America’s cup: What does Larry get?

The development agreement for the America’s Cup comes out next week, although the project is already under way. But there’s some concern that the number of visitors (and thus the revenue to the city) might not be as high as projected.

The project EIR is more conservative about the possible number of visitors than city officials had been at first, and now the Bay Citizen reports that “doubts are growing about the number of spectators who will actually come to the city this year and next.” Apparently the prelims in San Diego have been a bit of a bust — and there aren’t as many teams signing up for the challenge.

So here’s the question: If the city winds up taking in less money than expected, does Larry Ellison take a bath, too?

Of course, it’s not that simple: Ellison’s getting a lot from the city, but it’s not based on any revenue the city will get from the cup; it’s based on the investment he’s putting into the port. He’s getting a sweet deal from San Francisco — way too sweet in my mind. The guy’s the sixth-richest person in the world; he doesn’t need all the goodies the city’s handing over, and I’m not sure I want the arrogant, aggressive CEO of Oracle determining the future of a large part of the San Francisco waterfront. But in theory, since he’s renovating property that’s falling apart, he gets something in return.

And, as Jane Sullivan, the spokesperson for the America’s Cup project at City Hall, points out, the fewer the visitors, the lower the city’s costs.

She also told me that “we don’t think the number of competitors will affect the number of visitors,” which is probably true — people will come for the spectacle, and Oracle will hype it beyond imagination, and nobody knows who any of these other teams are anyway. (The one team that might have gotten some press, aside from Oracle, wasn’t allowed to put in an application.)

But here’s the thing: This entire project, and the motivation to give Larry Ellison a bunch of really valuable city property, was the economic impact the cup is supposed to have on the city. The Mayor’s Office has been throwing around numbers like $1.4 billion in economic impact — that’s new jobs, full hotel rooms, packed restaurants, spillover employment benefits — and, of course, more tax revenue to the city coffers.

What it we give away the store to the Oracle pirates and we wind up getting a lot less money than we were hoping for? Nothing against the Cup; I love boats, and I love a big party (although I try to make sure that when the party’s over, I’m not completely broke). But it seems to me that the city’s the only one taking the risk on the downside. Larry gets everything he wants no matter how this all turns out.

We won’t know all the details until we see the agreement, but am I the only one worried about this?