There are four teams that will race, instead of the projected 14. The economic benefit has essentially been cut in half. That's what we expected to hear at San Francisco City Hall on Wednesday, but it went beyond that.
City Supervisor John Avalos said organizers failed to pay prevailing wages for work done last summer.
"We made a commitment that we would have the highest standards possible for these types of programs and we didn't live up to them when it came to that happening last year," said Avalos.
Workers who put up bleachers on Marina Green are now owed $400,000 in back wages.
"The prevailing wage rate for a carpenter to install bleachers is about $64 an hour," said Donna Levitt of the city's Office of Labor Standards Enforcement. She told the budget committee the carpenters were paid about a third of what they were due.
America's Cup organizers countered by saying they voluntarily agreed to the prevailing wage requirement and the contractors have agreed to pay back wages.
"And so in the backdrop of that, I really do question the tone here. The tone of innuendo that we're trying to hide something, that we're not trying to do the right thing," said Stephen Barclay the CEO of the America's Cup Event Authority.
Small business owners and labor leaders stood in line to either back up the America's Cup as a boon to the city or criticize it for not hiring enough locals.
The CEO of the America's Cup Organizing Committee, Mark Buell, took exception to Avalos saying that the city had been played.
"The world economy collapsed," said Buell.
Buell said there just wasn't the money to field a bunch of challengers. So the expected revenue from the teams is down from $215 million to just $57 million.
Buell took on the task of trying to raise $32 million from private donors to offset city expenses, but so far that effort is $8 million short of where it should be. The goal now is to raise enough to keep the city from losing money.
"I honestly believe that if Larry Ellison wins it. It's going to be back and be 10-times more exciting with more teams next time," said Buell. When we asked Buell if he would ever volunteer for this job again, he laughed and said, "If I want to stay married I wouldn't."
Barclay said he didn't like being accused of not doing the right thing. Wednesday's hearing may have served to help clear the air. After the hearing, Barclay told ABC7 News he now believes everybody is on board.
