tv [untitled] October 10, 2010 5:00pm-5:30pm PST
mail earlier this afternoon, or sent april on my staff is female. as i mentioned to you on the phone, we do not yet have solid answers to supervisor daly's questions about the impact. i took the liberty to try to make my own spreadsheet. i am trying to figure this out. i have chaired the budget here for a couple of times, so i know how to use excel. i know how to open it up and put some numbers in. this is my guess for what is going on at our level for this bid. i could be wrong. i have not gotten answers to my questions. in terms of answers and non answers, america's cup has lots of questions and responses. questions were answered by the
city attorney as to whether chapter 29 applies. it looks like it does, but perhaps not yet. we will have to make a finding at the board of supervisors before planning decides the ceqa application is complete. i assume that will be coming soon if this application passes. the planned $7 million of corporate sponsorship, we do not know. the $150 million in the structure they are asking -- is that included in the 270 figure or not? we do not know. will we be recent burst for staff times -- reimbursed for staff times of city employees? we believe it will be another $2 million for taxes and items in the term sheet, which i assumed
-- i am not sure what will be included in that $32 million. the staff are not really sure either. what are the costs to the port? we do not know. future infrastructure, financing mechanisms, actual cost for work at pier 80 -- this may or may not be in the $25 million of infrastructure work. pier 50 -- the cost of accommodating super kyats -- yachts, we do not know. there is an attachment of $890 million. i do not know if that is one year or what. we are not sure on that. the breakdown of the total city
costs for america's cup -- we can take a look at that in the budget i prepared. is the city liable for ceqa preparation, yes. the cost of that document? i am not sure. is that $32 billion going to be raised before the 270? is the city protected first or mr. ellison protected first? do not know. for those of you who follow south beach development policy, you know that is the one that is worth something. it is actually on land. there is that title trust issue. in this term sheet, there is a title and trust swap. what program are we going to put
on that? we do not know. what is the value of that parcel? we do not know. piers 30 and 32, when improved or fixed, approximately $45 million. plans to sell any of the parcels -- we do not know. maybe ms. moyer -- supervisor mirkarimi asked about waterfront plans and she may be deflected. how will the board of supervisors make a decision without a budget analyst report or ceqa documents? we apparently can do that, but i do not know whether it is advisable. there is no response. if you flip over to the america's cup impact on the san francisco general fund, this is
my best estimate. this is taken from four or five different sources, including the committee meeting yesterday, the resolution in terms sheet in front of us. we have some revenues. an increase in hotel tax -- trochophore dollars million from the study. the payroll tax increase -- $8.40 million. -- an increase in hotel tax -- $14.40 million from the study. the cost to the city for police or security, transport, and recreation facilities during the event -- $11 million. i am not sure their methodology, but that was in the study.
a figure of $32 million was mentioned in committee yesterday, which referenced the fees, the improvements, and the utilities. those were also reflective of revenue. i am not sure the assurances of that. i have looked on the revenue side as well. the court identified infrastructure work. the advertising revenue is $892,000. that is an attachment in our package. they said that are not sure about that. they do not know about the value of the legacy leases or the losses. i know the piers are not sure how much revenue loss. i believe it is $10 million per year. we got that to the budget office from port staff. if we lose revenues in a four
your time, i am not sure how to reflect that. i went with a four year time period of loss at $40 million. port relocation facilities on pier 50, we do not know. temporary berthing of super yachts, i do not know. the swap of seawall lot 330, we do not know. the financing may be included in the $32 million. i do not know. reimbursements to event authorities, helipad -- maybe that is included in the $325 million. maybe it is included in the $35 million. i do not know, i do not know, i do not know. it seems to me that colleagues and staff do not know the answers to these questions. so we are being asked on a
committee meeting at monday and a board of supervisors' meeting the following tuesday to approve a term sheet. i have negotiated a couple of term sheets. a negotiated a term sheet on treasure island late into the night. the conditions have changed. but typically, term sheets that come in front of the sport have these types of questions answered. there are hard numbers associated with the terms. and i realize that mr. ellison is on a truncated timeline, but i think that in terms of our last, best vote on this item, and there are more legally binding votes, but let us be clear -- it is going to be very hard to cast a vote against this once this vote is cast and
once san francisco is selected as a host city. it would be really nice to have answers to these questions. i know that yesterday i talked a lot about process and there was sort of a he-said, she-said about my office. all of my records had been scoured. there is no record of the mayor's office asking to meet with me on the america's cup. we have sunshine at the mayor's office -- we have sunshined the mayor's office to ask if they have a record of asking me. that is all of the window. the mayor's office thinks i do not exist. so what? let us take a look at the package. we have a massive problem in front of us. we have a lot of variables in the equation and a lot of
unanswered questions. sometimes, when you start talking about things, folks to hear what you're saying start giving you additional things. colleagues, i have passed out an article for you from "bloomberg business week." typically, i do not pass out articles from "bloomberg business week." i also have an article from the cnn money section, which i usually do not focus on. the article from bloomberg is that sponsors are a billionaire view. if you do not know the history of the last america's cup or how bmw/oracle wrestled -- that is something you say when you take
the cup from one yacht club to another yacht club. they wrestled the cup from berkshire rally -- from berterelli's. he is roman but he lives in switzerland and sales of valencia, spain. he is an interesting european guy. he wrestled the cup from australia. there were some legal issues around that, i think. then, alison, who was the challenger, and berterelli -- they are all millionaires. ellison may be the sixth wealthiest man and berterelli may have been the 28th will be this man in the world. they got engaged in a protracted legal battle over the terms of the passing of this cut in valencia.
