The Kiwis Have Landed : New Zealanders Spend Money, Time as They Wait to Race for Cup

A few months ago, Stephen L. Lindsey was selling no more than two cases of Steinlager--New Zealand’s favorite brew--at his Bula’s Pub & Eatery, a small saloon and restaurant on Orange Avenue in placid Coronado.

But then Michael Fay and his renegade America’s Cup syndicate swaggered into town and set up housekeeping just down the street.

Now Lindsey is selling up to 40 cases of Steinlager a week, his business is up 25%, and he is expecting to hit the economic stratosphere in a few weeks when the visitors from New Zealand trek to San Diego to see their boys race for the Cup.

“It’s their little watering hole,” said Lindsey, Bula’s owner, cheerfully explaining that the New Zealanders “sort of picked my place”--largely because it happens to be the closest bar to their apartments.

“It’s been great,” Lindsey said of his Kiwi business and new-found notoriety, which has landed him in New Zealand newspapers and two airline magazines.

Launched Economic Ripples

Such has been the impact of the New Zealanders, who have set off economic ripples that have touched local businesses, ranging from the Coronado Oakwood Garden Apartments, home to the 100-person contingent, to Flight Trails Helicopters Inc. of Palomar, which ferries VIPs and the media, to the San Diego Charter Boat Co., which supplies power boats, to ordinary residents, whose used cars the transportation-hungry New Zealanders have snatched up.

While it’s clear that this truncated version of the America’s Cup won’t generate the billion-dollar-plus economic boom that a full-scale international regatta was expected to produce for San Diego, it’s equally true that both sides--New Zealand and America’s Stars & Stripes--have added dollars to the local economy.

Exactly how much, though, is hard to figure.

The Kiwi syndicate, probably the largest ever to

appear at a Cup competition--certainly the largest in the last 30 years, has a $14.5-million budget in New Zealand dollars ($10.2 million U.S.). It spent about $7 million (U.S.) back home to build its large monohull, the New Zealand. Officials for the Fay camp won’t say exactly how much they have been spending in San Diego, but people close to the syndicate say that expenses are running at a minimum of 1 million American greenbacks a month, money that largely is going to San Diego-based businesses. The whole crew has been here since mid-May.

Over at the Sail America Foundation, the group in charge of organizing the races, and at Dennis Conner’s Stars & Stripes syndicate, the working budget for both defending the Cup and putting on the races is estimated at about $14 million. That’s roughly $7 million to build the catamarans, train the crew and pay for other necessities to defend the Cup, and another $7 million needed by Sail America to organize the races, an ulcer-inducing task given that the dates for the race were set just 10 days ago.

The Americans, relying on major corporate sponsorship, have received $2.5 million each from Merrill Lynch, Marlboro and Pepsi, and are negotiating with a fourth corporate sponsor, according to Stars & Stripes officials. Several other businesses are also providing contributions or services ranging from $100,000 to $1 million, officials say. But, when it comes to spending money on administrators, crew and support personnel, Stars & Stripes officials acknowledge they are probably spending considerably less than the Kiwis, mainly because the American group is much smaller and most of its members already live in San Diego.

Has Economic Advantage

Conner’s syndicate has another economic advantage because it has been able to use some of the same equipment it used in Fremantle last year, when Stars & Stripes reclaimed the Cup. On this list are items such as the tender boat, Betsy, other power boats, containers and sailing supplies.

But, even the millions the two sides will spend pale before the Cup defense Sail America had planned for San Diego in 1991, an international regatta the likes of which the city or any other American community has never seen.

A study commissioned by the San Diego America’s Cup Task Force, the civic group created to promote the regatta, and done by the same firm that analyzed the Super Bowl’s impact on the city, projected that the event would pour $1.2 billion into the local economy.

The estimate was based on the assumption that as many as 20 racing syndicates, plus thousands of tourists and media people, converging on the city over two years in a buildup to the final races, would take part in the largest Cup regatta ever. In scope, the event was expected to surpass the $636 million in economic benefits that accrued to Fremantle. But that was before Fay’s unprecedented challenge.

“All anyone can say is that it’s going to be a lot less,” said Warren L. (Skip) Hull, director of research for CIC Research, the San Diego-based company that analyzed the economic impact. “Everything about the event (since the Fay challenge) has been so iffy, it’s just hard to know.” Neither he nor anyone else is doing a new analysis of next month’s contest.

