Loose lips sink ships.
That was the lesson city leaders said should be learned from the sudden breakdown of a massive real estate deal tied to the America’s Cup yacht race.
The America’s Cup Event Authority was set to put up long-sought money to fix problematic piers in exchange for lucrative long-term waterfront development rights, but Mayor Ed Lee and race officials announced Monday that the agreement would be greatly “consolidated” to as little as one-tenth of the original scope.
At a Chamber of Commerce event on Tuesday morning, Lee suggested that information about such deals should be treated with greater sensitivity in the future.
“Discussions about people’s private investments — and how we get a return on that — are private ones,” Lee told the crowd.
In the weeks leading up to Monday’s announcement, the Port of San Francisco and race officials had laid out the terms of the development, but when the proposal was presented to the Board of Supervisors, it was met with skepticism and mounting requests for complex changes. After two exhaustive Budget and Finance Committee hearings, America’s Cup Chief Operating Officer Stephen Barclay told the S.F. Examiner that he wasn’t willing “to go any further” on changes to the deal.
Supervisor Mark Farrell chided the Board of Supervisors Tuesday for the loss of “a golden opportunity” in exchange for a potential legacy of rotting piers, along with a $2.2 billion backlog in Port infrastructure improvements.
Farrell called for a hearing on the Port’s finances and lamented the “hundreds and hundreds of building trade jobs” that will likely be absent from a revised deal, “all because we say we stood up to the America’s Cup.” He said while protecting public assets and city budgets are important, San Francisco needs to also cater to private investors “as partners” for job growth.
Supervisor John Avalos, who sought to change aspects of the deal during the committee hearings, said the revised plan likely would have passed muster with the board on Tuesday. Although The City and the Event Authority aren’t saying publicly which side nixed the long-term development aspect, sources close to the matter say billionaire Oracle CEO Larry Ellison — whose racing team is defending the America’s Cup — first decided to pull out.
“It’s a little premature to be saying The City squandered anything,” Avalos said, adding that it appeared race officials saw the $111 million investment as “too much” to undertake.