SAN FRANCISCO — Organizers of sailing's most prestigious event say they are dramatically scaling back plans to renovate San Francisco's dilapidated waterfront.
After weeks of increasing tensions between the Board of Supervisors and representatives of software mogul Larry Ellison over planning for next year's America's Cup, an agreement was reached over the weekend to scrap plans to turn two little-used piers near downtown into the event's publicly accessible "pit row" that would house racing teams challenging for the trophy.
Mayor Ed Lee made the announcement Monday during a news conference at San Francisco's Pier 80, where Ellison is building his space-age catamaran to defend the trophy he won in 2010 off the coast of Spain.
Ellison picked the San Francisco Bay as the location of the 34th race for the America's Cup, scheduled for September 2013. The plan was for Ellison's race team to spend $55 million on piers 30 and 32 in exchange for rent-free use of them for 66 years and title to a city-owned lot nearby.
Instead, all competitors will be housed at Pier 80, which Ellison has already spent a couple million dollars renovating. But the location is about two miles from the proposed "racing village" that is expected to serve as the event's hub. Pier 80 will still be open to the public, but organizers concede that it may require a bus ride instead of a walk from the racing village to visit.
Nonetheless, Lee and organizers insisted Monday that none of the 50 or so race days leading up to the final weekend of racing in September 2013 or the planned course around Alcatraz island in front of the city's skyline will change. The racing village planned at Piers 27-29 along the heart of the city's waterfront is continuing. The village will be converted into a cruise ship terminal after the America's Cup events.
Lee said the change was made after negotiators concluded they didn't have enough time to solve the financial, environmental and regulatory issues necessary to refurbish the piers in time for the challengers to move in and convert to their headquarters. Training runs can began on the Bay in July. The agreement was also criticized by some supervisors and others as too sweet of a deal for Ellison and the city budget analyst recommended San Francisco share some of the future revenues from the property.
The agreement apparently fell through on Sunday. The mayor's office had scheduled a tour and "round table discussion" of the piers Monday morning but called it off and hastily organized a news conference where the changes were announced.
"I don't think there was any one reason," Lee said, who called the 20 hours of negotiations over the weekend "a sobering discussion."
Now, the city's direct cost to host the event is expected to drop to around $10 million after new estimates are calculated.
So far, three teams have formally entered the competition. Lead Ellison negotiator Stephen Barclay said he expects a few more teams to sign up before the June 1 deadline.
Monday's announcement also postponed a final Board of Supervisors vote Tuesday on the financial agreement between the city and Ellison. No new date has been set for the board to consider a redrafted final agreement.
The new plan will have to be resubmitted to the board's three-member budget committee, which forwarded the original agreement to the full board last week after two marathon sessions. While approval was still expected, several supervisors expressed misgivings to put the final in doubt.
The original plan started to sink several weeks ago when San Francisco's budget estimated the direct cost of the entire deal to the city to be about $111 million, more than double initial projections. Fundraising efforts designed to defray that expense also got off to a slow start.
Finally, the anticipated number of boats in the race lineup has declined dramatically. Only three syndicates have signed up to challenge Ellison's team, though organizers expect more entries by the June 1 deadline.
Meanwhile, attendance and revenue projections were being debated among the Board of Supervisors as critics maintain the event won't draw millions of spectators and generate $1.4 billion to the local economy as anticipated.
Last week, former board president Aaron Peskin filed a lawsuit in San Francisco seeking to halt the project in the planning stages to conduct another lengthy environmental review. Peskin alleges the initial environmental report, which the planning commission and board of supervisors approved, was flawed.
On Monday, the mayor insisted the initial revenue projections remain in line and that Peskin's lawsuit had nothing to do with the scrapping of the two piers.
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