America's Cup: Boon or Bane to San Francisco's Economy?

(BCN) After Oracle Team USA's comeback victory Wednesday in the America's Cup, the business community is calling the sailing race an economic victory.

Based on a vendor relationship that continued until Wednesday, when Oracle pulled off its eighth consecutive win to trump Emirates Team New Zealand, Bob Linscheid, president and CEO of the San Francisco Chamber of Commerce, said overall "the America's Cup competition was of great value to San Francisco."

The San Francisco Chamber of Commerce had a business relationship with race organizers, with several local businesses partnering with the races for longer than the past year.

He said local businesses -- including hotels, restaurants, food wholesalers and other suppliers -- were boosted by all aspects of the race. He also cited 2,000 new jobs created for the race, with about half of those going to city residents.

The hospitality industry saw a boon, with many waterfront hotels reporting full capacity from Sept. 7 until the final race.

Oracle came back from an 8-1 deficit, eventually pushing the teams into a winner-take-all race.

"A critical mass was building, crescendoing into the finals," Linscheid said.

Out-of-town visitors, including thousands of New Zealanders, filled the city and showcased San Francisco as a tourist destination,  Linscheid said. He said the long-term benefits are numerous.

The attractive backdrop of the city's skyline, Alcatraz Island, Golden Gate and Bay bridges and other sights televised during the races also promoted the city and will likely encourage more visitors, Linscheid said.

He also said the races are considered a benefit because they jump-started construction on the cruise terminal at Pier 27 and revitalized a large swath of the waterfront.

Although the business group has not taken an official position on the possibility of the America's Cup returning to San Francisco, Linscheid said the excitement garnered in the final week of the races is the impetus for the possibility of hosting again.

He said he's spoken with Mayor Ed Lee and various city supervisors who are onboard to discuss another go at the races.

Lee acknowledged last week that the races have not drawn as much interest or economic impact as originally predicted.

Projections back in 2010 estimated the races would bring in as much as $1.4 billion to the host city. That number has since been scaled back.

Lee said private fundraising efforts to offset San Francisco's costs for the races have fallen short, leaving the city currently on the hook  for around $4 million from its general fund. However, he said that number could end up going down, since the city's costs have also not been as large as previously planned due to the  lower turnouts.

"I think there were pretty high expectations at the beginning, and certainly the races have fallen short of that," said Supervisor Mark Farrell, whose district includes Marina Green, where much of the America's Cup activity has taken place.

"That being said, everyone who has gone to the races, and that's been a part of it, loves the experience, so it's been a great thing," Farrell  said.

As to a repeat appearance of the races on the San Francisco Bay, Oracle team owner Larry Ellison mentioned that as a possibility in media interviews since the win.

Officially, race officials said future competition plans are unknown. Ellison said he would make an announcement "in the near future" about the boats to be raced in the next America's Cup, the venue and the timing.

The 72-foot catamarans were a change to the race, and they were criticized for shutting out other contenders who could not afford the expensive equipment. Ultimately, four teams competed in this year's America's Cup, much less than the anticipated 15-boat race expected to come to San Francisco.

Linscheid said an economic impact report of the race is expected to be released in the coming months.