America's Cup economic impact well below projections for San Francisco

Oracle Team USA skipper Jimmy Spithill holds up the Auld Mug as they celebrate in the podium after winning the America's Cup over Emirates Team NZ. Photo / AP

The America's Cup sailing races this year generated far less economic activity in the San Francisco Bay Area than projected, and have cost taxpayers more than $5 million, a newspaper reported.

Draft figures from the Bay Area Council Economic Institute reviewed by the San Francisco Chronicle show the races generated at least $364 million in economic impact. That figure rises to $550 million if the construction of a new cruise ship terminal is factored in.

That is far below the $900 million projected just a few months before the races were set to begin and the $1.4 billion originally estimated in 2010.

Based on figures from Mayor Ed Lee's office, the newspaper also reported the races have cost city taxpayers more than $5 million so far despite private fundraising and a boost in city tax revenue.

The numbers come as Lee prepares to submit a proposal by Dec. 22 to host the next Cup. In a statement, he said the races ``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.''

But Supervisor John Avalos said city money was better spent in outlying neighborhoods such as the one he represents, rather than its waterfront, which was spruced up for the races.

``A $5.5 million deficit, all for a yacht race for billionaires,'' Avalos said. ``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.''

The event faced numerous setbacks, including the death of Olympic gold medal-winning sailor Andrew ``Bart'' Simpson during a training run in May.

The $100 million price tag to compete in the race whittled down the list of competitors. Simpson's death raised concerns about the safety of the race.

Still, the finish was thrilling, with defending champion Oracle Team USA coming back from an 8-1 match deficit to defeat Emirates Team New Zealand.

``While the economic boost fell short of initial expectations, it's definitely worth a modest city investment to generate hundreds of millions of dollars for our local economy,'' said Board of Supervisors President David Chiu. ``The race ended up being pretty exciting, too.''

Russell Coutts, a five-time America's Cup winner who is CEO of Oracle Team USA, said it was a ``very positive experience'' for both the city and the event.

``The economic impact numbers show what the America's Cup can deliver,'' Coutts said. ``San Francisco provided a spectacular venue for racing, and the final was one of the most exciting in the 162-year history of the event.''