America’s Cup Wallows in Sea of Dashed Expectations : Sailing: Regatta proves to be a boon to a few businesses, but the event fails to become the spectacle supporters had hoped for.

The London Telegraph recently assessed the America’s Cup sailing regatta, the finals of which began here Saturday, as being awash in a “sea of troubles.” It described the grandeur of the world’s oldest regatta as “floundering in a sea of apathy.”

The most tangible effect of the race, the newspaper said, is that hundreds of people “will lose millions of dollars.” And so far, no spin doctor has surfaced who could put a happy face on what many local residents are calling a boondoggle.

Back when multimillionaire businessman and sailing enthusiast Malin Burnham approached the San Diego Unified Port District asking for $20 million in public money to fund the regatta, he equated it to the World Cup soccer championships and the summer Olympics.

But, two years later, with the finals officially underway, Bill Koch, the head of the America 3 syndicate, which is representing the United States in its defense against Il Moro di Venezia of Italy, describes the local reaction by concluding flatly:

“San Diego is yawning at the America’s Cup.”

Reasons given for the underwhelming response include: the national recession and its devastating impact on Southern California; the fact that San Diego, the nation’s sixth-largest city, is the first metropolitan area to stage the event; and lack of any coherent focus.

In every other America’s Cup setting, the syndicates of various countries set up shop close together, their flags fluttering beside one another, as if in a United Nations of sailing.

But here, where the wealthy syndicates protected their compounds with the fervor of the old Kremlin, headquarters were scattered all the way from Coronado to Mission Bay, more than 10 miles to the north.

Russia was supposed to have an entry, but two competing syndicates ended up feuding with one another, and the hull that was flown from St. Petersburg, formerly Leningrad, almost ended up in a local landfill before a hobbyist bought it for $1--a fitting symbol, some say, of everything this race has become.

Originally, the America’s Cup, which has put such places as Newport, R.I., and Fremantle, Australia, on the map, was predicted to pack an economic wallop for a city that now desperately needs it.

A study conducted by economists at the University of San Diego assessed the impact as being about $1 billion, a figure that has since been revised by tourism consultant Robert Rauch to as low as $430 million, with some people wondering if it can come anywhere close to that.

Board of Port Commissioners member Lynn Schenk remembers the day Burnham and his coalition of promoters came before the commission, asking for the $20 million that at least some members seemed eager to provide.

“They wanted funding for an America’s Cup float in the Pasadena Rose Parade,” Schenk said, incredulously. “They wanted money so that the spouses of (race) judges and other executives could travel along, too. I don’t even know of large corporations that pay for the spouses to travel.

“They even had a line item in there demanding that the Cup itself be flown in a first-class seat! How would the Cup know it was flying first-class? Couldn’t it at least fly coach? I got the feeling that the people putting this together didn’t have high regard for the public nature of port funds.”

The San Diego Unified Port District eventually gave the ACOC about $8 million. As it turned out, the fears of Schenk and other commissioners were but a sneak preview of what became a litany of problems for the ACOC and the event itself.

As the finals drew near, and Stars & Stripes, the boat skippered by hometown hero Dennis Conner, was losing to Koch and America 3 , fears grew even more intense.

It got so bad in early April that San Diego Mayor Maureen O’Connor, in a press conference, pleaded with residents to invite out-of-town friends and relatives to come see the races or else have the city endure economic peril.

And, as for the event that Burnham once said was every bit as big as the World Cup and the Olympics. . . .

Coast Guard officials said 587 private boats crowded around the course to watch the first day of the Cup races. A Coast Guard spokesman said there were no incidents and the spectators were well-behaved.

More than a year ago, one local hotel executive promptly booked a group of cancer doctors, nurses and researchers rather than waiting to see if Cup business developed. This week, only a few of his 1,300 rooms are being booked by Cup tourists, a clear case of cancer over Cup.

Michael Fischer, director of marketing for the Le Meridien in Coronado, said his hotel, like many in San Diego County, paid $50,000 for the right to be an “official sponsor” of the Cup races. After being booked solid in reservations for May, Fischer now sees a drastically different ledger.

“We’re finding ourselves wide open,” he said sadly, and posed a question on the lips of many San Diegans.

“What if we win ?” he said. “What if America 3 wins, and we have to have this thing in San Diego again? How are we going to approach it (three) years from now? For me, that’s the million-dollar question.”

Not everyone is unhappy. Pockets of positive reports do exist, although the balance sheet as a whole is fairly gloomy. Coronado merchant John Sawicki, who built his own America’s Cup village and named it Kiwinado in honor of New Zealand, said he lost $250,000.

Sawicki says toilet paper and paper plate manufacturers, caterers and apartment managers have “exceeded their wildest dreams,” and that Sir Michael Fay, the head of the New Zealand Challenge, spent more than $25,000 a day maintaining a crew in Coronado.

Koch of America 3 estimates having spent $64 million of his own money, much of which made its way into the local economy. The same is true of Raul Gardini, the head of the Italian challenge and a member of the fabulously wealthy Ferruzi family.

Ed Davis, manager of the Oakwood Apartments in Coronado, where many of the 190 New Zealand crew members stayed for the last year and a half, said Fay’s Kiwi contingent brought the Oakwood more than $70,000 a month in guaranteed rent.

“We love it, we love it, we love it,” Davis said. “You can Cup us to death as far as we’re concerned.”

