America's Cup 2017:
San Diego's Bid


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What Might Have Been: San Diego's Bid to Host the 2017 America's Cup
Conversation with San Diego YC Commodore John Laun

January 15, 2015



San Diego saluting BMWOR's trimaran USA-17, next to replica of schooner yacht America
Photo: ©2009 Gilles Martin-Raget/BMW Oracle Racing
 

 
John Laun.
Image: ©Tim Mantoani/SDYC
 
 

Now that the dust has settled on the venue choice for the 35th America’s Cup, CupInfo takes a look at San Diego’s runner up bid – what went right, what went wrong and what might have been.

John Laun, President and CEO of Sailing Events Association San Diego (SEA San Diego), was an integral part of San Diego’s consideration process.  Laun, the owner/driver of the locally raced J120 caper as well as the recently-named Commodore of the San Diego Yacht Club, takes us through the process from his perspective. 

It all started with a phone call a little over a year ago.

“Malin Burnham got a call from Russell Coutts asking if San Diego would like to be considered as a venue,” said Laun.  “Russell had been working with San Francisco and they had gotten a preliminary response from the mayor.  It wasn’t everything they had hoped for, so he started thinking about alternatives.”

San Diego has a rich America's Cup history, having hosted successful defenses in 1988 and 1992, as well as the dominating Kiwi victory in 1995.  More recently in 2011 Laun and SEA San Diego coordinated an RC44 regatta and an America’s Cup World Series event, so the machinery to pursue another America’s Cup was already in place.  Coutts provided the San Diego contingent with an idea of the infrastructure requirements both on and off the water, and the San Diego team went to work.

Members of the task force included Laun; Chuck Nichols, Chairman of SEA San Diego; Tim Kelley, Executive VP and marine engineering expert; Sharon Cloward, President of the Port Tenants Association; Jeff Brown, President of JK3 Yachts; and Troy Sears, owner of Next Level Sailing.

“Troy’s son Tom had just graduated from USC’s architecture school, so he did the venue layout CAD work,” Laun said.  “We had the bases fitting the original spec, which was intended for the defender and four challengers who would make it to the final venue.  The schematic included superyacht berths, the AC Village and a concert venue, all in the Embarcadero area of downtown San Diego.  We had room for bleachers, spectator areas, interactive areas, hospitality, and VIP hospitality on the flight deck of the USS Midway.  It’s an amazing stadium; there would have been views of the action on the whole course from all over the harbor. 

“Added to the original spec was a long-term base for the Oracle team to use for training in advance of the Cup.  We then went to the Port Commissioners, to let them know we had scoped out the required spec and to find out if there was interest, and we got a very enthusiastic response.”
 

America's Cup World Series fleet racing in San Diego from October, 2011.
Photos(2): ©2011 Gilles Martin-Raget/ACEA
 

The RFI

SEA San Diego replied to Coutts, indicating that San Diego could indeed meet the spec and that they were interested in continuing the process.  The America’s Cup Event Authority (ACEA) sent out Requests for Information (RFI) to several cities (Laun heard 12 cities received the requests, but only knows the identities of the four finalists).  The RFI sought very specific information about the venue, including the infrastructure and the water-based requirements.  The RFI also asked for details about the host city candidates, such as hotels, the airport, all the transit operations, restaurants and attractions, as well as specifics about cooperation with all the entities involved in San Diego Bay: Coast Guard, Navy, Customs and Border Protection, and FAA among others.  For the SEA San Diego team, it was all the same information and same players they’d coordinated in order to successfully hold the ACWS event three years earlier.

“We knew that San Diego was being labeled a ‘light wind venue’ and I suppose next to San Francisco, we are,” Laun said.  “But we had historical weather data from a weather station on North Island indicating that the breeze was very reliable, which is critical for TV broadcast schedules -- more than eight knots 91 percent of the time during the broadcast window.  Jeff Brown put a weather station on a boat in the middle of the race course for two weeks so we had data that could be used to calibrate the years of weather station data to actual course conditions.  Julian di Biase from ACEA and the Oracle weather team analyzed all that data.  From our standpoint, we had everything we needed to host a successful America’s Cup.

“The Port of San Diego responded to the RFI in March, after analysis of the financial benefits (theirs and regionally) and also their costs to provide the facilities (potential lost revenue), some minor improvements, permitting, and services such as Harbor Police.  Then, we all watched as one by one, San Diego’s competitors were eliminated.  As the summer continued, first San Francisco, then Chicago were taken off the list of potential venues, leaving San Diego and Bermuda to vie for the chance to host AC35.  The Port was then requested to take the next step to turn the details of the RFI response commitments into the Host Venue Agreement language.”
 

San Diego welcoming the America's Cup back after BMW Oracle Racing's victory in 2010. Image: ©2010 Jim Swintal
 

The Host Venue Agreement

“The Port was the lead for the Host Venue Agreement drafting with ACEA, soliciting support from the City of San Diego, the County and other entities that would be involved in the infrastructure and services required.  The Port commissioners, representing the five cities that border San Diego Bay, developed the negotiating positions on the key details remaining.  The Port desired to keep the negotiations confidential, so by California law, only the negotiating parties (Port Commissioners and Port staff) could know the details.  Our team was briefed informally and we offered suggestions and opinions from time to time, but we have not seen the actual documents or participated in the Host Venue Agreement discussions with ACEA.

