Spare change, Larry?

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Tensions flared over the America's Cup last week as critics called for billionaire yacht owner Larry Ellison to cover the looming city deficit out of his own deep pockets.

It's evidently a popular idea: A petition asking Ellison to pony up had collected 1,663 signatures as of Wednesday morning.

The language in the petition, started by former Sup. Aaron Peskin, cuts straight to the point: "Your net worth is $43 billion," it states. "Covering the America's Cup debt would be equivalent to a person who has $40,000 donating $13.95. Is that too much to ask?"

At a hearing March 13, Sup. John Avalos asked why the city's General Fund was on the hook to help cover costs for the yachting event, despite earlier assurances that the city would be reimbursed for tournament-related expenses.

The prestigious international yacht race will be held on the San Francisco Bay starting in July. A host and venue agreement hashed out between the city and race organizers provided that the America's Cup Organizing Committee, the tournament's fundraising arm, would "endeavor" to solicit donations from private donors to reimburse the city for expenses incurred, originally pegged at $32 million. Total city costs are now estimated to hover around $22 million, but so far ACOC has sent less than $7 million in reimbursement, city agency representatives reported at the hearing.

The fundraising committee has mostly come up dry on the rest — and now Avalos is irked because the city agency that negotiated the deal appears to be "moving the buoys," as he characterized it, by counting a projected tax revenue boost instead of actual reimbursement dollars as adequate compensation for city spending.

Mike Martin, tasked with leading the city's involvement in the America's Cup under the Office of Economic and Workforce Development, showed a slide at the hearing suggesting that ACOC's "remaining fundraising need" was just $2.6 million, since a projected $13 million in increased tax revenues would bring the city to a break-even point. That projection was based on expected increases in sales, payroll and hotel taxes during the yachting event.

The presentation seemed to reframe the premise that the city would be made whole for tournament-related expenditures, as well as reap the benefits of a tax boost, in exchange for agreeing to host the sailing events. Yet Martin called this notion a "mischaracterization" in a phone interview.

"I don't disagree that there are people who think that this is not what they understood to be the deal," Martin said, clearly reacting to Avalos. But "this was part of the policy dialogue at all steps of the conversation."

Reached by phone after the hearing, Avalos did not sound satisfied with the responses he'd heard. "It seems that the commitments that were made to the Board in 2010 ... are not being taken seriously," he said. "Now that they're coming up short on fundraising efforts, they're trying to say the General Fund should be subsidizing the cost of the race."

Martin pointed to a report prepared by Budget and Legislative Analyst Harvey Rose in December of 2010, before the contract between the city and race organizers was finalized. The report included a break-even analysis that factored in tax revenues, and Martin stressed that this consideration had been part of the dialogue since the outset.

But that same report also contained a key recommendation: Rose advised the supervisors to amend the proposed agreement to "require that the America's Cup Organizing Committee pay the City and County of San Francisco $32 million, or final estimated city costs."

No such ironclad requirement was ever included; instead, the fine print in the final agreement wound up containing watered-down language: "The Authority and the City acknowledge and agree that they are not relying in any manner on any current or future commitment ... or any statements, representation, or actions of, any ... agent of [ACOC]."

Nick Magel, who works for Causes.com, told us that Peskin's online petition calling on Ellison to cover the fundraising shortfall was gaining more momentum than most online campaigns taken up via the website. "The campaign is performing well, considering it's less than a day old," he said March 15. "The most impressive indicator is that over 95 percent of the signatories are from the Bay Area. Seems the campaign is striking a chord with local residents."

Comments

reasonable that the city has some skin in the game.

Posted by Guest on Mar. 20, 2013 @ 10:29 am

As Greg pointed out, "When cities give away money to rich people, rich people generally get richer, and cities generally lose money one way or another." Well, whad'ya know, this was forshadowed by the budget analyst's report. Read on:

'According to last year’s analysis by the Board of Supervisors’ budget and legislative analyst, the estimated costs The City will incur stand at $40.2 million. The Port of San Francisco is also pouring $21.9 million into the effort, $3.7 million of which does not come with long-term, noncup benefits.

'That means even if private fundraisers hit their $32 million goal, San Francisco could come up short. And it doesn’t look like that goal will be hit; the money has purportedly dried up at $14 million.

'Also, much of that was a hand-me-down from race organizers, described to SF Weekly last year as an “$8 million payment from [race organizers] characterized as an advance on future sales to be derived from a revenue-sharing split on sponsorships.”

'Private fundraisers tasked with offsetting The City’s costs were afforded wiggle room in the lengthy contract, which says they must merely “endeavor” to raise the $32 million.