Davis said restaurants, particularly in Coronado, did “extremely well,” but other restaurateurs, citing huge expectations, see the Cup largely as a disappointment or failure.

XTRA-AM sportscaster Lee (Hacksaw) Hamilton, host of the city’s most popular sports talk show, offers some hard evidence about the reaction of local fans, who are eagerly awaiting July’s Baseball All-Star Game but who have shown little interest in the Cup.

“I take, on the average, 60 calls a day from listeners,” Hamilton said. “And, of those, I get on the average 10 calls a week on the Cup, which is not a lot. So, that’s 10 out of 300. Three percent.”

And, Hamilton acknowledges that some of the calls are part of the “Just what is this stuff anyway?” genre.

True Cup fanatics, who have traveled across oceans and thousands of miles to get here, are befuddled by the local response. Interest in the race now makes the front pages of Italian newspapers. Until the Kiwis lost to Il Moro di Venezia, interest in New Zealand was just as high.

“They have no idea how to do things (in San Diego),” an irate Tolly Travis of Perth, Western Australia, told the London Telegraph. “In Newport, the parties went on all day and all night. Everybody had a marvelous time. The America’s Cup ball was out of this world.

“Perth was really lively, too. But San Diego is a dead loss. The problem seems to be there is no sense of style or elegance here. Can you imagine a city that is hosting the America’s Cup, and expecting visitors from all over the world, to close its restaurants before midnight? I am hoping Italy wins the Cup this time so that the next defense will be in the Mediterranean. The Europeans can bring back the elegance that has disappeared this year.”

Sawicki, chairman of a Coronado-based marine engineering and services company, said San Diego could have been one of the sexiest--rather than one of the dreariest--venues for showcasing the pursuit of “Auld Mug,” the battered silver trophy first sailed for in 1851.

“If we get it again, we need somebody like a Peter Ueberroth to come in and do the goddamn thing right,” he snarled. “The ACOC never allowed the community to get involved. Look at the magnificent job the Greater San Diego Sports Assn. did in running Super Bowl XXII (in 1988). The National Football League still raves about that. That’s an example of how this should have been done.”

ACOC President Burnham counters the storm of criticism by saying that, despite its highly publicized financial woes, the beleaguered group is “sliding through nicely.”

That’s a decided contrast to a year ago, when ACOC’s cash-flow problems had slowed the organization to a crawl.

As its cash-flow problems deepened, ACOC was forced to license its prized television coverage to a group that represents foreign challengers.

The ACOC turned over an international tourism village next to the Santa Fe Depot to third parties. And it ruffled feathers by licensing a travel agency that detractors viewed as a direct competitor to many local businesses that had given ACOC financial support.

The ACOC was also dragged into court by two irate creditors who were demanding a combined total of more than $360,000.

Burnham, who said last week that the lawsuits have been settled, also maintained that the ACOC’s highly publicized financial battles did not stop the group from accomplishing its two most pressing tasks: Hosting the regatta off Point Loma and providing a state-of-the-art press room for hundreds of reporters from all over the world.

Yet, although Burnham said that ACOC is “in considerably better financial shape than we were six months ago,” it still lacks the cash needed to pay all of its bills.

ACOC will generate some cash from licensing deals, but ACOC’s ability to wipe the slate clean is dependent on America 3 defeating the Italians so the races can return to San Diego in 1995.

With that race guaranteed, ACOC would allow major corporations to bid for the right to “sponsor” the 1995 event.

Although that undoubtedly will upset purists who are still angered by advertisements on spinnakers and hulls, it will help pay the bills, Burnham said.

And if America 3 loses to the Italians?

“We will be somewhat under water as far as cleaning up 100% of our (bills),” said Burnham, who declined to discuss specific numbers.

Burnham also acknowledged that the ACOC’s initial plans were overly optimistic.

He blamed the nonprofit organization’s financial woes on ACOC’s bitter, two-year legal battle with Fay over the race format and the worldwide economic slowdown, two hurdles that have blocked ACOC’s fund-raising.

With the finals now underway, Burnham said ACOC had also learned an important lesson.

“We would allow the TV industry to produce television coverage, we will not attempt to take that on. We will make sure we have a very strong, financially viable contractor to do the village. We would still do the race management (and the press center), but we would have less shore-side involvement.”

“We’ve learned some lessons,” Burnham said. “These are some of the complexities we can do without next time.”

And, if there is a next time in San Diego, Burnham won’t be serving as president. “I don’t plan to (be president) again,” Burnham said. “I’ll help get it organized.”

Coast Guard officials said 587 private boats crowded around the course to watch the first day of the Cup races. A Coast Guard spokesman said there were no incidents and the spectators were well-behaved.

Paul Downey, the mayor’s spokesman, said the event can’t be called a failure, if only for the public relations media blitz it represented.

“We had a major spread in French Vogue (magazine),” Downey said. “We were written about by newspapers and magazines from Hong Kong, Australia, Japan, New Zealand, Italy. . . . The telecasts on ESPN are going all over the world, and they always include a beautiful picture of the San Diego harbor and city skyline--the kind of thing you can’t buy at any price.”

Coronado’s Sawicki agreed, saying it hasn’t been a failure, “just a non-event, a yawn--a yacht race only for those interested in yachting. It hasn’t become the spectacle we all wanted it to be and believed it would be.

“Like I said, a non-event. But you know, it didn’t have to be. It could have been and should have been a whole lot more.”