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Port official Jonathan Stern talks as fast as he walks, and pocket-size Mayor Ed Lee struggled to keep up both verbally and physically. During a media show-and-tell late last month, Stern played the role of supercharged Realtor, explaining to the new mayor how a series of functional — at best — Port facilities will soon be transformed into the glistening center of the 34th America's Cup by 2013. Two phrases passed Stern's lips with regularity: "Our current vision" and "tear this down."

Lee was enthused. It'd be impossible not to be; a crisper and more beautiful morning to showcase San Francisco's northern waterfront could not be conceived. When it came to hosting the Cup, "not only did San Francisco make the right decision," said Lee, with the bay as his glistening backdrop, "the world made the right decision."

Kelly Nicolaisen
Kelly Nicolaisen
Pier 27 is slated to become the glorious epicenter of the 34th America’s Cup.
ChewM2/AECOM
Pier 27 is slated to become the glorious epicenter of the 34th America’s Cup.
Supervisor Ross Mirkarimi says the “half-baked answers” coming from the mayor’s office were “maddening.”
Frank Gaglione
Supervisor Ross Mirkarimi says the “half-baked answers” coming from the mayor’s office were “maddening.”

Former District 6 Supervisor Chris Daly was not among the scrum of elected officials and politicos assembled at Pier 27 to politely applaud Lee's words. It'd be unthinkable for the caustic former supervisor to be there. And yet, without him, no one else would be there, either.

It's hard to find anybody in this city with a neutral position on Daly. He is loved or he is hated: Were he to praise the use of water, a good portion of San Franciscans would reconsider bathing. His reputation as a black belt of boorishness was cemented in the waning days of his tenure last month, when he and other progressives were ambushed by the moderate political machinations that led to Lee's anointment as mayor. This inspired one last epic tirade from Daly — and it was volcanic by even his lofty standards. The termed-out supervisor lumbered across the board chamber to curse out his colleagues, capping the escapade by snarling, "It's on like Donkey Kong" at president David Chiu, a Lee ally. For a man who left public office on Jan. 8 after 10 years in the public eye, it was an unfortunate final act; one-upping T.S. Eliot, Daly went out with a bang and a whimper.

Yet Daly's true goodbye gift to this city — apart from inspiring a Donkey Kong revival — was countering former Mayor Gavin Newsom's Ahab-like drive to land the America's Cup and ram through a high-priced deal before decamping to his new job in Sacramento.

In doing so, Daly undermined an inferior pact centered on Pier 50, adjacent to AT&T Park on the central waterfront. Upfront city losses alone on that deal were subsequently pegged at some $58 million, with nearly that much again probably gone over the coming decades via land giveaways. The arrangement now in place, headquartered at Pier 27, lessens the land handed to Oracle CEO and yachting billionaire Larry Ellison from 35 to roughly 20 acres. Shrinking the Cup's footprint — largely by taking Pier 50 off the table — will save the city a considerable sum. Under the northern waterfront plan, San Francisco is expected to lose around $12 million in the near term — but that money could be made back, and then some, down the road.

Daly is best known for his tub-thumping bellicosity — and there was plenty of that, as he used the bully pulpit of his office to belittle the initial America's Cup deal to anyone who'd listen (and many who wouldn't). While his style often leaves much to be desired, the substance of Daly's arguments couldn't be ignored.

"I will give real credit to Chris Daly for raising the cost issues of the central waterfront option," says Chiu, the subject of Daly's ire. Chiu, who contends Daly "blew up that deal," continues: "The conversation Supervisor Daly started absolutely helped save the city money." Sans Daly, Supervisor John Avalos says, "I expect we would have had a really bad deal go through."

And yet Daly made the pertinent financial questions he raised about Pier 50 easier to brush aside — by being Chris Daly. "Threats, tantrums, angry outbursts against the mayor and his fellow supervisors — sadly, it's just another normal day with Chris Daly at the Board of Supervisors," mayoral spokesman Tony Winnicker opined after the supervisor questioned the initial deal. The misgivings Daly expressed publicly, however, were those a number of his colleagues harbored privately — or would come to, once the numbers were vetted. Crucially, it was Daly who tasked the Board of Supervisors' budget analyst to reveal those sums.

