They don't call it a billionaire's boat race for nothing.
In exchange for hosting the $300 million America's Cup yacht race in San Francisco Bay, the city is slated to fork over $52 million as well as prime watefront real estate, according to a city budget analyst's report.
Much of the cash could be offset by fundraising done by the America's Cup organizing committee and hotel and sales tax revenue, but if the fundraisers can't come through and if the fans don't show up -- the city could lose as much as $22 million, the San Francisco Examiner reported.
Officials are still expecting the original 3 million total spectators, with approximately 880 boats in the water to see the race. The original estimate for boats was 1,000, based on an initial figure ciphered from Fleet Week. After analyzing actual Fleet Week attendance, the fan flotilla was more accurately sized at 880.
The America's Cup Organizing Committee are already past due on paying the city $12 million, it was reported last week. Officials say they have the money "committed" if not necessarily on hand.
Under the terms of the current deal between the race and the city, America's Cup would spend $55 million to rebuild crumbling city-owned piers in exchange for a 66-year lease at Piers 30-32 and ownership of Seawall Lot 330, a property already approved for condos.
Waterfront real estate is particularly hard to come by in San Francisco. Undeveloped waterfront real estate is unheard-of, so this is prime, prime property indeed.
The authority could then opt to do additional pier work and get 66-year leases on piers 26, 28 and 29, which would trigger repayment from The City with an 11 percent interest rate, the newspaper said. If the authority does too much work, the city could be paying it off for 91 years, the report said.
So city officials now want to amend that deal. Board President David Chiu told the newspaper that Pier 29 "should be taken off the table." Race officials say that it must remain in order for the event to be financially-viable.
The city is due $32 million from the Organizing Committee in addition to the $22 million that could potentially be offset by hotel and sales taxes. If that money comes through, the city could profit by a cool $2 million, the newspaper said. If it doesn't, well...
Oracle founder Larry Ellison brought the America's Cup to San Francisco after his Oracle Racing team won it overseas. San Francisco was one of three finalists to host the cup, the Bay Citizen reported.
-- A previous version of this story identified "race officials" as owing money to the city. The actual group is now accurate in the story, described as Amerca's Cup Organizing Committee.
