America’s Cup. The huge, worldwide event that that whole world cares about, except for people in the United States. Sure, a lot of locals uber’d down to the waterfront to look at the pretty boats and catch some great concerts including Sting, Counting Crows, Imagine Dragons and the Lumineers, but overall the interest seemed lackluster at best. Hotels expecting sellouts and homeowners who were planning on covering their mortgage with affluent Aribnb tenants were nothing but disappointed with the lack of visitors.
Larry Ellison is well known for doing things in a big way and the grand production and unbelievable come-from-behind victory were definitely in line with the expectations that were set. However, now that the event has passed, we can really dive into the economic impact and level of success that the event brought to San Francisco.
“San Francisco is still in the red from hosting the 34th America’s Cup, which so far has cost taxpayers at least $5.5 million, according to draft financial figures from the regatta that The Chronicle reviewed Monday.” (sfgate)
Bringing over 700,ooo people to the event over the 3 big months of the event (we’re still not really sure how long this whole thing was), the estimated economic impact on the San Francisco Economy was $364 Million. The most recent projected Revenue was $902 million, which was down from the original $1.4 Billion Economic Boost project in 2010. Yes, you read that correctly.
Without taking into account any long term effects on tourism, job creation and any other factors that could result from the exposure that San Francisco received from the event; San Francisco’s hosting of America’s Cup can easily be considered a failure. Any business that forecasted a $1.4B quarter and ended up with $364 would be criticized and it seems like America’s Cup should be, too. It wasn’t all bad, though. According to Mayor Ed Lee, The Cup “showcased our beautiful city to the world and brought thousands of new jobs, long-overdue legacy waterfront improvements, international visitor spending, and a boost to our regional economy,” Plus, we got a cool trophy…
“A $5.5 million deficit, all for a yacht race for billionaires,” said Supervisor John Avalos, who sees things a bit differently. “The whole event has been nothing more than a stupefying spectacle of how this city works for the top 1 percent on everyone else’s dime.” His thoughts? Spend the money on improving city services on outlying neighborhoods. Education would also be a great choice. Funding school music and athletic programs would have a much greater impact on children and the city in general.
As a comparison, The Democratic National Convention in Charlotte, N.C., last year infused nearly $164 million into the economy, according to a report by consultant Tourism Economics, and The New Orleans Business Alliance said hosting the last Super Bowl had an impact of roughly $430 million.
From SF Gate:
|2010 Projections||March 2013 Revisions||Current Figures|
|Economic activity generated in the Bay Area||$1.4 billion||$902 million||$550 million|
|Jobs created (direct and indirect)||8,839||6,481||3,800|
|Spectators over three months of racing||2.7 million||2 million||706,000|
|Costs to city’s general fund to host races*||$32 million||$22.5 million||$20.7 million|
|New hotel, payroll and retail tax revenue for city||$24 million||$13 million||$6.6 million|
* Does not include more than $180 million spent on long-planned city infrastructure projects completed to coincide with the regatta, including partial completion of a cruise ship terminal on Pier 27. The terminal is factored in, though, in the jobs, tax and economic impact categories.
So what’s next?
The winners of America’s Cup get to choose the next location, so Ed Lee has already begun to draft the paperwork to bring it back to San Francisco. Second time’s a charm?