City narrowly escaped bad America’s Cup deal 

Fifteen months ago, the Board of Supervisors unanimously approved an insufficient agreement with the America’s Cup Event Authority.

San Francisco should be the host to the 34th America’s Cup on our spectacular Bay, but not at any price.

Former Mayor Gavin Newsom promised billionaire Larry Ellison a host of Port of San Francisco assets, including Seawall Lot 330, a highly valuable Port of San Francisco property, for condominium development and long-term leases on as many as three piers in the vicinity of the Bay Bridge.

City leaders and America’s Cup “experts” touted repeatedly that the race would generate more than $1.4 billion in economic activity and generate the equivalent of 8,800 new jobs. A new nonprofit, headed by Newsom’s Recreation and Park Commissioner Mark Buell, was formed to help alleviate the financial hit on The City, including anticipated costs for planning and operating expenses. Their goal was seemingly simple: Raise $32 million to offset The City’s costs. There were City Hall backslaps all around.

A mere few days after the board vote, the smooth-sailing deal hit a headwind. Team Ellison began fueling rumors that Rhode Island just may be its ideal spot for the America’s Cup.

The Billionaires Boys Club wanted more from The City. Much more. America’s Cup negotiators demanded additional city piers — including piers 19, 23 and 29, all of which produce significant revenues for the Port.

City negotiators proved no match for Team Ellison. Rather than call Ellison’s bluff, Lt. Gov.-elect Newsom, still reeling from the loss of the 49ers, was desperate to avoid another public relations crisis. And sadly for taxpayers, he had political friends willing to hop, skip and jump to please the minted, elite yachting crowd. On Dec. 22, 2010, only eight days after the board’s vote, board President David Chiu wrote a letter supporting the unseen and unapproved changes without review by his own colleagues on the Board of Supervisors. Newsom, without the concurrence of San Francisco’s legislative body, approved the new deal on New Year’s Eve and departed San Francisco for Sacramento and Marin.

The America’s Cup officially became the “Ellison Prime Waterfront Real Estate Pursuit.”

Fortunately, a small brigade of courageous city staffers, civic-minded organizations and good-government residents began to single-mindedly question the fiscal terms of the Dec. 31, 2010, arrangement. City Budget Analyst Harvey Rose issued a damaging report delineating the fiscal improprieties and abandonment of our city’s standard fiscal practices and the dire consequences for the Port of San Francisco.

To add insult, it was revealed that only three America’s Cup challengers have signed up to race, a far cry from the 15 teams America’s Cup organizers touted. That discrepancy finally woke up some on the Board of Supervisors. Tough but fair questions were asked, but not by so-called fiscal conservatives Mark Farrell and Sean Elsbernd; they are still hopping, skipping and jumping. To their dismay, finally, Team Ellison backed down.

On Tuesday, the board will vote to approve the new America’s Cup agreement — one that is vastly improved and doesn’t sacrifice precious waterfront land or give away long-term leases to billionaires, although it still doesn’t require Ellison to pay his fair share.

Now, it is possible to have a race that showcases our city and natural amphitheater without giving away public assets or The City’s financial health.

The lesson? Team Ellison overreached. The team pushed The City around and almost got away with it. But thanks to the determination of professional city staffers and a loud public outcry, San Francisco narrowly dodged that bullet.

Aaron Peskin is the former Board of Supervisors president and the current chair of the Democratic County Central Committee.

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Aaron Peskin

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