America's Cup: 'Not One Cent' In Private Funding Guaranteed
|This city knows a bit about being under water...|
"I don't think everybody understands. We say there'll be huge benefits -- $1.2 billion. That's the benefit to businesses," explains Rose. "While we acknowledge that, what we're saying is there is a huge cost to the city to do this. ... Yes, there are benefits to San Francisco, but they go to businesses, not the city and county's treasury.
"I want to make the Board of Supervisors aware that there is a cost to the city if we do this."
The report was pooh-poohed by the mayor's office, which noted that a revised budget analyst's study which will likely be released on Wednesday may paint a happier financial picture. The mayor's office also claimed the budget analyst's report didn't acknowledge the city's pledge to raise some $32 million in private funding.
Rose was puzzled by the notion his report didn't include mention of the private funds, because it specifically did -- noting this money is in no way guaranteed. "It's not under the terms of the agreement, it's not even required under the terms of agreement, not one cent," he said. "So there's no guarantee whatsoever we'll get that $32 million."
And, even if that money comes in, it isn't enough to offset the city's projected losses. The budget analyst's report predicted $42 million lost in the staging of the event; $86.2 million lost by giving away up to 75 years of free leases for waterfront property to corporations controlled by Larry Ellison; and an additional $14.5 million in loan debt if the city takes out financing to pay for the necessary upgrades.
You can read the Thursday report in its entirety here.
As for next week's pending report, that one is based upon the "final agreement" currently wending its way through the city's legislative process rather than the nonbinding "term agreement" approved by the Board of Supervisors on Oct. 5. There are some differences -- as the Chronicle notes, it gives the city more options on where to build venues, which could save money in demolition, reconstruction, and tenant relocation costs. But Rose doesn't think it will amount to much.
"A lot of this stuff, it will stay the same," he says of the financial numbers in the pending report. "There will be some changes. They've changed the term agreement to some extent.Though it's not that much different."
In other words, anyone hoping that next week's report will pull a 180 and claim that, yes, the city can make money hosting the America's Cup instead of losing cash prodigiously -- is on very thin ice.
Fred Brousseau, the lead author of the pending fiscal feasibility analysis, said it's too early to say how much less money the city now stands to lose based on additional flexibility on where to construct America's Cup venues. But he echoed Rose's sentiments that the key message of his report is that "there's a difference between economic impact [of an event] and its impact on city coffers."
That, pun intended, is valuable advice.