San Francisco has an unprecedented opportunity in hosting the 34th America’s Cup.
The America’s Cup is the third largest sporting competition in the world – behind only the Olympics and the World Cup. In total, the series of sailing races is expected to generate $1.4 billion in economic activity – three times the estimated impact of the Super Bowl. A recent analysis from Beacon Economics estimates that the city can create 8,840 jobs and generate more than $13 million in tax revenue if it is successful in becoming the seventh city to host the world-class regatta.
Recently, much attention has been given to the costs associated with hosting the America’s Cup. Last month, the city’s Budget and Legislative Analyst released a report estimating $128 million in costs to the city and county for staging the races. The Port Commission discussed the term sheet earlier this week. The Board of Supervisors Budget and Finance Committee is scheduled to weigh-in on the proposal – as well as a new alternative proposal – as early as next week.
A central point of the debate involves the long-term development rights that would be granted to an Event Authority in return for the $40 – $60 million that would be needed to rehabilitate selected piers to deliver the event facilities. Critics argue that the city is “giving away” assets during a time of economic hardship. Much like the deal to develop AT&T park, the Chamber sees an opportunity to engage private capital to renovate port property that would otherwise remain neglected for years to come.
It is true, San Francisco will have to spend city funds to host the America’s Cup. But the costs associated with hosting the races must be considered against the $1.4 billion of economic activity that will result in the private sector from hosting the event – an analysis missing from the Budget Analyst’s report.
Many businesses, residents and surrounding communities stand to benefit from the American’s Cup. Building and construction companies will immediately begin developing the event facilities. Once the races are underway, hotels, restaurants and retail outlets will accommodate thousands of visitors and spectators for each regatta. Even after the culminating event is over in 2013, the city’s convention and tourism industries will benefit from the extensive global media exposure generated during the competition.
From a business perspective, spending $128 million to earn $1.4 billion is a worthwhile investment. Even using the most conservative estimates, investing in the America’s Cup will deliver significant net economic benefit to San Francisco and the Bay Area. This is an investment our city cannot afford not to make.