Wednesday, December 8, 2010

America's Cup Host City Agreement: Economic Impact Report

BOMA San Francisco Members:

The Controller's Office of Economic Analysis has released its report "America's Cup Host City Agreement: Economic Impact Report."  BOMA San Francisco supports economic development and job growth in San Francisco and, as such, tacitly supports hosting America's Cup in the city.

It's important for our local elected leaders to remain cognizant of the long-term economic and social benefits that this type of event--including the infrastructure improvements that go with it--can do for San Francisco, e.g., international exposure and an accretion in tourist visits to our fair city, increased patronage of San Francisco's small businesses and sales tax revenue to fund city programs, and long-term employment opportunities for city residents.

Main Conclusions

Holding the America’s Cup in San Francisco will generate a positive impact on spending and employment, as detailed by the Beacon Economics report, and confirmed by other City departments. The event will also generate hotel, sales, and other tax revenue for the City.

The City would incur costs preparing for, and providing service during, the event that exceed the tax revenues generated by the event.

However, both the Original Host City Agreement (HCA) and the Northern Waterfront alternative will enable the redevelopment of Port property which would otherwise not occur. This redevelopment will generate possessory interest, payroll, and sales tax for the City.

Because of this redevelopment, on a Net Present Value basis, the fiscal impact to the City is positive under either scenario.

The Original HCA offers greater development risk, greater up-front City costs, and potentially higher long-term tax revenues. The Northern Waterfront alternative features less up-front City cost, less redevelopment, and less long-term tax revenue growth.

Click here for the full report.

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