i guess supervisor ross knows about this stuff better than most, being from rhode island, but i am on a learning curve and trying to educate myself as much as possible. apparently, the challenger -- while the defenders sets the rules, there is a process by which the challenger, the first or first person who makes the challenge after the america's cup is one -- the challenger has certain rights to take issue to make sure the regatta sales. -- ails. -- sails. i never knew i would know this much or be this interested in sailing.
what happened was a nasty three- year legal battle. in the end, apparently the folks in new york in the 1800's and must be pretty smart. in the end, if all else failed, the best three regatta -- two out of three winner takes the cup. maybe this is what mr. ellison wanted the whole time through his legal challenges. this cut out a lot of qualifying regattas or a lot of the work out of it. last time, in valencia, the lawyers are the ones that figured out the preliminary rounds. oracle took two out of three, took the first two in the event.
the outcome of that for valencia was a huge loss in revenues. apparently, they could not even sell the tv contract on it. they were giving it away free on the internet. at an event where according to the $270 million figure, an event that had previously cost somewhere in that neighborhood, at 230 million euros in 2007, it cost $11 million, not including the cost of the most expensive boat ever built or the most expensive legal battle in sailing history. but the cost of putting on two
races was 8 million euros. that was the last america's cup. i guess a question to staff -- i am not even sure who the challenger is for 2013. what happens if there are not perks? there are some yacht clubs who are choosing not to participate in this one because of this very issue, because of the nasty history of the last america's cup. i understand that a lot of questions have not been answered and there are a lot of variables. but what happens if we move forward with our didn't -- our bid and the oldest sports competition -- what happens if it ends up in the courtroom steps?
and, by the way if you have any answers to my other questions, i can give these to you. i just gave them to my colleagues. please educate me. >> i am the director of the office of economic and work force development. we would welcome answering. many of the questions you have put forward -- to be clear, you have before you today the resolution asking the board of supervisors to endorse a non- binding term sheet. the term sheet essentially calls the question on whether or not the city family wants to move forward in its negotiations or discussions with the america's cup committee on the city pursuing a bid in order to cause
the america's cup. as you know, we are the only city chosen in the united states to be considered. we are competing against the country's italy and spain. we believe the term sheet represents the outlines of the potential offered we would be bringing back before you for a vote that would bind the city in form of a hosting agreement. we are very cognizant we are asking you for a lot of support around three broad concepts. one is the intention to use certain port assets that require approximately $150 million of infrastructure in exchange for the investment that would be made by the america's cup team. that is not part of the $270 million that would be raised in corporate sponsorship. i can explain them more. in exchange for $150 million of
infrastructure investments to use certain assets for the america's cup program, we would in turn give the america's cup long-term leases in order to have them recoup the cost incurred on our assets. the other is you introducing the concept of creating a nonprofit entity, the america's cup organizing committee, that would be responsible for raising, in conjunction with the authority, corporate sponsorship. in addition, there would be obligated to raise $332 million that would be used to backstop and pay for city costs that are anticipated in the term sheet. that is things like environmental review and pulling permits. lastly, the third thing that the america's cup committee has asked us to look at is
consistency and coordination between federal, state, and local agencies. they are asking us to commit to making this event feasible giving the -- given the multi- jurisdictional qualities. we are aware there are a lot of fiscal qualities that need to be fleshed out before we would come to you with a binding agreement. we have a broad stroke overview of why we think this is a good deal for the city. rich hill from my office is prepared to talk about some of that an answer specific questions we did not go over at the hearing yesterday. supervisor daly: i was at the hearing for a little while and then i had to go, but i watched the hearing on sfgtv video on demand. it is handy. i appreciate the answer to one question which you just answered
-- the $150 million in infrastructure costs is not separate from the $750 million. i did learn about the 21 $32 million in addition to the $270 million. i did learn about the 232 -- i did learn about the $232 million in addition to the $270 million. i dummied up this budget on general fund impacts. ultimately, the bottom line of almost $53 million negative impact on the city's general fund -- maybe that number is incorrect if, for example, any of the port infrastructure work is included in that $233 million figure yesterday. that is the first heard of that
figure. there is language in the term sheet about taxes and fees. this will come out of it. i assume some of the ceqa costs will come out of that 232. i am not sure about the study commissioned about what is included in the $11 million in terms of the cost of running the city when a major event is in town and what that adds and takes out of the city in terms of the cost of providing the muni services, rec and park services, police services, etc. i am just trying to get a spreadsheet, so i made one. you can borrow my electronic version and fixed it for me.