'“Not one cent” in private funds is guaranteed, budget analyst Harvey Rose said in November 2010. “So there’s no guarantee whatsoever we’ll get that $32 million.”

'In February 2012, city Controller Ben Rosenfield said, “If they don’t raise the money, it’s on The City.”'

http://www.sfexaminer.com/local/2013/02/america-s-cup-costs-san-francisc...

Posted by Guest on Mar. 20, 2013 @ 10:58 am

the city will rake in millions from this, which of course is why cities fight for the right to host these major glamor events.

Yeah, the SFBG hates successful people - we get that. But the city gets to tax them and there is therefore no reason to ask for charity on top of that.

Posted by Guest on Mar. 20, 2013 @ 11:12 am

As I've pointed out before, events like this -- from the Olympics to America's Cup -- end up costing cities much more than they bring in in taxes. And cities are left holding the bag. It's absurd and false to say SFBG hates successful people. Maybe they just don't like welfare cheats.

Posted by Guest on Mar. 20, 2013 @ 11:39 am

visit, such pageants are also typically used to further ethnic cleansing whereever they are held.

Posted by lillipublicans on Mar. 20, 2013 @ 12:33 pm
Posted by Guest on Mar. 20, 2013 @ 1:54 pm

The magic of the marketplace cleanses away "inefficiencies," right?

Posted by marcos on Mar. 20, 2013 @ 2:00 pm

there are always some who fear that.

Posted by Guest on Mar. 20, 2013 @ 2:11 pm

Which would be 99% of us. More like cleaned out.

Posted by Greg on Mar. 21, 2013 @ 1:42 pm

of the city? What an interesting speculation. Too bad for you thayt we're seeing no evidence of it.

Posted by Guest on Mar. 21, 2013 @ 2:01 pm

There is no bullshit. Only results that can be neasured.

So, somewhere like here, you and I can argue all day long without any resolution.

But in the markets, you take one view, I take another, and only one of us can win, i.e. end up with more money.

That's why I love the markets. Because it doesn't matter what you, I or anyone else says. If, at the end, I have all your money, then I was right and you were wrong.

Posted by Anon on Mar. 20, 2013 @ 2:16 pm

To put it more succinctly.

Posted by Guest on Mar. 21, 2013 @ 6:59 am

But the point remains that cities fight with each other to host these events because of the exposure and benefits.

And just because someone is rich doesn't mean they have to pay for everything.

Posted by Guest on Mar. 20, 2013 @ 12:34 pm

If Moneybags Ellison doesn't want to help the city out, then he should pack his bags and go home. Seems his pockets are deep from the abusive way he's already handled America's Cup finances in his favor. He wants his name out there for all the glory, but isn't willing to help fund it. Most folks are pretty disinterested in the whole AC thing anyway. I love to watch the races, but if it costs one bloody cent for SF, I'd avoid it like the plague.

Posted by SFAnnie on Mar. 20, 2013 @ 10:55 am

I'll second that motion. Ellison get lost

Posted by Jerome on Mar. 20, 2013 @ 11:41 am

The left love it though, apparently.

Posted by Guest on Mar. 20, 2013 @ 12:36 pm

No envy here, just disgust at the arrogance of this wealthy fat cat liar, who wants a free ride at SF taxpayers' expense. LA Times writer Michael Hiltzik nailed it:

"Stop me if you've heard this one: Billionaire comes to City Hall. Says that if the city will get behind him, he'll bring a major sports enterprise to town and might even renovate some decrepit municipal infrastructure as part of the bargain. Huge economic boost foreseen. Won't cost taxpayers a dime." uh huh

http://www.latimes.com/business/la-fi-hiltzik-20130331,0,1294414.column

Posted by Guest on Mar. 31, 2013 @ 12:49 pm

He who has the gold, makes the rules.

As I always say, the city needs billionaires far more than the billionaires need the city. 'Twas ever so.

No poor person ever gave me a job. And no progressive ever asked me what I wanted.

Posted by anon on Mar. 31, 2013 @ 1:11 pm

They should be paying us for the privilege of being allowed to play here.

Posted by marcos on Mar. 20, 2013 @ 11:08 am

'Twas ever so. Just look at the Twitter tax break.

Posted by Guest on Mar. 20, 2013 @ 11:18 am

Then why do the rich spend so much money buying elections?

Posted by marcos on Mar. 20, 2013 @ 11:33 am

in order to balance out the disadvantage of being few in numbers. That is also why SCOTUS made it's Citizens United ruling viewing corporations as persons, for electoral purposes.

Just like how "activists" try and punch above their weight. Nobody is content to rely only on their one vote to achieve change. Everyone tries to use extra-democratic power to influence the result. Including you.

