At first glance, the America’s Cup appeared to be a fun boating race on the San Francisco Bay. The truth, however, is that the event was not only a failure but yet another symbol of the incredible inequity between different communities in San Francisco.
Mayor Ed Lee, a leading force behind much of the displacement of low-income residents and the gentrification currently happening in San Francisco, championed bringing the America’s Cup to San Francisco in 2013.
“The 34th America’s Cup generated hundreds of millions of dollars in economic activity for San Francisco, created thousands of jobs and showcased our spectacular waterfront, the beauty of San Francisco Bay and the sport of sailing to millions of spectators around the world,” said Lee in a statement in December 2013.
What the Mayor’s politically charged statement does not say is that the America’s Cup employed less than half of the originally expected 8,839 workers, only gained about one fourth of the originally projected 2.7 million visitors, and also earned the city just a fourth of the expected $24 million in tax revenue.
To make matters even worse, city budget analysts recently revealed that the event cost city taxpayers over $5.5 million.
Ed Lee, despite the broken promises of the event and the $5.5 million loss, is making an audacious proposal to hold the next America’s Cup in 2017.
“I look forward to working with you to negotiate a thoughtful agreement that sets the stage for an even greater success,” said Lee in a December 23 letter to the America’s Cup Event Authority. “It is with great enthusiasm, guided by the lessons learned and practical experiences of the 34th America’s Cup, that we propose venue sites for the 35th America’s Cup in San Francisco in 2017.”
While Lee points out that the event did ostensibly produce $550 million in “economic activity,” according to figures by the business-friendly Bay Area Council, this is still about one third of what was originally projected.
It is even more important to recognize who was positively affected by this “economic activity.” The event took place on the San Francisco northern waterfront, one of the most affluent areas of the city. Lower-income neighborhoods, primarily those in the southeast sector of the city, received far fewer financial benefits.
With so much economic activity, it is hard to believe that San Francisco came out $5.5 million in the red. The reason was the insipid efforts of the America’s Cup Fundraising Committee, which fell millions behind projected contributions.
Larry Ellison, CEO of Oracle and primary sponsor of the event, might have been willing to reach for some pocket change out of his $41 billion net worth but at the end of the day only contributed his enormous ego to the race.
Despite the city losing over $5 million on the boat race, America’s Cup officials are looking at the possibility of holding the 2017 event in Hawaii or San Diego as San Francisco officials declined to offer the same deal as they did in last summer’s race. If the city losing $5.5 million is a “deal” that is not good enough for the America’s Cup planners, Ed Lee must withdraw his proposal to hold the event in 2017. The city’s general fund cannot afford another $5.5 million loss on a yacht race for billionaires.
Let us not forget this is the same Mayor Ed Lee who last year vetoed $843,000 going to credit recovery programs for students in the SF Unified School District, primarily Latino and African-American students who were not on track to graduate. Furthermore, he even said in his veto statement that he does “not support the use of general fund reserves—money we set aside to backfill safety net cuts from the state and federal government—for this purpose.”
If the money cannot be used for the purpose of educating youth in the most underserved communities in San Francisco, it is hard to fathom how over six times as much from the exact same funding source could be used for Larry Ellison’s boating festivities.
Despite economic improvement over the past few years, the city still faces a $129 million budget deficit. This results in health and human services continuing to be cut every fiscal year.
Even without a budget deficit, the city should have considerable reservations losing $5.5 million on a boat race that brought economic activity only to Fisherman’s Wharf and the Marina District. However, with the current economic situation in San Francisco, the answer to another America’s Cup is clear: San Francisco can not afford to host another America’s Cup.