Analysts: America's Cup delivered legacy transit and green gains but fell far short of projected economic windfall

The Budget and Legislative Analyst told the Board’s Budget & Finance Subcommittee on March 5 that the city's hosting of the 34th America's Cup produced notable legacy benefits—transportation improvements, environmental mitigations and vendor opportunities—but also resulted in revenues and reimbursements well short of early projections and a net fiscal loss to the city.

Budget analyst Ms. Campbell summarized the city’s review of the Office of Economic and Workforce Development’s (OEWD) commissioned economic analysis and city department expenditures. The Bay Area Council/Beacon Economics pre‑event projection (circa 2010) was approximately $1.3–$1.4 billion and estimated about 8,800 jobs; the city's post‑event accounting measured about $364,400,000 in economic activity and estimated roughly 2,800 jobs. The analysts reported a city net loss of about $11,500,000 (near $6,000,000 general fund loss and $5,500,000 port fund loss) after accounting for departmental expenditures, port reimbursements and tax revenues.

Ms. Campbell told supervisors the America's Cup organizing committee reimbursed the city roughly $8.6 million (well short of a $32 million fundraising goal), and tax revenues tied to the event were estimated at about $5.8 million (hotel, parking, payroll, sales). She said private contracts with the event authority fell outside the city's administrative code enforcement—so prevailing‑wage, local‑hire and small‑business inclusion tracking were weaker than for city contracts. As a result, OEWD and the analysts could not fully verify many small‑business participation targets for 2012; 2013 data showed stronger compliance on some event‑management contracts but installation contracts and disadvantaged‑hire goals were incomplete or unmet.

OEWD Director Mike Martin responded that the city captured important legacy benefits—cruise‑terminal upgrades, shore‑power installation, eelgrass‑friendly moorings, and an award‑winning environmental impact review—and said that including certain capital projects (for example, cruise terminal work) raises comparable impact metrics (to roughly $550 million and several thousand more jobs) if counted as part of event infrastructure. He also highlighted transportation successes: augmented transit lines, substantial bicycle valet use (over 7,400 bikes parked at valet locations), and special‑events Muni coordination.

Supervisors and presenters agreed on key recommendations: future host agreements should require payment for use of city property and stronger, enforceable monitoring and reporting provisions for workforce and small‑business inclusion; contracting language should clarify prevailing‑wage and local‑hire responsibilities and require data reporting that OEWD can verify in real time. Supervisors also urged that any future negotiations with Oracle Racing/event stakeholders include clearer commitments to offset city costs and improve enforceability.

During public comment, a wide range of businesses, union representatives and contractors testified about mixed outcomes: unions cited recovered back wages (about $406,000) and enforcement actions; hotels, restaurateurs, security firms and other vendors said they saw concrete revenue and hiring benefits; OEWD and the port highlighted examples of LBE participation on port capital projects. After discussion, the committee voted to file the hearing with the analysts’ recommendations and directed staff to use lessons learned in future negotiations.