Is hosting the America’s Cup in 2013 worth free rent, free parking and millions in public and private funds? Billionaire Larry Ellison, who wants to host the cup in San Francisco, thinks so[1]. He has offered to finance and operate the race in San Francisco in 2013, but only if he gets rights to piers and parking lots near the Giant’s Stadium and Google Inc. for the next 75 years. In exchange, Ellison will help raise $150 million for land improvements and another $270 million in private funds to run the regatta and “revitalize an area of San Francisco that few investors have been willing to develop,” according to city development director Jennifer Matz.

Fans of the proposal believe that the city is getting a lot for a relatively small payout, but critics like city supervisor Chris Daly see it as nothing more than a “giveaway of public funds.” Daly points out that the city already is dealing with a $400 million deficit, and does not see the point in “giving money away to one of the richest men in the world.”

It seems to me that the issue is arguable whether or not this is not the best way to bring in investors, but that the question is not one of handouts. Ellison is offering a return on investment rather than just asking for money. Based on his proposal, $420 million would come into the city for running the event and improving the area in which he wishes to host the cup, and he is the one responsible – with his company of course – for ultimately bringing that money to the city. Without the event, Matz points out, the piers to which Ellison wants 75-year access will likely not be much use to anyone anyway, since “there is no capital plan for rehabilitating the piers” and any repairs will be nothing more than “band-aids.”

Ellison is worth $27 billion – quite possibly because he is good at making advantageous business deals. Do you think that his proposal to San Francisco is fair, or is he just asking for a handout in exchange for the America’s Cup?

Thank you for reading! Your comments and questions are welcomed below.

[1]http://www.bloomberg.com/news/2010-12-02/ellison-seeks-san-francisco-real-estate-as-price-for-america-s-cup-in-city.html