America’s Cup deal will be reviewed following report 

Agreeing to profit less isn’t technically the same as agreeing to pay more.

That might be one of the arguments made this week as city officials look more closely at the America’s Cup deal cut with yacht-racing enthusiast and tech mogul Larry Ellison during Mayor Gavin Newsom’s last days in office.

At issue is whether the deal to bring the international regatta to San Francisco changed substantially between the Dec. 14 version approved by the Board of Supervisors and the final version Newsom negotiated on Dec. 31 — and if it did, the deal might have to go back to the board for another vote.

Newsom argued that at the time he struck the final deal, it didn’t need further review by the board because it would not cost The City more money or have a “material impact.”

But on Thursday, a report by independent city budget analyst Harvey Rose listed a series of changes Rose said were indeed significant enough that they “could have a material impact on Port revenues and costs.”

But what constitutes a “material impact” is open to interpretation.

Deputy City Attorney Jesse Smith said the wording of the board’s version only limited the mayoral administration from negotiating to increase The City’s costs, but did not prohibit The City from agreeing to lower profits — though he declined to say that is what occurred.

Jennifer Matz, the head of the Mayor’s Office of Economic and Workforce Development, said the changes pointed out in Rose’s report don’t actually lower The City’s profits, they postpone decisions about those profits. For example, the final version deleted a provision that would have required the America’s Cup Event Authority to share some of its profits if it decides to build condominiums on the waterfront property it will inherit, but that doesn’t mean it can’t be required at a later date, she said.

“I vigorously dispute that we negotiated away The City’s upside. What we did was we agreed to take out certain language and held off decisions to a later date,” Matz said.

Both Board of Supervisors President David Chiu and Supervisor David Campos said the issue will be discussed at a Budget and Finance Committee hearing Wednesday.

Campos said if the board concludes that the Newsom administration indeed overstepped its bounds, the board might have to take another vote on the contract.

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