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America's Comp: The Latest Financials for the America's Cup Portend Badly for the City 

Wednesday, Sep 4 2013
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Onne van der Wal gyrates like a hula-hooper on the deck of a powerboat ripping through San Francisco Bay at a clip exceeding the speed limit on the Bay Bridge above. The South African-raised nautical photographer has the weathered features and sun-bleached hair of a man who's spent his life on a skiff, and the sea legs to prove it. Van der Wal deftly stoops and snaps open a case in which an array of oversize cameras is arranged, neatly, like dueling pistols. He selects one resembling a horn of plenty and peers over the bay.

Van der Wal and several accompanying photographers have already snapped countless shots of nearby sailboats in rapid-fire, staccato bursts. But he's hunting for bigger game. And, on the horizon, it beckons. The monolithic silhouette of a towering America's Cup AC72 catamaran thrusts out of the distant water like a whale's plume. There's shouting, gesticulating, and driver Blaine Pedlow executes a jarring 180-degree turn. For a fleeting moment San Francisco's serenely beautiful waterfront actually appears overhead as the boat lifts onto one side.

Pedlow yanks the throttle, the engines obligingly roar, and the nose lifts high out of the water. It's a sequence painfully reminiscent of the Rodney Dangerfield yachting scene in Caddyshack; painful because your humble narrator is tossed around the cabin like a penny in a dryer.

Pedlow pulls as close to Team Oracle USA's hulking craft as he can get "without them yelling at us." Tiny, helmeted figures resembling spacemen scurry about the catamaran; it rises up out of the water on its foils and appears poised to blast off. Van der Wal is in a far-away place. "Beautiful!" he shouts over the din. "Perfect!"

The latter is an adjective that hasn't found its way into many descriptions of the America's Cup. The enterprise has descended into farce as steadily and predictably as an AC72 is unsteady and unpredictable. A small fraction of the promised number of fans has shown up to observe a small fraction of the promised number of boats. What they've seen has diluted the definition of the term "racing," with vessels competing sans competition or engaged in one-sided contests marred by chronic mechanical failures. Along the way, a sailor drowned when his boat disintegrated in routine conditions and "hometown favorite" Oracle was nailed in a cheating scandal.

The promise of a windfall on water has itself taken on water. Instead, with the event finals scheduled to commence Saturday, San Francisco officials are now told that, despite the paltry efforts of private fundraisers endeavoring to offset city costs, public investment in a billionaire's yacht race will be replenished by visitor-generated tax revenues.

Analysis of the latest financial figures released by the city, however, reveals this is likely just one more big-fish story.

Queried, repeatedly, about their dubious progress, America's Cup fundraisers have assured everyone of their inevitable success in the face of plainly observable reality. Asked, repeatedly, about the unwatchable nature of the on-the-water competition, event organizers have said, in effect, You ain't seen nothing yet: Things are gonna be amazing — eventually.

It's as if Waiting for Godot found itself pervaded by Herbert Hoover's notion that "prosperity is just around the corner." That doesn't sound like particularly entertaining fare, but, if you're a San Franciscan, you've already bought tickets.

The most recent numbers from the city controller — a snapshot in time from the close of the fiscal year on June 30 — reveal San Francisco expended $13.4 million toward the race, but received back only $8.4 million from the America's Cup Organizing Committee fundraisers. A $5 million shortfall is a rough place to start, but things grow worse upon further analysis. Racing (inasmuch as we can call it racing) commenced in July — meaning the city's financial burden likely ramped up, leaving the already-deep-in-the-hole fundraisers in the distance like Emirates Team New Zealand did to Luna Rossa.

Even worse: Of the $8.4 million delivered to the city as of June 30 by the fundraisers, $5 million was a loan from the race's organizers. Three-quarters of future dough received via corporate pledges will be sent, first off, to the organizers to pay off this loan, with only one-quarter left for San Francisco — which is already in the hole and still digging on behalf of the America's Cup.

Considering this dismal state of affairs, it's no surprise event organizers and cheerleaders hand out blithe assurances that the rising tide of increased tax revenue will raise all boats. It'd be less irksome if this worked out mathematically. It doesn't.

Relying on a spike in hotel taxes is a dubious proposition. From 2010 to 2012, the months of July to September averaged 90 percent room occupancy. The most recent available average daily rate is $227. Since the Transient Occupancy Tax takes a 14 percent slice of the rate, that's about $32 a room going to the city.

So, for every $1 million the city is forced to eat in America's Cup costs, it'd have to fill an additional 31,466 hotel rooms. That's tough to do when you're already at 90 percent capacity. It's even tougher when there are only 33,596 rooms in the city, total.

Back on the boat with van der Wal, documentary filmmakers are taking shots of the photographer taking shots. Your humble narrator takes a shot of a man taking a shot of a man taking a shot. Extolling the merits of his bazooka-sized lens, van der Wal describes it as "bloody perfect." The filmmaker muffs the recording, and van der Wal says it again.

"Bloody perfect" nicely encapsulates van der Wal's day at sea. He captured countless amazing shots of equally amazing boats and, two days later, was back home in Rhode Island and on to new adventures.

San Francisco officials, however, are mandated to stick around and find a way to pay for all this. And, if Ellison's team wins — as is widely anticipated — perhaps we'll get to do it all again.

SF Weekly is grateful to Lowepro for providing the boat trip with Onne van der Wal.

About The Author

Joe Eskenazi

Joe Eskenazi

Bio:
Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" is a staff writer and columnist for SF Weekly, which he has written for since 2007. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers... more

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