Yacht club’s dream overshadowed by billionaire battle

Prestigious America’s Cup sailing race could come to SF if BMW Oracle prevails — but first there’s the matter of those lawsuits.

Imagine two little boys in a bathtub scrapping about toy boats. Then, imagine them doing that for two years straight.

Now, imagine that they’re actually two of the wealthiest men on the planet. And those toy boats are actually a pair of brilliantly designed, impeccably staffed and unthinkably swift yachts, valued in excess of $100 million and built specifically for the Super Bowl of the sailing world — the 33rd America’s Cup — which might not even happen as scheduled if the men don’t stop their legal splashing contests long enough for cool heads to prevail.

Directly in the middle of this skirmish is San Francisco’s Golden Gate Yacht Club — the adopted home club of Oracle founder, yacht-meister and billionaire Larry Ellison — and the possibility of the race eventually being held in San Francisco Bay.

Sailing aficionados acknowledge that the idea of bickering children is the cynical impression casual observers may have gleaned from the protracted legal battles surrounding the 33rd America’s Cup, which is slated for February. But they also insist the lawsuits have been an unfortunate necessity to forge the fairest, fastest race between two of the world’s foremost sailing teams and continue the event’s long and storied tradition.

“We have had no choice but to go to court,” said Tim Jeffery, director of communications for Golden Gate Yacht Club’s team, with more than a touch of bitterness in his voice. “The other side has been trying to tilt the playing field.”

If that playing field has been flattened to everyone’s satisfaction in time, the race will happen in February at a yet to be determined location between defending champion Alinghi — a team backed by pharmaceutical and investment magnate Ernesto Bertarelli — and the Golden Gate Yacht Club’s BMW Oracle Racing — which is funded by Peninsula resident Ellison.

The America’s Cup is unique among professional sporting events. There is no standard schedule by which it’s contested, the defending champs get to decide many of the rules by which the next regatta will be raced, and serious challenges to those rules are often fought in New York’s court system, requiring justices to determine the intentions of an 1880s document called the Deed of Gift.

America’s Cup races are known for their intrigue, but the bad blood and suspense created by this one may be tough to beat. As November started — a mere three months before the event is scheduled to take place — it was still uncertain where the event would be held, and there was talk of postponing it altogether.

Certainly the stakes of the race are high — not only for Ellison and his team, but also for the Bay Area sailing community — Golden Gate Yacht Club Commodore Marcus Young said.

A win for Ellison and his Golden Gate Yacht Club team could finally bring the prestigious sailing race to San Francisco Bay, stimulating extensive improvements to The City’s central and southern waterfronts and setting the stage for the Bay to sparkle before an international audience of millions, he said.

Days after the 2007 contest, in which Alinghi won its second straight title, the Golden Gate Yacht Club challenged the Swiss to a race. In years past, the challenger had to beat out a field of contenders before facing the defending champs, but a byproduct of the legal wrangling is that this race will be head-to-head, San Francisco’s team versus the Swiss, Jeffery said. The winner of two out of three races will take home the Cup.

The billionaires have spared no expenses to prepare for the challenge. Golden Gate’s racing boat — called the BMW Oracle Racing 90 and nicknamed “Dogzilla” by its crew — is a 90-foot, carbon-composite trimaran, or a three-hulled boat, with a mast some 18-stories tall and sails large enough to cover a baseball infield. A team of 30 designers and scientists devised the vessel and it took more than 130,000 hours to build. A 20-person crew has been testing it.

The team had an unexpected setback in early November when the $10 million mast broke off in the middle of a test in San Diego. No one was hurt, and the team downplayed the accident’s significance.

Nothing of the sort can happen during the race if the team hopes to bring the world’s oldest active sports trophy to San Francisco for the first time.

And that is indeed the goal of the venture, Young said. By the rules of the Deed of Gift — the 150-year-old document that governs the race — the Cup holder gets to choose where the next race will be held. If Ellison’s team wins the event in February, it would almost certainly bring the Cup to San Francisco Bay in the future.

“The San Francisco Bay, in a way, is the perfect coliseum for an America’s Cup — there’s so many perfect vantage points to watch it from,” Ellison said. “People could literally line up from Berkeley to the Golden Gate Bridge to watch this race.”

That would not only be a boon to sailing in the Bay — and to the ranks of the Golden Gate Yacht Club — but could also bring some much-needed attention to San Francisco’s central and southern waterfront, which would likely host the event. In Valencia, Spain, which hosted the 2007 America’s Cup, about $1 billion was spent on improving the waterfront, building an America’s Cup village and improving deep-water access to the port.

“That’s the end game — to someday have it here,” the commodore said. “But the only way to have it here is to win the rights to do that by winning the Cup. That’s our goal in February.”



Local aims to bring home the Cup

John Kostecki first stepped onto a sailboat on the shining San Francisco Bay when he was 2½ years old — and he never really stepped off.

Kostecki, born and raised in San Rafael, is the only local on the 20-member team that will sail the BMW Oracle Racing trimaran — hopefully to victory — in February’s America’s Cup. His role is as a tactician, advising the vessel’s helmsman on how best to maneuver the boat on the course or place it in relation to the competitor to be able to move fastest.

