The group charged with ensuring that San Francisco taxpayers aren’t hung out to dry on costs for the America’s Cup needs to do “significant additional fundraising,” according to a memo released Monday by the Controller’s Office.
The America’s Cup Organizing Committee — the nonprofit in charge of raising $32 million for the series of yacht races coming to The City over the next two years — has cobbled together only $800,000 in hard cash of the $12 million it had aimed to raise by last week. To cover the rest, the group has gathered commitments from wealthy donors and a separate wing of the event.
So far, the main contributor to the America’s Cup is the America’s Cup itself, namely the business arm of the race, the America’s Cup Event Authority, which has pledged $8 million toward the fundraising goal.
Kyri McClellan, CEO of the Organizing Committee, said the nonprofit struck a “revenue-sharing” pact with the Event Authority after selling rights to solicit donations from big local companies in order to avoid cannibalizing advertising and sponsorship deals.
The Controller’s Office memo says the funds will allow the nonprofit to cover $8 million of The City’s planning expenses that are due in June, but that fundraising should be stepped up to ensure full payment of San Francisco’s long-term costs.
“Given the ACOC’s expenses and fundraising payout schedules, significant additional fundraising beyond those achieved to date will be required,” the memo states.
McClellan said the nonprofit will rely less on the Event Authority for funding in the future. The nonprofit is on the hook to raise $20 million more over the next two years to help cover the race’s total $300 million cost.
“There is definitely more heavy lifting to be done, but we think we’re well-positioned to do that,” McClellan said, adding that she doesn’t see the memo as an indication that the nonprofit should refine its strategy. “I guess I don’t read it that way.”
Supervisor John Avalos said The City is entitled to the funds, as laid out in the original 2010 deal between race planners and Mayor Gavin Newsom’s office. A big selling point at the time was that the America’s Cup would create jobs and an economic boon at no cost to San Francisco.
“I think there is a need to more aggressively raise funds,” Avalos said. “I think they feel the pressure, and with that pressure, I hope they accomplish the goal.”
The Board of Supervisors is set to discuss more this month about the financial aspects of the race, including a complex agreement that lays out the terms of long-term development rights to City-owned waterfront property that will be retained by race officials in exchange for financing long-sought improvements to dilapidated piers.
$300 million total
$32 million cost to The City
$12 million deadline this year for nonprofit fundraisers
$20 million in fundraising over the next two years
Schmidt Family Foundation (Wendy and Eric Schmidt)
Hellman Family Foundation (Warren Hellman)
John and Marsha Goldman
Source: America’s Cup Organizing Committee