Port Wary of Costly Cup Fund Requests

The Board of Port Commissioners on Tuesday approved $2.3 million in America’s Cup improvements to the B Street Pier but withheld a decision on an additional $12 million in regatta-related expenses.

Instead, the commissioners set a special meeting for 10 a.m. Oct. 16 to discuss in detail the America’s Cup Organizing Committee’s request for port money.

Although the multinational regatta is not scheduled until 1992, race organizers say they need to know soon what the San Diego Unified Port District intends to pay for.

“Time is running out for us,” said Tom Ehman, the organizing committee’s chief executive, after the commissioners meeting. “We welcome the Port’s scrutiny (of the ACOC’s budget). That doesn’t cause us any problem at all.”

Ehman was referring to an analysis of the ACOC’s budget conducted by the Port District’s staff. The 21-page report raises several questions about the committee’s budget, ranging from the several hundred thousand dollars set aside for travel, food, lodging and business entertainment to several hundred thousand more earmarked for management salaries, travel and entertainment for visiting reporters, marketing fees and other expenses.

In response to those questions, the America’s Cup Organizing Committee last Friday submitted a voluminous and detailed budget proposal. Both the Port District’s executive director, Don Nay, and port commissioners said they need more time to evaluate the document.

Overall, organizers estimate it will cost $25.4 million to put on the world’s most famous sailing race, which now has a field of 12 challengers from 10 foreign countries, the largest ever for an America’s Cup regatta.

The ACOC is seeking $10 million directly from the Port District, $8.7 million in cash and $1.3 million in so-called “in-kind” contributions such as free rent, equipment rentals, utilities and minor construction.

This proposal, however, excludes a total of about $4.4 million in improvements to the B Street pier, including the $2.3 million approved Tuesday.

The $10 million from the Port District would be used to pay for costs in 10 specific areas, including an America’s Cup Village next to Seaport Village, management of the regatta, several festivals and the opening ceremonies, as well as paying for marketing program, Cup-related youth programs, a Cup museum, an America’s Cup administrative headquarters and a float in the Rose Bowl parade.

The nonprofit organizing committee said it will on its own raise the additional $15 million its needs to put on the event, including a $4.6-million debt left over from the “Coma Off Point Loma” race of 1988 matching Dennis Conner and maverick New Zealand challenger Michael Fay.

Commissioners again said they support the Cup and understand how a successful event will directly benefit bayfront property managed by the Port District. But how much and what is an appropriate expenditure are decisions yet to be made.

Commissioner Lynn Schenk said that, although the board is willing to spend money on the regatta, she was concerned some members of the ACOC have been getting the “wrong signal.” She said the board has not put a dollar amount on what it expects to contribute. “Our check book may not be as unlimited as you think it might be,” she told Ehman.

One example of that was the proposed upgrading of the B Street pier to accommodate the America’s Cup activities.

Commissioners were willing to spend $2.3 million on improvements, ranging from bringing the large building on the pier up to current earthquake standards to roof repairs. The biggest expense was $1.5 million to turn a part of the building--which also houses the cruise terminal--into the America’s Cup headquarters.

Commissioners said they felt comfortable spending the money on the headquarters because, once the regatta is finished, it can be turned into rentable office space.

But commissioners balked, at least for now, at spending about $2 million for construction of a 28,000- to 30,000-square-foot media center at the end of the pier. Nay, the port’s executive director, said the cost is “very high” for a facility that will be used only for about six months.

He suggested, the commission agreed, that his staff and the ACOC look for possible cheaper alternatives, such as renting another facility or remodeling a less expensive structure. In 1988, the media center was housed at the old police station on Market Street at little cost. The station is not available anymore because it is part of the planned expansion of Seaport Village.