A political skirmish has broken out over The City’s costs from the America’s Cup following the emergence this week of new projections regarding fundraising and economic benefits.
Private fundraising was supposed to cover The City’s costs of hosting the regatta, but the money from private donors is still short of the goal. That makes it appear likely that San Francisco will have to cover at least part of the tab.
The race finals, scheduled to be held during the first three weeks of September, are now expected to cost The City just over $22 million, down from a projected $32 million. As it stands now, The City would have to pony up an amount estimated to be in the low tens of millions of dollars to cover its expenses.
But that line of thinking did not sit well with Supervisor John Avalos, who complained that the costs of the event now threaten to vastly diminish The City’s direct financial benefits.
“I think it is important to talk about the original intent,” Avalos said at a budget committee hearing Wednesday about the event.
In a subsequent interview, he said diverting money from The City’s benefits was not part of the agreement.
But Supervisor Mark Farrell, who chairs the budget committee, said such costs would be more than justified by the larger benefits to The City of hosting the event.
He said donations, tax revenues and other event-related income are all fair game in helping to offset San Francisco’s cost. After all, he noted in an interview, The City would have generated none of those benefits without hosting the event.
New financial projections of the expected economic benefits to The City and region were also unveiled Wednesday.
In 2010, a report projected that the event could bring in up to $1.4 billion to The City.
That number now sits at $901 million for The City, which is higher than the $780 million figure used by Mayor Ed Lee on Tuesday. Bay Area-wide, the benefits are projected to be $978 million.
Stephen Barclay, CEO of the America’s Cup Event Authority, said the economic impact numbers are only for the September racing events, and neither includes a four-day youth racing event in September nor a concert series at a new pavilion on the waterfront.