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Recession May Take Wind Out of San Francisco’s Economic Hopes for America’s Cup

October 17, 2012 at 12:00 AM EDT
The 2013 America's Cup, an international sailing competition, will be held in San Francisco Bay next September. Hosting the race is all about economics, but with global financial decline San Francisco may not reap the hoped for $1.4 billion in revenue or 9,000 promised jobs. Spencer Michels reports.
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JUDY WOODRUFF: Finally tonight: The world’s fastest sailboats and best sailors will compete for the America’s Cup trophy a year from now. But the host city of San Francisco is already gearing up.

NewsHour correspondent Spencer Michels has our story.

SPENCER MICHELS: Ever since 1851, sailors and well-heeled skippers have raced through the water in ever more expensive, ever more high-tech sailboats, in pursuit of the coveted America’s Cup. To the victor go the spoils, and in 2010, Larry Ellison, founder of software giant Oracle, won the Cup for America.

Ellison’s prize, besides bragging rights, was to get to choose where the race would be held next. His choice was to bring the contest to his home waters, San FranciscoBay.

Ellison concocted a series of regattas all around the world for competing teams from 11 countries designed to build enthusiasm and excitement for the main event, America’s Cup 2013, where 72-foot boats will plow through the bay.

These preliminary races featured boats that measured about 45-feet long, with carbon fiber hulls and wing sails, as described by racing announcer Andy Green.

ANDY GREEN, America’s Cup announcer: They’re the same sailors, they’re the same teams. The boats are just a little smaller. So, essentially, it’s their practice race. This is just to get everyone excited and passionate about the sailing.

SPENCER MICHELS: The prelims going on now, with the showdown next year, are the first time spectators can easily view the races from the land. Usually, these events were far enough out to sea that watching them was much easier from a boat, and that limited who could attend.

Announcer Green’s job is to clue the audience into what is going on.

ANDY GREEN: The format of the America’s Cup has been tweaked considerably over the last few years. Basically, very simple now. You can see the boats racing. You can see them right in front of the shore, and it is very clear who is winning and who is losing.

SPENCER MICHELS: And to help Green and TV viewers, Cup officials are employing a graphic system to make the televised regatta races understandable, somewhat like the virtual first down line for television broadcast of football games.

Adam Fisher wrote about the system for “Wired” magazine.

ADAM FISHER, “Wired”: The TV coverage is crystal clear. You know who is winning. A lot of people looking at the coverage seem to think there is actually dye in the water, it is so lifelike. But it is all digital.

SPENCER MICHELS: The design of the 72-foot boats is continuously being tweaked, but nobody is talking much about details as the work goes on in secure locations, like this old San Francisco pier.

But the beauty of the boats, big or small, is only part of the story.

As spectacular and graceful as these boats are, the process of arranging these races in San Francisco was clumsy and contentious.

SPENCER MICHELS: To get the races, San Francisco had to agree to Ellison’s demands that he get development rights to some old piers along the bay in return to renovating those piers for the city. The city was eager to go along because, as America’s Cup CEO Steven Barclay said, the rewards in jobs and money would be substantial.

STEVEN BARCLAY, America’s Cup: The America’s Cup coming to a city is all about the economics. And San Francisco did its own numbers, and they said it was going to bring $1.4 billion worth of economic benefit here and 9,000 jobs.

SPENCER MICHELS: But a disappointed San Francisco Mayor Ed Lee announced that the agreement and the promises of many of those jobs was going by the board after Cup organizers decided that developing the pier would cost too much.

Still, the city and Oracle went ahead with race plans. Others were relieved. They saw the arrangement with Ellison as a giveaway of city property. And still others feared environmental consequences of too many visitors and non-recreational uses of waterfront land.

And then there was the matter of boats. Originally, organizers thought up to 15 72-foot boats could compete, but they cost millions. And in the midst of a worldwide recession, only four of them, plus Ellison’s, decided to take part. Nobody is suggesting the race will be a bust, but the prospects for the city and the Cup itself are not as bright as they had been.

ADAM FISHER: The event is going to be bigger and better than it’s been in a generation. However, in other cities in the past where the America’s Cup has taken place, there has been a huge amount of property development along the waterfront, kind of like say an Olympics. That is not going to happen in San Francisco.

SPENCER MICHELS: Still, for sailing fans, and some who are not, the prospects of international competition and just the chance to watch the big boats glide through the fog and into the wind is reason enough to support the race.

WOMAN: I like to see them keel up.

SPENCER MICHELS: Why?

WOMAN: It is exciting.

SPENCER MICHELS: So, it is kind of graceful, I think, the whole thing, huh?

WOMAN: Yes. Majestic.

WOMAN: Yes.

SPENCER MICHELS: Majestic?

WOMAN: Mm-hmm.

SPENCER MICHELS: But some people say, well, with a lot of money, you can make it majestic. This is a rich man’s sport.

WOMAN: That’s OK. I look watching rich men sail.

WOMAN: It is, admittedly, yes.

SPENCER MICHELS: What were going to say?

WOMAN: Is. It is a rich man’s sport.

SPENCER MICHELS: The practice races in 45-foot catamarans continue on and off through May of next year, followed by the finals in the America’s Cup in September of 2013, the time of year when the fog usually lifts in San FranciscoBay.

JUDY WOODRUFF: And an update to Spencer’s story. Yesterday, Oracle’s 72-foot catamaran capsized in a practice run on San FranciscoBay and was swept out to sea. No one was hurt in the accident, but the mast and 131-foot wing sail on the multimillion-dollar boat was destroyed.