America's Cup Decimated: City May Save More Than $100 Million
|A much smaller wave...|
While the deal that last week advanced for a (now canceled) vote before the full Board of Supervisors called for between $111 million and $136 million in city money to be paid to the Event Authority, that number now appears to have dropped to perhaps less than $10 million.
In fact, the whole equation of the deal has been rebalanced. Before, the Event Authority was set to pour hundreds of millions into revamping San Francisco's run-down piers, and be repaid with 66-year rent-free leases -- or outright ownership -- of the now-lucrative sites.
Now the plan is for minimal bits of revamping to be done to waterfront land -- then everyone enjoys a big boat race.
When asked what mechanism was now in place for the Event Authority to make back its costs, Chief Operating Officer Stephen Barclay replied there no longer is one. They simply expect to be reimbursed for their expenditures, which he estimated as "a number in the millions, not in the 10s or 20s."
Construction of the America's Cup Village/cruise ship terminal at Piers 27 and 29 will continue. Teams will be housed at Pier 80, the site of today's hastily organized press conference. But crumbling Piers 30-32 are off the table. The city estimated it would reimburse the Event Authority some $80 million to spruce up the dilapidated piers in pre-race costs, and shell out $91.5 million in the long-term. Also off the table -- per Barclay -- is the prior deal to turn over "title" to Seawall Lot 330, across the Embarcadero from Piers 30-32.
In short, this is a very momentous turn of events; it might only be bigger if the city and Event Authority hired Captain Jack Sparrow to address the media at today's presser.
|The hull for Team Oracle's vessel, seen hanging in the background at Pier 80, is too long to even fit in this photograph|
Yet what the Event Authority could have managed to develop on that land is uncertain. What is certain is it would have been an exacting and painful process. In short, while the Event Authority's heavy investment was guaranteed, the form of how they would make back their money was not. So, essentially, the city and Cup organizers broke the glass in the case of emergency, and removed a prearranged fallback deal.
Rather than voting on a binding development agreement tomorrow, the Board of Supervisors will essentially go about its business. New numbers must be crunched and the process must wend its way through the Budget and Finance committee once again. But the ridiculous pressure to consummate this deal by month's end has alleviated. Much of that pressure dealt with construction deadlines on the would-be team facilities on Piers 30-32. Obviously that's not happening anymore. The piers can go back to deteriorating, as usual. Some manner of deal will come before the supes in the ensuing weeks.
Finally, some math: In the 10 to 15 years before it becomes totally unusable, Piers 30-32 is expected to generate some $53 million in revenue. The port and city had planned to forgo that money to instead pay the Event Authority around $91.5 million to fix it up, to be repaid via generational leases.
That's now off the board -- and an estimated $40 million bill to eventually remove the piers will face the city sometime down the line. In short, everyone figures to risk less, pay less, and, possibly, get less.
Mayor Ed Lee, however, was adamant that just as many people will show up for the race as anticipated previously -- despite worries regarding how many teams will participate.
But saying things like that is Lee's job. He remains mayor of an intriguing city -- and today was an intriguing day by any city's standards.