While numerous City Hall officials have told SF Weekly that Port of San Francisco staffers were appalled by the push to give away huge swaths of the central waterfront to Ellison, Port officials were publicly onboard with the initial plan. San Francisco, it turned out, needed someone who didn't give a damn about his political future. Someone unaffected by the pageantry of hosting a world-renowned sailing spectacle. Someone immune to the giddy contagion of America's Cup fever. Someone to serve as a civic party pooper who'd hammer the bottom line. In short, San Francisco needed an asshole — and one with clout.

Daly was qualified for that.


When you mention how remarkably well the America's Cup ordeal has ostensibly turned out, city officials involuntarily reach for a section of wood to knock. Rather than the initial cost-heavy arrangement centered on Mission Bay — a bleak neighborhood pockmarked by iterations of the structure on the Stolichnaya bottle — the city is sitting pretty along the northern waterfront.

While the Pier 50 deal would have eviscerated Port finances and siphoned scores of millions of dollars out of the city's general fund, the current deal pencils out alarmingly well for all parties involved — at least, the version everyone signed in mid-December. The city's upfront losses are estimated by the budget analyst and controller to be between $11.9 million and $13.3 million, respectively. The budget analyst predicts the city will barely make back that money over the next seven decades, while the controller foresees a profit of nearly $24 million. The price tag for the Event Authority, the organization Ellison formed to oversee the race, is greatly reduced as well. Its outlay might be as little as $55 million in infrastructure costs, down from some $150 million required for the prior plan (this money will be reimbursed by the city as time goes by — but that was included in the number-crunchers' analyses).

Potentially prohibitive dredging costs, which were to be paid by the city under the central waterfront plan, will now be picked up by the Event Authority. Housing the America's Cup along the northern waterfront will require fewer environmental hoops to leap through. And, to top it off, the race's northern migration will have no negative effect on the more than $1 billion in private business the Cup is expected to bring (the forthcoming billion-dollar bonanza benefiting local hotels, restaurants, construction companies, and others was the one statistic every analysis of the race's impact agreed upon).

Some in city government insist that this good fortune was somehow a preordained conclusion. Rather than sign on to a costly deal, the legislative process eventually "worked itself out" — and San Francisco is enjoying the best of all possible worlds. But the legislative process didn't have to work itself out. San Francisco regularly seals bad deals, and it could have done so again with the America's Cup — or made no deal, and lost the Cup.

In the rush to form a Get Along Gang for photo ops of dazzling America's Cup renderings featuring massive boats whizzing by awestruck onlookers, few city officials wish to focus on the divisive process that led to this happy outcome. Despite repeated entreaties, Port staff did not deign to speak on the record for this article. But numerous City Hall politicos and others say their ears were bent by Port staff complaining that the mayor's office was shunting them aside — and engineering a deal that would have bled the city of millions of dollars via evicted port tenants, construction costs, and rent-free development deals for the Event Authority. The Port staff "cannot unring that bell," one official said.

Port director Monique Moyer did not return messages seeking comment. But Daly says she pulled him aside and bemoaned that "she was the last to know" about the proposal to fob off Pier 50 and other Port properties to the Event Authority for 66 to 75 years. "I told her she couldn't have been" the last to know, he says, "because, clearly, I was." This especially rankled Daly, as the vast majority of land in question for the central waterfront deal was housed in his district.

Supervisors John Avalos, David Campos, and Ross Mirkarimi and other city officials all told SF Weekly the Port staff expressed deep misgivings about the central waterfront plan — and essentially claimed the Port was blindsided by giveaways that would plunge the city into a sea of red ink.

The process that led to San Francisco's successful America's Cup bid will always be somewhat opaque. As with the Port staff, calls to the mayor's office were not returned. All but one of the city's key negotiators declined interview requests, as did Stephen Barclay, the lead Cup negotiator. Per an assistant, he is "unavailable," as he is "taking a long overdue break in New Zealand."

Any deal, however, needed the board's approval before becoming the city's official bid. Supervisors and others in government recounted a particularly intense lobbying campaign to advance the central waterfront plan following the introduction of the nonbinding "term sheet" on Oct. 5. Essentially sight unseen, that agreement received nine votes — only Daly and Avalos dissented — and six cosponsors. Sean Elsbernd, a solid mayoral ally, refused to sponsor the measure as he had not read it; the same cannot be said for all of his colleagues.