Al Reese, spokesman for the Convention & Visitors Bureau, said the city had originally counted on tourists spending part of their vacation in San Diego and watching parts of the challenger elimination races or the Cup finale itself, which would be spread over several months. But the short notice for this race, coupled with the reality that many Americans will have already taken their summer vacations, has scuttled those expectations.

“I think we’ll have a lot of people in town from what we call the Southern California drive market,” Reese said. The races between Fay and Conner are scheduled to begin two days after Labor Day, when hotels in the county usually are about 70% booked, according to Reese. So far, hotels in town are not bursting with room reservations from tourists coming to view the contest, be they from the United States or abroad.

Booked With Convention

Ted Kissane, general manager of the Sheraton hotel on Harbor Island and head of the Hotel Motel Assn., said his hotel is nearly booked full during the dates of the race because of a convention. “We’ll be full with or without the America’s Cup,” Kissane said. So far, he added, few people have even inquired about rooms through the hotel’s extensive international reservations system.

“It’s my gut feeling,” he said, “that, if anything, the America’s Cup, it will be a last-minute type of event for visitors.”

Although the economic windfall will be substantially less than a traditional, full-fledged Cup regatta, local officials believe that the city is still in an enviable position. “Sure, it will be less. It’s three months of activity compared to one week,” said Supervisor Brian Bilbray, who also heads the San Diego America’s Cup Task Force. “So, if nothing else, it’s a Super Bowl. That’s not bad.” A post-Super Bowl analysis of last January’s professional football championship held in San Diego showed that the game and its surrounding festivities brought about $136 million into the city.

Officials also say that San Diego stands to gain much publicity during next month’s races, an intangible and unquantifiable commodity. Perhaps just as important, there’s a feeling that, if Conner wins this one-on-one match race, the contest will have provided the city with an invaluable dry run and better prepare it for staging a full-scale Cup event in 1991.

By looking at the experience of the New Zealand syndicate, though, it is possible, at least to some degree, to better understand the impact that Cup competitors bring to the host city.

“Yeah, a lot of the wives like to take the credit cards for a walk into the fresh air,” said a chagrined Graeme Colman, spokesman for the Kiwis.

The 100-strong New Zealand team--including 64 crew members and 35 relatives--have been living here almost three months, though some have been here longer than that, making arrangements. The syndicate, or perhaps more precisely Michael Fay’s pocketbook, has underwritten their stay, from their shelter to their meals to their work.

The economic ripple begins at the Oakwood Garden Apartments in Coronado, where the New Zealanders have taken over dozens of apartments (Stars & Stripes has put up about 15 people there, too), as well as a large recreation hall, where three people prepare breakfast and dinner for the syndicate members.

“We’re shopping at local markets for fresh food,” said Colman, noting that at a typical breakfast, for example, the cooks will prepare at least 15 pounds of bacon.

“We’re very happy they chose us,” said a spokesman for the management company that operates the bay-side apartments, who declined to say how much the syndicate is paying in rent.

The needs of the New Zealanders and their huge monohull are many, and, for those who have been able to satisfy them, the evidence is ample that the America’s Cup is more than just a sporting event; it is a commercial venture.

It goes from little things, such as the syndicate’s buying cellular telephones, a facsimile transmission machine and insurance, and its renting four cars and four vans, to large things, such as outfitting 50,000 square feet of dock space, building a 12,000-square-foot sail loft and renting boats, a crane and helicopters.

One of the biggest local companies to benefit from all this is R. E. Staite Engineering, which specializes in heavy foundation work and marine construction.

The company started working with Fay last year. It has helped the Kiwis select their dockside site near the foot of the San Diego-Coronado Bay Bridge. It is renting them a 214-foot-long, 56-foot-wide barge and 300-ton capacity crane used to lift the boat in and out of the water each day, and the men to operate it. It has helped select the subcontractors the New Zealanders have used to construct part of their facility.

The firm has also derived business by leasing part of its waterfront facility next to the Rowing Club Chart House to Conner’s Stars & Stripes syndicate, which is using it as its headquarters. The company is also supplying Stars & Stripes with a crane to lift its catamarans as well as providing the syndicate with electrical subcontractors.

