Waterfront plans dialed back

SAN FRANCISCO -- Organizers of sailing's most prestigious event said Monday they are dramatically scaling back plans to renovate San Francisco's dilapidated waterfront.

Mayor Ed Lee made the announcement during a news conference at San Francisco's Pier 80, where software mogul Larry Ellison is building his space-age catamaran to defend the America's Cup trophy he won in 2010 off the coast of Spain. Ellison picked the San Francisco Bay as the location of the 34th race for the America's Cup, scheduled for September 2013.

After weeks of increasing tensions between the Board of Supervisors and Ellison's representatives over planning for the event, an agreement was reached over the weekend to scrap plans to turn the little-used piers 30 and 32 near San Francisco's downtown into the America's Cup publicly accessible "pit row" that would house racing teams challenging for the trophy.

The plan was for Ellison's race team to spend $55 million on the piers in exchange for rent-free use of them for 66 years and title to a city-owned lot nearby.

Instead, all competitors will be housed at Pier 80, which Ellison has already spent a couple million dollars renovating. But the location is about two miles from the proposed "racing village" that is expected to serve as the event's hub. Pier 80 will still be open to the public, but organizers concede that it may require a bus ride instead of a walk from the racing village to visit.

Nonetheless, Lee and organizers insisted Monday that none of the 50 or so race days leading up to the final weekend of racing in September 2013 or the planned course around Alcatraz island in front of the city's skyline will change. The racing village planned at Piers 27-29 along the heart of the city's waterfront is continuing. The village will be converted into a cruise ship terminal after the America's Cup events.

Lee said the change was made after negotiators concluded they didn't have enough time to solve the financial, environmental and regulatory issues necessary to refurbish the piers in time for the challengers to move in and convert to their headquarters. Training runs can began on the Bay in July. The agreement was also criticized by some supervisors and others as too sweet of a deal for Ellison and the city budget analyst recommended San Francisco share some of the future revenues from the property.

The agreement apparently fell through sometime Sunday. On Sunday afternoon, the mayor's office scheduled a tour and "round table discussion" of the piers Monday morning. But an hour before the tour was to begin the mayor's office called it off and hastily organized the news conference where the changes were announced.

"I don't think there was any one reason," said the mayor, who called the 20 hours of negotiations over the weekend "a sobering discussion."

Now, the city's direct cost to host the event is expected to drop to around $10 million after new estimates are calculated.

So far, three teams have formally entered the competition. Lead Ellison negotiator Stephen Barclay said he expects a few more teams to sign up before the June 1 deadline.

The announcement Monday prompted the postponement of a final Board of Supervisors vote on the financial agreement between the city and Ellison, which had been scheduled for Tuesday. No new date has been set for the board to consider the final agreement, which will have to be redrafted to drop the plans to renovate piers 30 and 32.

The new plan will have to be resubmitted to the board's three-member budget committee, which forwarded the original agreement to the full board last week after two marathon sessions that last a combined 10 hours. While approval was still expected, several supervisors expressed enough misgivings to put the final in doubt.

The original plan started to sink several weeks ago when San Francisco budget analyst Harvey Rose estimated the direct cost of the entire deal to the city to be about $111 million, more than double initial projections. Fundraising efforts designed to defray that expense also got off to a slow start.

Finally, the anticipated number of boats in the race lineup has declined dramatically. Only three syndicates have signed up to challenge Ellison's team, though organizers expect a few more entries by the June 1 deadline to sign up.

Meanwhile, attendance and revenue projections were being debated among the Board of Supervisors with critics maintaining the event won't come close to drawing millions of spectators and generating $1.4 billion for the local economy.

Then, on Friday, former board president Aaron Peskin filed a lawsuit in San Francisco Superior Court seeking to halt the project in the planning stages to conduct another lengthy environmental review. Peskin alleges the initial environmental report, which he planning commission and board of supervisors approved, was flawed.

On Monday, the mayor insisted the initial revenue projections remain in line and that Peskin's lawsuit had nothing to do with the scrapping of the two piers. He did concede that anticipated jobs to refurbish the piers won't materialize, but that new jobs will be needed with the Pier 80 work.

All of the recent naysaying, political opposition and legal action had America's Cup planners and supporters befuddled that the world's third largest global sporting event behind the Olympics and World Cup soccer in terms of economic impact is drawing such vocal opposition.

"I started to get the feeling that people were forgetting how fun this event is going to be," Lee said.