Calculating the short-term and long-term costs of ceding vast swaths of Port land to the Event Authority for generations takes time. Working under a Cup-imposed Dec. 31 deadline, time was the one luxury the city did not have. With the financial implications of the central waterfront plan still undetermined, Mirkarimi claims in early November, "the mayor's office demanded we solidify our vote. ... It would have been binding."

Reams of fiscal questions Daly had spouted ad nauseam had not been answered, and the budget analyst's report crunching the numbers was still in its gestation. "We were growing very uneasy about some of the terms and the half-baked answers coming out of the administration," says Mirkarimi, a Rhode Island native and sailing enthusiast who loaned early and emphatic support to the America's Cup bid. As a behind-the-scenes conduit between progressives and the mayor's office, Mirkarimi was a key player. But his enthusiasm was not unconditional: "There had been very little information of value. And the mayor's office was just pedal to the metal to get this thing done."

Mirkarimi called a November meeting with the mayor's office, the controller, budget analyst, and others, imploring that top-down arm-twisting for an America's Cup deal be shelved until the costs had been calculated. "Rarely has any project been asserted as intensely and vigorously as this," he recalls. "Pressure from the mayor's office was applied to as many supervisors as they possibly could."

Jennifer Matz, the head of the Mayor's Office of Economic and Workforce Development, didn't recall things quite that way. Asked whether the mayor's office had leaned on the supervisors, she noted that if the city failed to show "we were hitting milestones, we could lose this opportunity. I think the pressure to move the ball forward was pressure we were trying to externalize." Any pressure the supes were feeling to sign off on the Pier 50 deal was "the same pressure we were all feeling not to let this opportunity slip."

In the midst of this storm, however, Daly blithely remained on his preferred course as Public Enemy No. 1 of the America's Cup. After 10 years of Daly's antagonism, mayoral aides didn't bother to set foot in his office to cajole him into voting before the numbers had been crunched. "One of the few good things about being me on the Board of Supervisors," he says, "was the other side didn't waste their fucking time on me."


A lot of would-be political observers make snap judgments about Daly because of his off-putting persona. There's the strident, doctrinaire partisanship; the coarse, profane behavior; the beard befitting a man who spent the night in a Denny's. But there's more to Daly than the expletive-laced highlight reel that graced his going-away roast. Even his bitterest opponents concede that he's exceedingly bright and competent. He has to be. You can't treat people the way he does and get by on charm.

Aside from a contrarian nature — and a chance to antagonize Newsom — there were obvious reasons Daly would object to the early America's Cup deals. The former budget committee chairman has a history of penny-pinching you would expect to see touted on the campaign fliers of a God-fearing conservative Republican. He rewrote the city's administrative codes to forbid departments from producing and mailing holiday cards using public funds. (This occurred "after I got all these fucking Christmas cards," he recalls.) Expensive, novella-sized year-end reports must now be sent only electronically ("No one would read this shit. At least, I wouldn't."). Thanks to Daly, police officers who work overtime are no longer contract-bound to be fed on the city dime.

As a pillar of the pro-labor progressive establishment, however, Daly's parsimony extends only so far. Funds he snatches from elements of the city he despises can then be redirected toward his pet causes. He likes saving money, "but I like spendin' it, too."

So it's not surprising Daly would be set off by a deal involving 75 years of rent-free development along the city's waterfront for a yachting billionaire, emphatically pushed by a mayor he loathed. Chest-thumping populism alone would earn few points for the lame-duck supervisor — though, by all means, it's a card he would play; how could he help himself?

Daly's most persuasive argument was a mathematical one. He roughly tabulated the figures fed to him by Port staff and the Mayor's Office of Economic and Workforce Development, and found they didn't add up well for the city. "I'm not a big fan of Larry Ellison," he says of the contentious billionaire, whose Oracle Racing team is housed at the Golden Gate Yacht Club. "I think the sporting event is hoity-toity and really just for the elite. But, that said, the real reason why I opposed the San Francisco bid is that we took a bath on it. The Port staff basically agreed with me, even though they weren't allowed to say it."