Posted by Guest on Mar. 21, 2013 @ 7:03 am

It needs people with a sense of civic pride and responsibility, that is, people with a conscience concerning their neighbors and their community. It doesn't need some rich outsider to swoop in and make a killing at the expense of the rest of us. Our budget problems are bad enough as it is. Marauders like Ellison can take a hike.

Posted by Jerome on Mar. 20, 2013 @ 11:48 am

an eroding taxbase and teetering on the brink of anarchy and bankruptcy.

Of course, you might prefer that, but most would not.

Posted by Guest on Mar. 20, 2013 @ 12:38 pm

Anarchy yes, bankruptcy, no. San Francisco would do much better with a population that made less than $200K per year than one with too many mega riches.

Posted by marcos on Mar. 20, 2013 @ 12:58 pm

folks, you think we should not? Is that it?

Of course, you have the luxury of playing the envy card while all the time benefitting from the trickle-down effect of all the welthy folks in SF anyway.

Posted by Guest on Mar. 20, 2013 @ 1:11 pm

Can't make the case on the merits, so falls back to "everyone else is doing it."

Posted by marcos on Mar. 20, 2013 @ 1:37 pm

Which system of government do you prefer to democracy?

Posted by Guest on Mar. 20, 2013 @ 1:48 pm

Let's bring in more H-1B visa holders! They're not rich!

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 20, 2013 @ 1:22 pm

Asians, rich folks, christians, cops, conservatives . . oh yeah, and H1-B's.

Posted by Guest on Mar. 20, 2013 @ 1:37 pm

So long as they make < $200K, they're welcome by me.

Posted by marcos on Mar. 20, 2013 @ 1:49 pm
Posted by Guest on Mar. 20, 2013 @ 2:01 pm

Anyone who makes more money than I do is hateful!

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 20, 2013 @ 3:06 pm

the odds that Marcos makes 200k pa is so trivial that it is not worth considering.

Heck, even Obama put the wealthy at 450k per annum, and that is nationwide where costs are less.

Some people have a funny idea of what is wealthy. Lots of couples in SF make 300k pa without having jobs that are anything special.

Posted by Guest on Mar. 20, 2013 @ 3:12 pm

unwelcome overnight, according to your "rule"?

Posted by Guest on Mar. 21, 2013 @ 6:59 am

Jackboot thugs would show up at your house and roust you to Marin or San Mateo where you belong.

Posted by marcos on Mar. 21, 2013 @ 7:22 am
Posted by Guest on Mar. 22, 2013 @ 1:21 pm

Sorry to be the one to inform you of this anon, but Detriot and the Bay Area are not similar, were never similar, and nevel will be similar. This comparison is as idiotic as your comparison of SF to Aspen. No wonder you failed the LSAT and had to resort to the parasitic landlord indstry to make your fortune.

Get a list of the top 500 US corporations and tell me how many have major operations in Detroit and how many in the Bay Area. But since you only spout nonsense that fits your view regardless of the facts (ie, "we need to evict current tenants so I can make more money on my rent-controlled units"), I doubt you'll see any connection. I'd also ask you to compare weather, geographical location, number of world-class universities, and other factors between the two places, but I wouldn't want you to hurt your head by thinking too much.

Posted by Guest on Mar. 20, 2013 @ 1:35 pm

He said they could end up the same if (and only if) SF lost all it's rich people in the way that Detroit did, as the US auto industry hit the dirt.

Point being, nobody needs poor people. They are ten a penny, as it were. It's the big guys that every city wants to attract. It's called a taxbase.

Posted by anon on Mar. 20, 2013 @ 1:47 pm

Why on gawd's green earth does EVERY journalist in this town take every number and from City Hall as gospel?? The AC hotel tax revenue is inflated.

Posted by Guest on Mar. 20, 2013 @ 4:32 pm

SF will benefit from any number of trickle-down cashflows that nobody is in a position to enumerate accurately, but which are consistent with any major global event that brings high-spending visitors into SF.

13 million is peanuts for an event like this, and it is the height of churlishness to whine about it.

As the old saying goes - you have to speculate to accumulate.

Posted by The real Real SF Anti-Stupidity Campaign on Mar. 20, 2013 @ 4:52 pm

Newson made a deal with Ellison that was approved by the Board of stupidvisors, If you believe Ellison should pay for any loss to the City then Newson and the Supervisor should be equally responsible.

Now if the City was to actually make a profit would they then give that profit to Ellison, I think not.

Get Newson and the supervisor to pay their two thirds, then go after Ellison

Posted by Guest oldfart on Mar. 20, 2013 @ 8:32 pm

hand to someone who already pays more taxes than God just because the city has screwed up or miscalculated the odds.

Posted by Guest on Mar. 21, 2013 @ 6:58 am