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San Diego America's Cup Runneth Over With Debt : Sport: Three years ago, a yachting regatta sounded like a great idea. Today, the city and county cannot afford the price of glory on the seas.

May 27, 1990|Martin Hill | Martin Hill is senior editor at San Diego Magazine

SAN DIEGO — Yachting's prized racing trophy, the America's Cup, at last came home to San Diego this month, won not in honorable combat on the waves, as is tradition, but in a stuffy New York courtroom. After a particularly dismal cup event in 1988, and 18 months of tacking through a legal storm, the trophy returns tarnished in spirit and metal, and still facing an uncertain future.

Noticeably absent from its homecoming was the enthusiasm that greeted the America's Cup when sailing champ Dennis Conner carried it through the city's streets on his hero's return from Fremantle, Australia, in 1987. Also absent is the city's unquestioning desire for the America's Cup regatta. Things have changed in San Diego.

Three years ago, Conner and Malin Burnham, the San Diego businessman and world-class yachtsman who spearheaded the Sail America syndicate's Australian challenge, made San Diego beg for the privilege of holding the next America's Cup regatta, then planned for 1991. This was despite the fact that the sailing syndicate's challenge was sponsored by the San Diego Yacht Club. By tradition, the yacht club whose burgee flutters at the top of the winning boat's mast hosts the subsequent race.

This year, as president of the America's Cup Organizing Committee, it has been Burnham's turn to be rebuffed by the same agencies and officials he forced to beg three years ago. Still $4 million in debt from the 1988 fiasco pitting Conner's catamaran against New Zealand challenger Michael Fay's hopelessly outmatched racing sloop, the organizing committee now needs $20 million to retire the debt and to finance the next cup race--scheduled 12 months from now. Burnham hopes to get at least $10 million from public sources, the remainder from private ones, including corporate donations and television broadcast fees.

In return, the regatta organizers are promising to reward the region with a $1.2-billion economic windfall from America's Cup XXVIII, including nearly $50 million in local and state tax revenue. That kind of talk was enticing three years ago. It isn't today.

Both the county and city of San Diego are in no position to provide funding. The county is struggling to find ways just to pay for long-needed new jails and to reinforce the escape-plagued jails it already has. The city of San Diego may have to lay off staff, freeze hiring for its already too-small police force and cut back its much underfunded library system to deal with a $60-million budget shortfall. Meanwhile, the Environmental Protection Agency is forcing city officials to upgrade its sewage-treatment facilities, which could cost San Diego as much as $2.8 billion.

Early this year, legislation written by Assemblyman Robert C. Frazee (R-Carlsbad), proposing the state provide the America Cup's committee with a $10-million "loan" was shelved after city and county officials opposed the bill's requirement that the money be matched by regional public funds raised through a temporary increase in the local hotel occupancy taxes. San Diego's proposed fiscal '91 budget already calls for diverting money from arts and tourism programs financed by those revenues for more urgent needs.

Even the normally cash-rich San Diego Unified Port District is beginning to count its pennies. The agency is fighting several lawsuits, which the port director says may put much of its surplus money in jeopardy. Port commissioners have already granted the organizing committee more than $100,000 to begin planning for the regatta; they will hear another appeal from Burnham on Tuesday. Cup organizers may have to stand in line behind the five bayside cities, including San Diego and the nearly bankrupt Imperial Beach, which also would like to receive some of the district's legendary cash surplus.

Committee officials may even find San Diego corporate dollars wanting. Such contributions tend to come from corporate headquarters. Since the early 1980s, when Sail America received strong support from corporations headquartered in San Diego, the number of such offices here have dwindled. As a result, local arts and community groups that rely on corporate largess are finding huge voids in their budgets.

The organizing committee isn't the only group facing money problems. The eight U.S. sailing syndicates hoping to vie for the privilege of defending the America's Cup in 1992 will be competing for donations to design and build their yachts and train their crews.

Several well-financed potential foreign challengers already have boats built and in the water. So far, the only American hull to wet its keel is a scale model undergoing tank tests in Escondido. The American syndicates hope to make up for lost time by pooling design data, but even that technological advantage may not be enough to overcome the brimming coffers of some foreign challengers.

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