The America’s Cup yacht race is still coming to San Francisco, but a related $111 million deal to fix some of San Francisco’s rotting piers was cast adrift Monday.
The regatta’s event authority, led by billionaire and cup defender Larry Ellison, was set to rebuild the piers for a mix of lucrative development rights, long-term leases and outright ownership of waterfront property. But the heart of that agreement — the subject of exhaustive negotiations in recent weeks — was abruptly gutted after talks stalled over the weekend.
The authority will now focus mostly on building for the race itself at a price tag of just $10 million to $18 million, according to race officials and Mayor Ed Lee’s office. How The City repays that investment will be determined by a revised agreement set to be considered by the Board of Supervisors some time next month.
Although race officials and the Mayor’s Office were publicly cheery about the new terms Monday, sources close to the negotiations said Ellison nixed the agreement after complex regulatory approvals and requested changes became too onerous and threatened construction deadlines.
Piers 30-32, which were set to be the staging ground for racing teams, made up the vast majority of the former proposal. Revised plans call for teams to stage on The City’s southern waterfront at Pier 80, although the northern waterfront remains the site of the race course for events this summer, and again in September 2013.
Plans remain in place for the centerpiece of the race infrastructure — an America’s Cup Village at Piers 27-29.
Mayoral spokeswoman Christine Falvey said Ellison spoke with Lee by phone Monday to reaffirm his commitment to bring the race to San Francisco. An economic analysis conducted in 2010 says the event will create some 8,000 jobs and $1.4 billion in economic activity, although those figures have been questioned by skeptics.
Former Board of Supervisors President Aaron Peskin, a critic of the prior deal, filed a lawsuit last week over a separate environmental impact report for the race. Peskin said removal of most of the pier investment lessens what he described as a financial boondoggle that would keep The City on the hook for decades. But he said his lawsuit will proceed, at least until more is known about the updated deal.
“Finally, after 15 months, it would appear that The City is beginning to recognize that this is a far cry from the Olympics, and they shouldn’t hock San Francisco’s future into the dawn of the 22nd century,” Peskin said. He added that he’s interested in seeing whether Seawall Lot 330 — a site south of the Bay Bridge approved for luxury condominiums — remains part of the updated deal.
Gabe Metcalf, executive director of the San Francisco Planning and Research Association, called the breakdown of the investment deal “a real shame.”
“I don’t know if it had to be this way or not, but it’s very hard to find enough money to rehabilitate the piers,” Metcalf said.
$111 million invested by America’s Cup Event Authority in exchange for development rights, long-term leases and titles to waterfront property.
$10 million to $18 million invested by the authority in race infrastructure to be paid back by The City in a manner yet to be determined.