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Analyst Expects Big Price Tag If San Francisco Hosts America’s Cup

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America's Cup sailing race

US challenger BMW Oracle Racing (L) giant trimaran and Swiss defender Alinghi huge catamaran sail at the start of the opening race of the 33rd America’s Cup off Valencia’s coast on February 12, 2010 in Valencia, Spain. (Manuel Queimadelos Alonso/Getty Images)

SAN FRANCISCO (KCBS/AP) – A new report suggested that San Francisco’s economy would get a $1.2 billion boost if the city hosted the America’s Cup sailing contest. But, according to that same report by Board of Supervisors Budget Analyst Harvey Rose, there would also be significant costs to city coffers.

KCBS’ Barbara Taylor Reports:

Rose’s report, released Thursday, suggested that the city’s direct cost of hosting the event would be $42 million. Rose estimated San Francisco would lose another $86 million from granting race organizers development rights and leases to waterfront property.

Rose executed the audit at the request of a skeptical supervisor Chris Daly.

SF Chronicle Reporter John Cote discusses the issue with KCBS:

“Certainly an upside in terms of general economic effect, but I think that the cost to local government is dangerously high,” he warned. “And the way that they are able to justify to you is they wrap it up in this euphoria of San Francisco and sailboats that are pretty.”

Mayor Gavin Newsom’s office, which stood firmly behind the city’s bid, said the budget analyst failed to account for the decrepit condition of the waterfront property and private funds that will reduce the city’s direct costs.

“We’ve always known that hosting the America’s Cup would have some costs to the city and we think they are costs well worth it, given all the economic benefits,” reasoned Newsom spokesman Tony Winnicker. “The direct city costs in the report are not inconsistent or out of line with what we would expect for an event this size. I mean, you look at World Cup, you look at Olympics.”

San Francisco appeared to be the front-runner to host the race in 2013.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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