But, minus a Cup championship and Auckland regatta, all of these gains don't amount to 36 million New Zealand dollars worth of fun. Thanks to its heavy investment in Emirates Team New Zealand, choking away the Cup in the greatest of all sporting letdowns won't just break New Zealand's heart.

It'll also break its bank.

After the last Kiwi floats out of town on a river of Steinlager, the denouement for those left to deal with the aftermath of the America's Cup will be that it could have been so much worse. The thrilling on-the-water action obscured murky land deals and the tenuous city benefits of playing gracious host.

Early iterations of the deal pushed by Newsom involved ceding vast swaths of the central or northern waterfronts to Ellison-controlled entities at a nine-figure loss to the city. An examination of the fine print of a subsequent proposed $136 million pact indicated the city could have been reimbursing Ellison-controlled companies for development undertaken on land, ceded rent-free, into the 22nd century.

Now-Lt. Gov. Gavin Newsom did not return calls or e-mails. SF Weekly has learned, however, that even in casual settings among friends, he steadfastly insists the America's Cup has been an unbridled success.

Internal Port of San Francisco e-mails SF Weekly obtained last year revealed existential angst over the proposed Pier 27 cruise ship terminal, a project conjoined with the America's Cup. The terminal's hefty price tag prevented it from being constructed years ago — and, including state-imposed environmental mitigation costs, its budget doubled between 2009 and 2012. "Frankly, the cruise ship terminal isn't worth the risk," Port director Monique Moyer wrote to her staff in January of last year. "Sorry to be the 'Debbie Downer' on this, but I spent a sleepless night and I came to the conclusion that I can't be the one who does this to the Port."

Later that month, ground was broken on the terminal. Resembling a lecture hall on a mid-century Cal State campus, it is now complete. City officials portray this and other capital projects as a long-term benefit of the Cup. But, in May, Port officials admitted the terminal may yet lose the city $611,000 a year.

On the cusp of a February 2012 Board of Supervisors vote to greenlight that potential $136 million pact, Team Ellison abruptly pulled the plug on the contentious real-estate scheme. This came "out of the blue sky," per city officials, and was not negotiated; Cup organizers at the time were faced with nonexistent sponsorship income and the huge cost of developing groundbreaking TV technology — plus, actually paying a network to televise sailing, rather than vice-versa. Half of the America's Cup Event Authority's employees were subsequently liquidated.

Members of the Board of Supervisors now tell SF Weekly that vote was in doubt — they were wary of giving away land to Ellison. This is not how City Hall operators pushing the deal recall things: "That's bullshit," states one intimately involved player. "We had the votes."

So, but for the unilateral action of Team Ellison, the city would be in hock for up to 101 years in exchange for the uncertain returns from a few weeks of boat racing. As Cup backers portray the event as an overall success in the coming weeks — it generated a fraction of the promised money and jobs, but surely generated some — it's worth keeping this in mind. "It's great the city hosted something like this. But the totality of what it took to get this?" queries a San Francisco official with deep ties to the event. "It's breathtaking. It's so uneven. It's so disproportionate. All of that — delivered this."

Even the pared-down America's Cup has been a fiscal dirge. Private fundraisers tasked to "endeavor" to offset city costs struggled mightily convincing donors to underwrite Larry Ellison's boat race. The private America's Cup Organizing Committee claims to have amassed more than $16 million — but city costs figure to be millions higher than that. Visitor-generated taxes originally pitched as padding San Francisco's bottom line have been repurposed into offsetting paltry fundraising efforts.

That meager fundraising, meanwhile, led Mayor Ed Lee to step in and start asking for favors. He got them.

It's a dicey situation when private companies or individuals, perhaps with business before the city, can contribute unlimited amounts of cash to politically preferred causes. In June, a company called Kilroy Realty gave $500,000 at Lee's behest to the America's Cup Organizing Committee — a sum dwarfing other donations. In August, the Planning Commission approved Kilroy's request to alter its already-approved plans for a highrise at 350 Mission by adding six additional stories — vastly augmenting the value of the future structure.

Department officials and development-watchers claim a mid-process modification of this magnitude — and the expediency with which it was granted — are unprecedented.

Along Fisherman's Wharf, tour-boat operators wheedle passersby to hop on and behold the America's Cup finals. When asked how the regatta has treated them, their smiles evaporate. "Lousy," says one. "Just awful," adds another. "A fucking terrible experience," spits out a third. Nearby, the ubiquitous bushman plies his trade: scaring the bejesus out of tourists by shouting from behind the foliage he carries with him. In his estimation, "There ain't as many people here as there should be." But, on the plus side, Kiwis he's terrified "take it real good."

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10 comments
Buylo
Buylo

Events such as these has become a huge marketing opportunity for all companies alike, from big brand names to online shops. It definitely has its perks and cons though. At least the sport is growing, which is always good

szcondon1
szcondon1

Cheers to Oracle Team USA and their outrageous prowess and comeback to win the America's Cup. No sense crying over spilled almond milk. What's done is done. Monies lost or earned, this was a great sporting event. I attended almost all of the LV Cup, Red Bull Jrs. AC, and the AC races from both the Marina Green and AC Pavilion venues. I had a blast and enjoyed spending money for overpriced champagne and Oracle clothing. I even scored three bleacher seats from Andy, one of the sportscasters, for being interviewed on AC TV. I took friends and family there. I'd do it again in a heartbeat even knowing this information presented in your article. SF is a great city, a top travel destination in the world according to Condé Nast Magazine. We will recover. Now that we know some of the errors made by our left-leaning politicians, we can hopefully correct those errors. Hip-Hip-Hooray to Oracle Team USA!

Bigg Shelf
Bigg Shelf

I cant stand a cheat or a thief...they have NO integrity.....teach your kids that. Team Oracle

Natalie Jarman
Natalie Jarman

Ok, even as a San Francisco native born and bred, I personally was rooting for the Kiwis. The shyster evil Ellison antics all play out like a telenovella or Shakespeare play,despicable and embarrassing, greed ridden in a city that presumably was all about the independent spirit and frightfully has bought into nothing but complete corporate saturation. BUT in the end give the sailors credit, they did win even after penalized, a lot can be learned after this mad/sad experiment but let's celebrate for our city that this tragedy had actually turned around and become a moralistic tale that we all can learn from.

Dina Becerra
Dina Becerra

How does a team stay in the race, let alone win it if they were caught cheating? I know they were penalized two points but it seems weird for a sport to allow cheating.

aliasetc
aliasetc topcommenter

Fuck Larry Ellison scumbag cheating motherfucker

mblaircheney
mblaircheney topcommenter

Required reading for anyone with an interest in America's Cup.

I am an ardent supporter of the races on San Francisco Bay, I believe we are seeing history take shape before our very eyes... but Joe steadfastly shows an objectivity to the event and takes it apart piece by piece.

Surprisingly, his description of the mechanics of the sailboats on the water, are better than those who write as Cup cheerleaders. Without a doubt there is a keen understanding of the achievement... but... not allowing it to blind him to the overwhelming problems.

Others have questioned the event, no one has nailed it like this.

Normally I try to counter when I hear any negative thoughts on the races... Point taken.

aliasetc
aliasetc topcommenter

Great article, but Larry is still an asshole scumbag and Gavin Nosense is another asshole, and Ed Lee is an incompetent pimp trying to hustle the City.

A question, since most of the sailers on both boats are Kewis, could the races been fixed from the get go? Larry can buy off anyone no matter what the prie!

 
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