8,840 jobs and generate more than $13 million in tax revenue if it is successful in becoming the seventh city to host the regatta.
Recently, much attention has been given to the costs associated with hosting the America’s Cup. Last month, San Francisco’s budget and legislative analyst released a report estimating $128 million in costs to the city and county for staging the event. The Port Commission discussed the term sheet earlier this week. The Board of Supervisors Budget and Finance Committee is scheduled to weigh in on the proposal — along with an alternative proposal — as early as next week.
A central point of the debate involves the long-term development rights that would be granted to an event authority in return for the $40 million to $60 million that would be needed to rehabilitate selected piers to deliver the event facilities. Critics argue that The City is “giving away” assets during a time of economic hardship. Much like the deal to develop AT&T Park, the Chamber of Commerce sees an opportunity to engage private capital to renovate Port property that would otherwise remain neglected for years to come.
It is true that San Francisco will have to spend city funds to host the America’s Cup. But the costs associated with hosting the regatta must be considered against the $1.4 billion in economic activity that will come to the private sector from hosting the event — an analysis missing from the budget analyst’s report.
Many businesses, residents and surrounding communities stand to benefit from the America’s Cup. Building and construction companies will immediately begin developing the event facilities. Once the races are under way, hotels, restaurants and retail outlets will accommodate thousands of visitors and spectators. Even after the culminating event is over in 2013, San Francisco’s convention and tourism industries will benefit from the extensive global media exposure generated during the competition.
From a business perspective, spending $128 million to earn $1.4 billion is a worthwhile investment. Even using the most conservative estimates, investing in the America’s Cup will deliver a significant net economic benefit to San Francisco and the Bay Area. This is an investment our city cannot afford not to make.
Steve Falk is president and CEO of the San Francisco Chamber of Commerce. His Examiner column will appear on the first Thursday of each month.