His first ventures on a boat were also the first for his parents — they were just learning to sail when he was a toddler. Later, they got into racing and so did he.

By the time he was 8, he was sailing on his own through the Richmond Yacht Club’s junior program.

“From there, I moved up to bigger and greater things,” he said, humbly.

Bigger and greater things is perhaps an understatement. Kostecki won an Olympic silver medal in 1988 in the soling class and has two world championships in the small-keeled boat category. He has since served on five America’s Cup teams.

“It’s great being able to represent one of your yacht clubs from where you grew up sailing,” he said. “I mean, I was hanging out at the Golden Gate Yacht Club when I was 5 years old.”

Kostecki said it would be even more exciting if he was able to bring the biggest event in the sport he loves home with him.

“It’s been a dream of mine, really since I started sailing in the America’s Cup, and the only way to do it is if Larry Ellison’s team won,” he said.

“San Francisco is a perfect venue for the America’s Cup because it’s got great wind, and it’s surrounded by some great viewing points — Alcatraz and San Francisco and the Marin Headlands,” Kostecki said. “It’s kind of like a stadium, so to speak. It’d be great.”

— Katie Worth


John Kostecki

Born: June 7, 1964

Position: Tactician


Current: America’s Cup with BMW Oracle Racing

2005-06: Volvo Ocean Race with Ericsson Racing

2003-05: America’s Cup with BMW Oracle Racing

2002: Winner, Volvo Ocean Race with illbruck Challenge

2000: America’s Cup with AmericaOne

1997-98: Whitbread Round the World Race with Chessie Racing

1995: America’s Cup with Young America

1991: America’s Cup with America3

1988, 1986: Soling world champ

1988: Olympic silver medalist in soling

Source: BMW Oracle Racing


Before fighting on water, they are fighting in court

The Deed of Gift, the governing document of the America’s Cup, was written in 1887. However, Larry Ellison of BMW Oracle (Golden Gate Yacht Club) and Ernesto Bertarelli of defending champion Alinghi (Societe Nautique de Geneve) have issued legal challenges to various aspects that set the ground rules for the upcoming races. Their have been eight legal actions in two years between the two parties. (Note: New York courts rule on America’s Cup disputes because the Cup is held under the terms of a charitable trust established under state law.)



July 3: Alinghi wins the 32nd America’s Cup by defeating XXXX. Newly formed Spanish-based Club Nautico Espanol de Vela (CNEV) files to be the challenger of record for the 33rd installment. Two days later, Societe Nautique de Geneve (SNG) releases protocols for the race. At the same time, the GGYC files to become the challenger of record. The GGYC immediately files a court challenge, claiming that CNEV is not a legitimate yacht club (it was formed by a handful of vice presidents of the Spanish Sailing Federation with the sole intent on racing for the Cup).

Nov. 27: New York State Supreme Court rules in favor of the GGYC, declaring the San Francisco Club as the rightful challenger under the Deed of Gift.



March 13: Supreme Court Justice Herman Cahn denies SNG’s motion to renew and reargue, finalizing his order that invalidates CNEV’s challenge and making the GGYC the challenger of record.

July 30: New York appeals court reverses the ruling 3-2 and reinstalls CNEV as the challenger. The GGYC files an appeal the next day.

Dec. 8: The GGYC sends a letter to SNG saying it will not submit an entry by the Swiss club’s Dec. 15 deadline. The letter claims SNG’s regatta is not “a legitimate America’s Cup” and would focus on winning the court battle.

Dec. 31: The New York Yacht Club, which was the America’s Cup champion for 132 years, and the San Diego Yacht Club file friend of the court briefs in support of the GGYC’s position.



April 2: The New York appeals court rules in favor of the GGYC.

May 12: After the GGYC files a motion asking the New York Supreme Court to hold SNG in contempt for not committing to the court-ordered Feb. 10, 2010, race date, the justices deny the motion by reaffirm the date.

July 14: The GGYC again files a motion asking that SNG be found in contempt for changing the match rules in secret to allow the Swiss syndicate to build a boat with powered winches and a moveable ballast, which were allegedly illegal under the SNG rules. SNG files a competing motion asking the GGYC be disqualified as the challenger if it could not produce a custom-house certificate for its yacht within 14 days. SNG also disputed the GGYC’s allegations, saying the powered winches and moveable ballast was common for high-performance catamaran racing under SNG rules.

July 29: The court refuses to hold SNG in contempt and rules that the Deed of Gift does not specify any restrictions on the how the yachts are constructed. Auxiliary power for winches and moveable ballast is allowed. Also, a hearing on the custom-house certificate issue is ordered.

Sept. 2: The GGYC appeals the July 29, 2009, court ruling.

Sept. 18: The court reaffirms its July 29, 2009, ruling and the custom-house certificate, now called a certificate of documentation, has to be delivered by the GGYC two weeks before the first race. The GGYC is scolded by the court for “unsportsmanlike behavior.” Also, SNG files its response to the GGYC’s Sept. 2, 2009, appeal, arguing that the court has already ruled on all the contentious issues.