On the day the America's Cup term sheet was introduced to the board, Daly toted a sheet of paper scrawled with pressing questions. How much would it cost to demolish Port facilities on Pier 50? To relocate the tenants? To relocate Port operations? Could the Port afford this? Could the city? How much would be drained out of the city's general fund — now and in the far future?

Only the most ardent City Hall watchers took in Daly's litany of questions or witnessed him rework his Excel spreadsheet as answers came in real time (or didn't). You may, however, have read in the press that Daly carried on for so long that his colleagues evoked the rare "10-minute rule" — the legislative equivalent of being gonged. Rather than a focus on his barrage of economic questions, the epitome of the meeting was Daly's despotic pledge to use environmental lawsuits to "bring a white squall to make sure those boats never see the water."

Therein lies the paradox of Chris Daly. He chided the media after receiving a cavalcade of calls last year following his loony pledge to utter the word "fuck" at every Board of Supervisors meeting: "Maybe I can parlay some of the intrigue around this ... and start getting some attention for important issues, like environmental racism. Maybe I can start calling it 'fucking environmental racism.'" And yet unhinged behavior can do only so much to push important issues. Railing against the America's Cup, he came off as a megalomaniacal spoilsport; it was not difficult for the mayor's spokesman to regurgitate his millionth variation of "That's just Daly being Daly."

Daly had just one saving grace: He was right.

"He raised the questions that couldn't be brushed aside," Avalos says. Campos adds, "He was right about the original agreement and what it meant for the city. I think that what happened, to some extent, is that the message got lost because of the messenger."

It was easy to dismiss Chris Daly. But, in this case, you couldn't dismiss what he stood for.


For Daly — and anyone else hoping to deep-six the America's Cup — the budget analyst report's publishing date was anticipated like Christmas. When it arrived in mid-November, it did not disappoint.

Giving away Pier 50, the lynchpin of the central waterfront plan, was revealed to be a costly albatross around the city's neck. The pier houses a number of maritime-use tenants — including the Port's own maintenance yard. Relocating these tenants and demolishing Port facilities would cost a fortune.

All told, the budget analyst claimed the "term sheet" agreement would lose San Francisco up to $56.5 million upfront and perhaps $143 million overall in the long term. The central waterfront Host City Agreement derived from the term sheet would have been similarly costly in the short term, and could have lost the city $101 million when all was said and done.

Costs would have been exorbitant for the Event Authority as well — the aforementioned $150 million in infrastructure improvements were needed. On top of the 66-to-75-year rent-free development deals for the Ellison-controlled group — sole-sourced without competitive bidding — much, if not all, of these costs would have been reimbursed by the city.

In short, fence-sitting supervisors were not amused. The report "had a lot to do with people moving away from the original deal," Campos says. "It became so obvious the giveaway of Pier 50 was something that went beyond what would be a reasonable deal to get the America's Cup here. ... We needed that report. We needed it."

While the mayor's office pooh-poohed the budget analyst's findings, it was clear that the central waterfront plan, which had been taking on water, was now sunk — its critics included entities nearer and dearer to the mayor than Daly. Around this time, reports surfaced that the San Francisco Giants were lobbying Newsom regarding giveaways to Ellison. While Pier 48, across McCovey Cove from the ballpark, and Seawall Lot 337 within Parking Lot A were being offered to the Event Authority, the team indignantly stated that it was leasing those properties and had an exclusive negotiating agreement regarding them (the team's hope to further develop the area is no secret). Daly notes that he and Giants president Larry Baer — "we're not the closest of political allies" — had been in contact. "The Giants were not rolling over for the Newsom administration," Daly says.

The short-timer supe's financial concerns had gained traction with his colleagues. When that spark alighted upon the smoldering kegs of the peeved Giants and the dissatisfied Port — well, that's how you blow up a deal. And that's all Daly ever hoped to do.

Daly "was an extraordinarily strong force," Matz from the mayor's office notes. "His asking questions gave other folks the comfort to say, 'I've got questions, too.'" Not surprisingly, she feels the move to the northern waterfront would have happened regardless. But Daly helped the deal get better — while he labored to kill the America's Cup, he instead made it stronger. "I think," Matz says, "he may have unwittingly helped the city."

