San Francisco raising the bar for America's Cup

December 13, 2010 7:06:15 PM PST
The San Francisco Board of Supervisors is trying to close the deal on getting the America's Cup yacht race as soon as Tuesday.

And, if the city does get it, the race could be a very different affair. Some radical changes might be coming to the America's Cup.

Paul Cayard is the CEO of Artemis Racing, a team from Sweden that will be one of the challengers for the America's Cup. If you have never heard of Cayard, you are the reason Larry Ellison, Cayard, and the race organizers want to change the game.

20 years ago, Cayard was racing an Italian boat in the Maxi World Championships off Saint Thomas. He won that regatta and since then, he has won seven world championships, competed in six America's Cups and two Olympic games, was named Yachtsman of the Year, and was elected to sailing's hall of fame.

He was also the first American to ever win the grueling Whitbread 'Round the World Race. The trophy is hanging in the lobby of San Francisco's Saint Francis Yacht Club, where Cayard recently gave ABC7 a tour around the club.

He is a San Francisco native, born and raised, and yet very few outside the sailing would recognize this sailing rock star even in his hometown because the vast majority of Americans have no interest in yacht racing.

"Let's just throw a number out there. Let's say it's three percent of the public, is interested in sailing as we know it today," he said.

That is not nearly enough to generate the kind of interest and television revenue that race organizers have in mind for the next America's Cup.

"We want to make sailing something that somebody who doesn't know anything about sailing would be excited to watch," he said.

One animation supplied by the America's Cup organizers shows that they are betting on 72-foot catamarans capable of speeds in excess of 50 miles an hour.

"Rocketing up to the weather mark and turning around and rocketing back," Cayard describes.

Oracle CEO Larry Ellison's team won the last cup. It is his right to set the terms for the next race and he is talking in terms of a television spectacular.

"You've got cameras on the boats, cameras in helicopters, microphones on the boats," Ellison described.

The pitch seems pretty close to what you would expect from NASCAR.

"You know, these people sailing these boats are going to have to have to have a helmet on. I mean, this stuff is going to be pretty dangerous. The boats going 50 miles an hour, so if the boat tips over, or God forbid, if there's a crash, there's going to be bodies flying around," Cayard said.

Cayard says the boats will be a game-changer, at least that is the bet, and there are hundreds of millions of dollars in the pot.

"If they can get us the land, the teams can build their own bases, so the key thing is just get us the land," Ellison says.

Ellison wants San Francisco Bay-front property, specifically Pier 30-32, just south of the Bay bridge and Pier 50 south of the Giants ball park, about 35 acres in all. He has offered $150 million in improvements to shore up the piers if the city will give him free use of the city-owned property for as long as 75 years.

"If they're going to give the people of San Francisco $150 million in waterfront improvements, they need to get the opportunity to recoup that investment," Kyri McClellan says.

McClellan is the America's Cup project coordinator for the city of San Francisco. She says the city is on board with negotiating a land for improvements deal. The sticking point is about $36 million to dredge around the piers, make improvements and relocate existing tenants.

"And, that's a cost that really having an understanding of that has spurred us to look at an alternative," she says.

The alternative plan, which the city's budget, finance committee and the mayor favor, would use piers closer to Fishermen's Wharf. Ellison's team would get development rights, a 66-year lease on Pier 30-32, a 75-year lease, and possibly title to Seawall 330 across the Embarcadero at the foot of Bryant Street.

The team would be required to pay commercially-reasonable rent with credit for improvements. The mayor's office of economic and workforce development projects a benefit to the city of $13.1 million with long-range development tax revenues of $31 million. Still, there would be about $20 million in direct costs to the city in extra police and other costs of hosting the event. The project coordinator says out-of-pocket will be covered.

"And, we have come up with a mechanism with the America's Cup organizing committee to have them privately raise up to $32 million to cover those expenses," McClellan says.

The projected economic benefit is about $1.2 to $1.4 billion, but that would go to hotels, restaurants, and housing for the crew members and their families. The key is the interest level. If they can change the game enough to raise public interest from 2 or 3 percent to say 15 percent, it will be a big success.

Cayard and Ellison believe the new boats are their best shot.


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