“Our team handled all the community and support issues, garnering letters of support and promises of potential activities in support of the Cup from agencies such as the San Diego Economic Development Corporation, the Chamber of Commerce, the Tourism Authority, etc.  San Diego Mayor Kevin Faulconer was an early advocate, and we met personally with most of the City Council members, [who] passed a unanimous resolution in support of the hosting the Cup, as did the County Supervisors.”

Laun was pleased with the degree of enthusiasm from commercial interests across San Diego and feels that sponsorship support would have come from every sector of local business -- despite the inherent initial uncertainty in trying to solicit sponsors for an event that might or might not happen.

“We received enthusiastic support from all over San Diego, including from the San Diego Padres,” Laun said. “The Padres were prepared to provide event management services, ticketing, cross promotion -- a whole family of things.  The Padres were more than willing to do as much, if not more, than the Giants did during the last Cup and they were a delight to deal with. 

“We reached out to local companies for corporate sponsorship, providing introductions and facilitating discussions for ACEA, but the responsibility for signing and closing the sponsorship deals was with the ACEA.  We were a party to almost all the communications but in the end, it would have been their deals. 

“ACEA was in final negotiations with what would have been a Tier Two sponsor, had we gotten the Cup -- and that’s a big deal for San Diego, since there aren’t that many corporate headquarters here.  We lined up a number of Tier Three and Four sponsors, some in-kind, some cash.  All, of course, contingent upon San Diego being selected as the venue.”

While several key ACEA and Oracle Team USA (OTUSA) members were part of the selection process (including Julien di Biase, OTUSA’s facilities and logistics manager; Steven Roberts on commercial interests; and Sam Hollis on contracts), Russell Coutts remained part of the negotiations every step of the way.

“Russell came out here three or four times and met with key potential sponsors and met with the City and Port.  When Russell came to town, he generally had many meetings, political and commercial as well as with the Port.  People questioned whether we could fit the America’s Cup in the harbor, but Russell Coutts and Jimmy Spithill seemed to think it would fit just fine.”
 

Accepting the key to the city in 2010.
Image: ©2010 Jim Swintal
 
BMW Oracle team celebration onboard USS Midway.
Photo:©2011 Gilles Martin-Raget/BMW Oracle Racing
 

The Choice is Made

Laun admits to being somewhat shocked when word leaked out that Bermuda had earned the nod as the AC35 venue.

“We now know that San Diego did not put up anything near the kind of financial commitment that Bermuda did, but I think we met or came very close to ACEA’s requirements.  I do suspect that some parts of the Port’s bid were contingent upon environmental permits.  That kind of uncertainty is not good -- and San Diego does have a history of litigating environmental issues.  I believe a major reason the Port did not express an interest in an America’s Cup World Series event here in 2015 is because the permit work might not be obtained that quickly.

“Some people said we were being used to get more concessions from other venues, and others would come to us and say ‘they won’t go there; you’re bidding against yourselves.’  Of course, it’s hard to know at the time and we just worked to put forth the best offer we could.  Personally, I was quite surprised to lose to Bermuda.  I thought it was much more likely that we would lose it to some sort of last minute ‘Hail Mary’ from San Francisco.  But as far as I know -- and I really believe this to be the case -- there really was not any conversation with San Francisco after the middle of the year.  I’ve heard it enough and, now that Bermuda has been chosen, I believe it.  I’m stunned, but I believe it.”
 

Proposed Race Areas for 2017 in SD and Bermuda
 
Race Area for 2011 ACWS
 

Bermuda vs San Diego

“A great deal has been made of the time zone and it works well for TV in Europe, but it doesn’t work so well for New Zealand and it certainly doesn’t work for Australia, though that’s moot now.  It also doesn’t work so well for potential teams from China or Japan.  But for the teams from Europe that are funded now, or likely to be funded, I think the time zone works well.  And, maybe there is broadcast money to be made or sponsors to be lined up because of that. 

“Russell has been quoted as saying that all the teams would not fit in San Diego.  We certainly could fit the original spec of five and I think we could have fit one more.  But who knows how many teams will still be viable in 2017?

“The financial package that Bermuda is reported to have put together is amazing, between venue fees, sponsor guarantees, infrastructure improvements, services, etc.  Their economic benefit numbers were comparable to the final numbers in San Francisco and very comparable to the studies we did here.

“You saw a great deal of enthusiasm from Bermuda when the Cup was there a few weeks ago – I don’t know if it would have been quite like that in San Diego, but on the flip side, if you want to have an event with great numbers of spectators, San Diego is a much better venue to attract hundreds of thousands of spectators, for racing, concerts, etc.  I think Bermuda will be much more of a broadcast and high-end hospitality venue.  I think the commercial considerations are extremely important now.”

In the end, Laun is gracious as always despite his disappointment -- and looks forward to cheering their hometown heroes.

“I’m sure Bermuda will realize a long-lasting benefit from the hosting America’s Cup and I’m sure the sailing will be beautiful.  It will be great television.  I wish the Oracle team well; I hope they have a great event and a successful defense.  We’re rooting for our local talent, SDYC members Jimmy Spithill and Andrew Campbell.”

 -- By Diane Swintal for CupInfo.com/©2015 CupInfo.com
 


Photo:©2011 Guilain Grenier/Oracle Team USA
 


Additional Links and Info:

Bermuda Venue Announcement (Dec 2, 2014)
 


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