Sept. 29: The GGYC replies to the Sept. 18, 2009, motion by SNG, stating that the rules that should be in effect for the race must be the ones that were in place when the BMW Oracle syndicate made its challenge. The GGYC says SNG could alter the rules to make it impossible for the challenger to prevail.

Oct. 1: A motion by GGYC asks that the race be held in Valencia, Spain, where SNG had previously stated the race would take place, and that Ras al-Khaimah in the United Arab Emirates — the new proposed site — is too dangerous due to its proximity to Iran.

Oct. 9: SNG provides the court with documents it obtained from the U.S. Coast Guard showing that the GGYC on Sept. 18, 2009, requested a certificate of documentation be issued quickly because it planned to ship its yacht to the United Arab Emirates on Sept. 25. SNG further says the GGYC misled the court at an Aug. 10, 2009, hearing.

Oct. 13: SNG responds to the Oct. 1 GGYC motion, arguing that the April 2, 2009, ruling allows the race site to be “Valencia, Spain, or any other location,” including Ras al-Khaimah or any other venue in the Northern Hemisphere.

Oct. 16: The GGYC tells the court it refutes the Oct. 9 allegations by SNG that it misled the justices during the Aug. 10, 2009, hearing. The GGYC says it was SNG, not the GGYC, that engaged in unsportsmanlike conduct.

Oct. 19: Responding to SNG’s Oct. 13, 2009, filing, the GGYC says Valencia is the only exception to the Deed of Gift’s restriction to the Northern Hemisphere restriction because it was an agreed-upon site.

Oct. 26: GGYC files a breach of fiduciary lawsuit against SNG, seeking to have the host club removed as trustee. The suit alleges Bertarelli is using the America’s Cup for financial gain.

Oct. 27: New York State Supreme Court judge rules that Ras al-Khaimah cannot host the races.

Nov. 2: Alinghi says it will appeal ruling that rejected Ras al-Khaimah as the race site.

Nov. 5: Alinghi, still preferring the UAE site, offers to hold the races in Australia in a hope to end the long court battle.


America’s Cup facts

WHO: Defending champion Alinghi of Switzerland, backed by billionaire Ernesto Bertarelli, versus BMW Oracle Racing of the Golden Gate Yacht Club, backed by billionaire Larry Ellison

NEXT RACE: Feb. 8-12, best-of-three series

WHAT: Alinghi is using a catamaran; BMW Oracle is using a trimaran

WHERE: To be determined by the New York Supreme Court; Alinghi wants it to be held at the port of Ras al-Khaimah, which BMW Oracle says is too close to Iran and poses a security threat

OLDEST TROPHY: The America’s Cup is the oldest active trophy in international sports, predating the modern Olympics by 45 years

NAME GAME: Trophy was originally called the Royal Yacht Squadron Cup, then renamed the America’s Cup after the first country to win the event

SERIOUS BEGINNING: “Who is first?” Queen Victoria of England asked after the inaugural race; “America” has won, she was told; “Who was second?” asked the Queen; “Your majesty, there is no second”

WE ARE THE CHAMPIONS: The New York Yacht Club held the prestigious title of champion for 132 years until the Australians upset the Americans in 1983; the San Diego Yacht Club restored American pride in 1987 by reclaiming the title; New Zealand took home the Cup in 1995 and Switzerland joined the winner’s circle in 2003

LUIS VUITTON CUP: Name of the challenger series that determined the other finalist for America’s Cup races; the series began in 1983 under the Vuitton name, but it was discontinued following the 2007 event due to disagreements between the sponsor and Bertarelli


America’s Cup history

1848: Queen Victoria of England orders the creation of a 27-inch-tall “One Hundred Guinea Cup,” made of solid silver, for a yacht race “open to all nations”

1851: America, a schooner out of the New York Yacht Club, defeats 16 British boats in the inaugural race at Cowes, England

1870: The New York Yacht Club uses 14 boats to defeat the lone British entry in the second installment, this one held in U.S. waters

1877: Canada joins the fray

1903: The last race until 1920 — due to World War I and other events — is held

1930: J-Class boats debut with masts as tall as 165 feet

1958-87: 12-meter boats dominate the competition

1970: Multiple challenging yacht clubs used for the first time

1980: American interest heats up when Dennis Conner helms Freedom past countrymen Ted Turner and Russell Long, then beats Alan Bond’s Australia 4-1

1983: The infamous winged keel is introduced on Australia II, which defeats Liberty and takes the Cup from the New York Yacht Club for the first time in 132 years

1987: World interest increases as 13 challengers compete; Conner’s Stars and Stripes, based out of the San Diego Yacht Club, sweeps Kookaburra 4-0

1992: The International America’s Cup Class is introduced to try to put competitors on a level playing field following an explosion of technological advancements

1995: Russell Coutts hauls the trophy back to Auckland after New Zealand beats Conner and Paul Cayard’s Young America

2003: After winning again for New Zealand in 2000, Coutts bolts to the Swiss entry Alinghi and beats his country’s entry