“We spent 2 1/2 months doing intense engineering work for them (New Zealand) to develop a system to safely lift their boat and select the right type of crane to be used,” said Ray Carpenter, owner and president of Staite Engineering. “It’s a specialized project, and some of the equipment is from Colorado and part of it is from Northern California.”

“We’ve looked at this as a straightforward commercial venture. It’s been a good experience for our firm and our people to see how other people of the world operate. To handle an event like this is to our advantage as an organization,” Carpenter said, explaining that he now understands firsthand how a full-scale regatta would benefit various sectors of the economy.

He estimates his company will have received a combined $1 million from both syndicates by the time the contest is over in several weeks. “I don’t think people realize how significant this thing really is,” he said.

Another recipient of this new-found Cup business is Flight Trails Helicopters of Carlsbad. The company, which until the Kiwis hit town was concerned mainly with flying developers and occasional photographers over the region, has cornered the America’s Cup market in San Diego.

Not only is the company the sole one used by the syndicate--it has temporarily rechristened one of its choppers Kiwi Magic--but also the syndicate has recommended the service to out-of-town media so that it now regularly ferries photographers and cameramen for American television networks, Time magazine, Sports Illustrated and Yachting magazine, to name a few.

Schedules Around New Zealand

Business is so brisk that the firm has built its workweek around trips to see the New Zealand boat practicing in the ocean.

“We usually go out at least three times a week between noon and 3,” said Ivor Shier, a pilot as well as vice president of Flight Trails. Although Shier declined to disclose the size of his contract with the Kiwis, he said the hourly cost of renting one of the company’s helicopters ranges from $175 to $400, depending on its size.

“It’s been a great benefit to our business,” Shier said, adding that he expects to be flying six hours a day in a large chopper on race days. “There’s no doubt this has added to our business, but maybe more important is the fact it has” provided the company with publicity and recommendations within the media that “translate into more business in the future.”

As an added bonus, Flight Trails recently began providing helicopter service to Stars & Stripes, taking a video crew from New York out to film the catamarans.

Also helping the New Zealanders fill a void is the firm that owns Ensenada Express, which has supplied a 100-foot boat that follows the monohull whenever its goes to sea. Fay has chartered the vessel for six months. Although company officials also declined to specify how much money they are receiving for the lease, they say the boat usually rents for an average of $600 a day.

Now the company is in line to supply up to eight more boats to take spectators and guests of the syndicate out to the race course next month.

“The impact for us has been big,” said Tom Armstrong, general manager for Ensenada Express, which specializes in transporting tourists between San Diego and the Baja California town of Ensenada. “We’re looking for a lot of exposure” during the races, he said.

Of a similar mind is Vince Sims, captain and president of San Diego Bay Charter Co., which he specifically started last year “knowing the America’s Cup would provide an opportunity for me.” Sims, who is also charter director for the downtown Marriott hotel, has supplied three power boats to the Kiwis. They rented his 55-foot power boat to take out the press and other VIPs when the monohull made its media debut in San Diego May 31.

Doesn’t Want to Gouge

The going rate for his 55-foot craft ranges from $150 to $220 an hour. As did many other business owners interviewed, Sims said he is very careful to not appear as if he is out to gouge the New Zealanders.

“I’m hoping the Cup will provide other business for me from the media, corporations and spectator-type affairs,” he said. “National Geographic, ABC, CNN . . . all these people are going to come back, and you want to be in a position where they hire you again.”

While Fay, a multimillionaire, has bankrolled his syndicate, members of his crew--for the most part young working sailors who are far from rich--have nonetheless also contributed to the economic ripple. They, of course, have hit all the main tourist spots, Sea World, the zoo and Tijuana, as well as spent time in Coronado restaurants and pubs and Sunday afternoons at the Beachcomber and The Pennant in Mission Beach. But they have also put a minor dent into the used-car market.

Since most of the crew has no transportation once they are off work, several have bought used cars, at prices that make them steals in New Zealand where protectionist policies have caused prices of new cars to skyrocket. Although some have opted to pay as much as $1,200 for a Honda, Peter Lester, the New Zealand tactician, paid about $600 for a 1974 Cadillac, a boat of a car that is the talk of the camp.

So what will happen when they are done and gone?

Well, at Bula’s, owner Lindsey says the Kiwis have put an end to one old fad and may have started a new one:

“Remember how everybody used to drink Corona with a lime? Well, that’s kind of passe now, and now people--the locals--are drinking Steinlager.”