When San Francisco was chosen in January 2011 to host the 2013 America’s Cup sailing event, optimistic supporters projected 8,000 new jobs and the infusion of $1.2 billion into the local economy.

But fund-raising efforts have come up short and the city is reportedly looking at being left on the hook for $20 million. Mayor Ed Lee is talking about scaling back the 55-day event that concludes with the sailing finals in September. He is considering offering naming rights to potential wealthy donors and is enlisting the help of Senator Dianne Feinstein, House Minority Leader Nancy Pelosi and Lieutenant Governor (and former S.F. Mayor) Gavin Newsom to cover the looming shortfall.

The America’s Cup Organizing Committee had pledged to raise $34 million for security, cleanup and other municipal expenses, but has come up with only $14 million. San Francisco County Supervisor John Avalos called it a “fiasco.”

“We all bought into the pledge and now we’re seeing that the America’s Cup Organizing Committee hasn’t lived up to its pledge,” the San Francisco Chronicle reported Avalos as saying. “I think we have been taken in terms of what we’re getting for the city.”

It was originally anticipated that 14 international sailing teams would compete in the race, but that number has dwindled to three. The depressed world economy and a switch from sloops to catamarans caused several candidates to drop out. While that has reduced expected expenses, it has also reduced the amount of money raised from corporate sponsors.

A group of waterfront residents called the Telegraph Hill Dwellers, who have been active in monitoring the city’s efforts, have demanded a county Board of Supervisors hearing to review what it considers questionable ethics that may have contributed to the fund-raising problems. A letter to the board by group President Jon Golinger singles out Kyri McClellan for criticism. McClellan was allowed by the board, with the blessing of the San Francisco Ethics Commission, to switch from working as the mayor’s America’s Cup chief negotiator to a private role working for the America’s Cup Organizing Committee.

“The twin dangers of reduced accountability and lax scrutiny that stem from this kind of ‘revolving door’ between government and the private sector are precisely what the ethics laws that were summarily waived were put in place to prevent,” Golinger wrote.

–Ken Broder  

To Learn More:

America's Cup Could Cost S.F. Millions (by Phillip Matier and Andrew Ross, San Francisco Chronicle)

Hearing Called on America's Cup “Fundraising Fiasco” as Mayor Lee Talks About Scaling Back the Event (by Steven T. Jones, San Francisco Bay Guardian)

America's Cup Planners Should Make Concessions Now (by John King, San Francisco Chronicle)