Verdict on Cup Leaves Questions in Wake

The reality of San Diego winning the chance--finally--to serve as host of the America’s Cup regatta in 1992 brought hurrahs and cheers from many corners of the city Thursday, but the questions of a few clouded the enthusiasm of others.

Not long after the New York Court of Appeals upheld by a 5-2 vote a lower court decision awarding sailing’s top prize to the San Diego Yacht Club, city officials and others debated just what it meant and how everyone ought to proceed.

The estimated $1.2-billion windfall the event is expected to bring the city had a lot of people excited.

“We’re particularly happy the citizens of San Diego have the America’s Cup back,” said Al Reese, spokesman for the San Diego Convention & Visitors Bureau. “The Cup competition will bring significant international attention to San Diego as a destination, and a significant number of international visitors.”

In the office of Mayor Maureen O’Connor, the reaction was equally positive.

“Obviously, the mayor is delighted--this is great for San Diego,” said Paul Downey, the mayor’s press secretary. “We’ve been fighting for well over two years to get the Cup here, to earn the right to a full-scale regatta, and now we’ll have it in 1992.”

Actually, 1992 is a bit misleading. The finals of the America’s Cup regatta will begin in May, 1992, but Tom Ehman of the America’s Cup Organizing Committee said preparations, and preliminary races will begin long before then.

Ehman said the “challenge period” will allow international yachting syndicates to enter the Cup competition for one more month. By May 26, he said, the committee will have a list of the estimated 12 to 20 syndicates that will come from as far away as Japan, West Germany, Sweden--and, yes, even New Zealand--to compete. It was Michael Fay’s Mercury Bay Boating Club of Auckland, New Zealand, that was the plaintiff in the longstanding litigation that kept the San Diego Yacht Club at bay.

Ehman said another important date is May 30, when competitors will meet to spell out rules and conditions.

“And that’s a big deal,” he said.

By Christmas, he said, syndicates will be arriving and setting up camp, and a year from now, in May 1991, the city will play host to a world championship race, a kind of “dress rehearsal,” in Ehman’s words, followed by the America’s Cup trials from January through April of 1992. The two teams that win the challenge races will vie for the America’s Cup trophy a month later.

Ehman conceded that it’s “a lot to get done” in a short time, and some openly wondered if everything that needs to happen will, in fact, happen.

Don Nay, port director of the San Diego Unified Port District, said he has “no idea” how much preparations for the race will cost, or who will pay for it. But, because port revenues now exceed expenditures by more than $40 million a year, Nay said he expects a few people to cast “a hungry eye” toward his agency.

“We have a question of how much we’ll have to spend for the lawsuit in which Point Loma residents are suing us in a $200-million complaint,” Nay said, referring to litigation brought by homeowners irate over noise from Lindbergh Field, which is operated by the Port District. “We also have the duty of ridding the bay of toxic pollution, and that may cost $100 million.

“I’m sure people will turn to us, but we have many more demands than resources.”

Nevertheless, the Board of Port Commissioners has long been enthusiastic about the city’s chances for being host of the world’s premier yachting spectacle. Commissioner Dan Larsen was once quoted as saying the port would pay “whatever it costs” to get the event.

Nay said money is not the only problem. Recent rule changes in keel size could prevent access to parts of the bay.

“They’ve increased the draft from 9 to 13 or 14 feet, which eliminates a good deal of our bay from housing these syndicates,” Nay said. “We have a very shallow bay. Plus, no Harbor Island marinas are available, few on Shelter Island are available, and it’s next to impossible to dredge because of environmental concerns. I honestly don’t know where many of these syndicates will go.”

Ehman said the 14-foot draft poses “a bit of a problem, but I thought it would be a bigger problem than it looks like it’s going to be. In other words, I’m more optimistic than I was before.”

He said the committee has isolated 20 sites around the area, extending from Mission Bay to National City. He said private shipyards and marinas will house most of the crews “without environmentally intrusive work having to be done.” He mentioned Commercial Basin as one possible site.

And cost?

“It could be next to nothing, if all are accommodated in private shipyards,” Ehman said. “Some improvements may be necessary, and those may cost several million dollars, but we expect private money to be the source of that. And, whatever is done has residual value. It benefits the sites long after the race is over.”

Ehman said that, if any public money is used “it will be port money. In other words, it will be port revenue, which is quasi-public money but isn’t taxpayer money.”

Ehman said the committee’s operating budget is about $20 million. Most of that goes to organizing the event and paying for administration, race management and overhead. He said the Media Center, which took up a 20,000-square-foot building when the race was held in Fremantle, Australia, may end up in the B Street Pier area, but again, private money is hoped to be the primary funding source. The former San Diego Police headquarters was used as media center for the America’s Cup Challenge in 1988, but that site is no longer available.

Ehman said the estimated $1.2 billion in revenues for the city--a figure based on a 1987 research study--should exceed all previous America’s Cup competitions. He said the 1983 race in Newport, R.I., brought in an estimated $500 million, with the last America’s Cup netting Fremantle and nearby Perth $650 million.

Ehman estimated the event as having the impact of eight to nine Super Bowls being played in San Diego all at once.

Downey said the city expects an economic windfall from the event, using the recent Soviet Arts Festival and the 1988 Super Bowl as barometers. He said the three-week arts festival brought in $50 million, the one-week Super Bowl festivities $150 million.

“Given that five to six months of trials will precede the finals, I see the $1 billion figure as realistic,” Downey said.

Not everyone was inclined to laud the economic benefits, and some were skeptical about the cost.

“I’m convinced of the economic boon to the city, and I’m delighted it will be held here,” said City Councilman Bob Filner, whose District 8 includes waterfront areas. “It’s clear to me that the city ought to work with the group that’s going to sponsor this thing and facilitate it the best way we can.

“But we are not in a position to pump public financing into the America’s Cup. It’s not only because of our $60-million budget deficit, although that’s certainly a factor. But this boon that’s predicted will go only toward well-defined sectors--hotels, restaurants, etc. If some subsidy has to come on the front end, why don’t those groups get together and put the money up? Why does it have to be public money?

“The groups that directly benefit, these are the ones that ought to be funding. I don’t know what the thing costs, but I’ve seen figures in the millions of dollars thrown around, and I’m hardly prepared to support that,” Filner said.

“This is the type of event in which the vast majority of the city’s population will not be involved, or even able to witness the event. If this is such a big moneymaker, why is it costing anything? Governmental monies can’t be justified.”

Last month, a bill designed to help finance preparations for the race was introduced by Assemblyman Bob Frazee (R-Carlsbad), but Richard Ledford, Frazee’s chief of staff, said Thursday that the bill has been withdrawn from consideration.

Ledford said the bill proposed to loan either the city or county $10 million with which to fund race preparations.

“But neither the city nor the county felt comfortable with repayment coming from the Transient Occupancy Tax (TOT), or the state taking a portion of revenue from city and county sales taxes,” Ledford said. “So, it’s dead.”

Downey said the mayor’s office wants to work with the organizing committee as much as possible, but with talk of libraries and parks being closed and funding for the arts slashed to accommodate budgetary needs, the city can’t justify money for a yacht race, he said.

“When it comes to hard cash,” he said, “we just don’t have it.”