>> we did the same analysis. i apologize. the numbers were there yesterday. they may not have been all in one place. it is similar to the analysis you did, supervisor. we took on the same thing and showed somewhat the opposite. there will be somewhere between $30 million and $60 million of net benefit. i think we agree the hotel sales payroll tax is somewhere between $19 million and $22 million. we think those numbers are conservative. we think hotel rates will go up. >> but in your term sheet there is the agreement that we will work with the business bureau to make sure that the lowest discounted hotel rates, the best convention rate specifically, are available.
>> we recommend $19 million to $23 million for general fund increases. what i do not think is included in your spreadsheet is we are projecting the event of authority to have a negative value. supervisor daly: i know you do not hang out in budget and finance as much as you do in some other committees, but this is an analysis for the general fund. the port is an enterprise department. i understand it is all one city. i understand it is everyone's property and money. this is specifically focused on the impact on the general fund,
which we do give a good bit of attention in budget and finance, because it is where the more discretionary dollars are. it is a bit of a taking of the temperature. i understand there is a port fund and there are liabilities. there are some potential upsides to dealing with a huge potential liability in terms of the port. this spreadsheet is aimed at figuring the impact on the general fund, which is separate from the port budget. >> it looks like you included the $40 million of revenues and the costs of the port infrastructure work. supervisor daly: the reason why i included that is because of language. maybe that 40 is too high
because the revenue into the city is not that much. maybe that 40 should come down to the 24 figure because of language through that charter provision where there can be an intra-departmental thing. i heard you were interested in keeping the port hole and perhaps using that provision for interdepartmental transfer to make sure the port was able to capture from the city the delta at in terms of increased revenues to the city. let me go ahead and make a correction. if everybody can cross out that party, i was not thinking. that should be 24, because that is all the income i have reflected into the general fund from this event in terms of hotel, payroll, and sales tax. i do not think the port or city revenue authority should do the
transfer of more money than what is generated through this activity, to that charter section. let us make that 40 to 42. that 108 has turned into 92, and the 52 goes down to 36. that is better. this is helpful. this is what i like. >> we could take our analysis and just use the general fund. it is kind of a mess. hotel sales in payroll taxes -- we are going to give 24. >> your number is there.
supervisor daly: i just took that right out of the report. >> we think the city service costs are somewhere between $8 million and $12 million. we do not know exactly what this event looks like. if you look at the pga tournament, which conservatively estimate that to be somewhere in the neighborhood of $8 million to $12 million. we are asking to be reimbursed for $32 million of costs. that gets us in the neighborhood of $52 million in costs -- excuse me. $50 million in revenue. $12 million in costs. we thought it was accurate to include port revenue and costs since they will be impacted. we think it is hard for the
board to absorb. >> one of my questions is what is included in the $32 million. what is in front of us today in terms of the term sheet -- what is specifically mentioned as the city's responsibility, i think in conjunction, are specifically the taxes, and the fixtures of fees, the utilities. those were the items where it was delineated that san francisco was going to be on the hook. that seemed to be what mr. mcclellan was talking about yesterday in terms of reimbursement. i am wondering if there is more
included in that 32 and what the budget for that 32 is. >> that will reimburse the city for any and all staff costs. it is to reimburse the city for our normal costs for hosting this event. we are including in that number as revenue beyond that the $20 million in general fund tax revenue to give us $5 million in revenue. supervisor daly: but not the capital work on the piers? >> we could include the port numbers in here and get this thing resolved. supervisor daly: then i am double counting. i just did not know what was included in that 32. i will take out the 11th from the police. we can mark that out. 92 then becomes