That's because Daly did not realize until fairly late in the process that San Francisco had wiggle room, and could potentially finagle a superior deal; early on, he took a Manichean view on the America's Cup and saw negotiations on the central waterfront as all-or-nothing. Wielding the budget analyst's report like a cudgel, Daly served as a destructive force. It was left to others with the board, Port, and mayor's office to act as creative forces, pick up the pieces, and make something new.

After getting a gander at the budget analyst's report, David Chiu wrote to the Mayor's Office of Economic and Workforce Development and Port, requesting that someone look into moving the Cup to the northern waterfront. "When I was initially briefed on the America's Cup and told about the first proposal involving the central and southern piers, I asked how come they weren't considering some of the waterfront properties in my district," he recalls.

The Event Authority's fixation on Pier 50 remains unexplained — and has spurred much behind-the-scenes talk of quashed Ellison plans for waterfront development on the massive 20-acre site. But, there was a reason the northern waterfront was initially off the table. The city had been operating under the assumption that the Cup would be held using traditional single-hulled boats, which would have required the construction of breakwaters — barriers that better shelter a harbor. With long-term hopes to convert Pier 27 on the northern waterfront into a cruise ship terminal, breakwaters were out of the question. But when it came to light that the race would be held with twin-hulled catamarans — which are stable enough that breakwaters are unneeded — Pier 27 was in play again.

Moving at an extraordinarily rapid pace for municipal government — and light speed for waterfront development — the Northern Waterfront Alternative became San Francisco's official bid for the Cup. It did so despite a snippy letter from Barclay, the Cup's negotiator, stating that the hastily assembled plan was "not acceptable." He further threatened that if the city went ahead with the plan rather than give away Pier 50, "San Francisco will not win the right to host the 34th America's Cup."

The city, of course, did move ahead with the plan, spurring a three-week America's Cup dalliance with Newport, R.I. Whether this was a serious attempt to move the Cup elsewhere or simple leveraging, on the last day of 2010San Francisco did indeed win the right to host the Cup.

Now the city must figure out exactly what it won.


Keeping Gavin Newsom from clambering into the spotlight is like restraining a dog when a steak hits the ground. Mayor Ed Lee didn't bother to try. With Newsom turning heads by standing at the back of the late January waterfront press conference at Pier 27, Lee invited him up on the podium. The lieutenant governor prefaced his remarks by stating he had nothing to say. He then said the most interesting thing anyone would utter all day. Regarding the America's Cup agreement, he said, "We made a lot of promises. A lot of them have been reported. Candidly, a lot of them have not."

Indeed, if the devil is in the details, he has room to luxuriate in San Francisco's Host City Agreement. Between its official submission in mid-December and the announcement of San Francisco's victory on the 31st, much negotiation took place between the mayor's office and race organizers — even after the signatures had been affixed to the document. A glance at the contract reveals that a full 16 pages have been "redlined" — that is, crossed out and replaced with new terms. The city's official bean-counters have had no chance to examine what we're on the hook for.

They will, Mirkarimi promises. He tells SF Weekly to expect "a string of budget analyst's reports." The "massaging of the deal after the mayor and board signed off still needs proper vetting and watchdogging" — and not just a "pep rally." Some manner of white squall may yet be brought upon the Cup. But not by Daly.

Watchdogging the city's books isn't in the cards. Daly now has other books to balance: his own. A pair of lily-white catamarans tear through the sea on the television perched over Daly's shoulder as he flips through time cards, quizzing an employee at his new bar in English and Spanish. Daly, to restate the painfully obvious, is hardly a yachting aficionado. But, serendipitously, a replay of the America's Cup bid-winning press conference is now screening for Daly, this reporter, and the one patron in the Buck Tavern at 4 p.m. on a recent Monday.

The city, Daly notes, "may have entered into a shitty deal anyway." But the prior plan "was a shittier deal. A much shittier deal."

With Daly relegated to pouring drinks, the board will, by default, be a more harmonious place. But whether congeniality is enough to put the kibosh on a bad deal riding on greased skids remains to be seen.

"There is," Daly says, "a utility in having someone who is not concerned about climbing the career ladder or what the Chronicle's editorial board thinks, or being invited to the mayor's house for some reception. If any of those things are your primary mover, you're not going to do what I did. I'm proud of being the designated asshole."

The former supe slowly swivels to watch the television just as Chiu, Newsom, and Ellison — his favorite people — walk down the City Hall steps toward the massive sailing trophy. "Oh, look," Daly says wearily. "It's the America's Cup."

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15 comments
kellog64
kellog64

A deal is a deal when it is done......kind of a stretch to credit Daly with anything in this context.

M Barcadero
M Barcadero

Joe's editor ripped off the "Captain Outrageous" title from the Sports Illustrated cover story about another America's Cup asshole, Ted Turner. But there is a difference between a mere asshole like Turner and and a douche-nozzle like Daley. He's referred to at our hangout as "The Nozz". He ought to keep that skipper's cap, however. Ahoy, Polloi

jorgenoe
jorgenoe

In short, San Francisco needed an asshole — and one with clout.

There seems to be no shortage.

Capn_jack
Capn_jack

The nonsense about the breakwaters is horseshit. That area had dozens of sailing ships a hundred years ago that were smaller than the Cup boats. People just pulled that out their asses to save face.

Matteo
Matteo

Any article that calls Chris Daly an "asshole" is OK with me!

marcos
marcos

Joe, this is a great article. I especially like the "Stolichnaya structures" line.

But this is of concern to me: "San Francisco regularly seals bad deals, and it could have done so again with the America's Cup — or made no deal, and lost the Cup."

If San Francisco regularly seals bad deals, then is that just a "dog bites man" story? I would assume so because SF Weekly seems to have ignored every other instance where Daly successfully went toe to toe with powerful interests, such as Rincon towers and Trinity Plaza, not to mention the countless other instances where city finances are pilfered by the already wealthy.

The piling on Daly for negotiating these deals with his constituents' best interests put first was universal. That politicians rarely do this should be front page news every day.

Will this piece and Matt Smith's passable piece on mayoral succession indicate now that Daly is termed out and the David Chiu/Willie Brown/Rose Pak nexus has decapitated progressives, that journalists feel safe to put the progressive case in a positive light? Might SFWeekly will do what the Guardian has not been able to, critically cover the machinations behind city politics that drain public resources so the wildly rich can have a good time, leaving the rest of us to hold the deteriorating bag?

-marc

Kimball Livingston
Kimball Livingston

You were doing fine until you got almost to the bottom, then turned to sweeping assumptions:

"The city, Daly notes, "may have entered into a shitty deal anyway." But the prior plan "was a shittier deal. A much shittier deal."

With Daly relegated to pouring drinks, the board will, by default, be a more harmonious place. But whether congeniality is enough to put the kibosh on a bad deal riding on greased skids remains to be seen.

Kinda jumped the rails here, eh?

phil
phil

Great article. Why am I not surprised that I'm reading this in the SFWeekly instead of the Chronicle or SFBG?

PatMonk
PatMonk

@Chris. Thanks for all you've done, and will continue to do.@Joe. Thanks for the addition to my vocabulary, "Manichean".Go Giants !

yahoo-EZ74DSBFLYRWI337PWLM7WX4ME
yahoo-EZ74DSBFLYRWI337PWLM7WX4ME

There is so much unknown about how the piers with be developed for the Cup and redeveloped afterwards that it's impossible to know if either deal is good or bad for San Francisco. Everybody is focusing on the potential $1.4B brought to the city by 2013; nobody is commenting on what happens to this prime real estate and its fiscal effects through 2085.

David Elliott Lewis
David Elliott Lewis

Like with many of Chris Daly's accomplishments, their true values can only be appreciated later on over time.

h. brown
h. brown

Joe,

Great piece. Once again the Weekly scoops the Guardian in Bruce's own back yard.

See you at Daly's Dive for Giants' games?

h.

sf citizen
sf citizen

Good first step, Sounds good that what is in writing is a better deal for SF - but one has to worry that it will actually be enforced by SF at the end of the day.

jamiewhitaker
jamiewhitaker

I am so happy that wise ass Tony Winnicker is no longer the Mayor's spokesman. Good riddance!

 

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