How Much Do You Wanna Bet . . .

That the match for the 34th America’s Cup will be sailed on San Francsico Bay? In the wake of yesterday’s news that the City would not seek a one-time exemption from the California Environmental Quality Act for the infrastructure improvements necessary for a Cup village, we are all but certain that the next Cup match will be held in Europe. In case you missed it, this editor made a rather lackluster appearance on KQED’s Forum Friday morning, at which time the Mayor’s office — represented by Kyri McClellan — made it very clear that they would be going after the one-time exemption to the environmental review required by the CEQA.

So why the change of heart? We’re guessing that Mayor Newsom has wisely realized that the chances of the 34th America’s Cup coming to the Bay are so slim that it’s not worth pursuing the exemption. The environmental community has rightly argued that one-time exemptions — the first of which was enacted last October for the City of Industry’s bid for an NFL team — represent a slippery slope for the state as they create an opportunity for big business to circumvent environmental protections.

With BMW Oracle Racing giving a September 30 draft-plan deadline for the City as of about 10 days ago, the keystone CEQA exemption would have been a monumental, if not impossible, undertaking. According to McClellan, the bill would have to be introduced and signed by the end of the legislative session on August 31. With pretty much all other pending legislation finalized, this would have meant that the exemption would be a stand-alone bill — introduced in the last seven days of the session, and extremely challenging to pass. As of Friday, McClellan said that the City had been talking with some of the Bay Area’s representatives in Sacramento in order to find one willing to introduce the bill. In attempting to make the case for the exemption in an article in the Chronicle last week, Newsom argued that there was no way the Cup would come to the Bay without the exemption. He’s right. But what Newsom either didn’t realize, or felt like he couldn’t acknowledge at the time, was that even with the exemption, there is no way the Cup will come to the Bay.

Much of the debate has pivoted on what we believe is the correct view that Larry Ellison would like to see the Cup contested on the Bay. But we just don’t think it’s as simple as that. Ellison has a day job and so has delegated the running of the team to his CEO Russell Coutts. We can’t imagine Coutts would have signed on without making it clear that all the decisions were his and his alone as he attempts to realize the vision he first thought — incorrectly — he would be seeing through with Ernesto Bertarelli in ’07.

If Coutts and Ellison were concerned solely with defending the Cup, they would host the event here in a heartbeat, as an event on the Bay would likely bring fewer challengers into a venue with some distinct hometown advantages. But it would seem that both have an abiding interest in doing what’s best for the Cup. And what’s best for the Cup, from the standpoint of attracting more teams, more commercial sponsorship, more worldwide profile, and a sustainable existence is to hold AC 34 in Europe. Coutts also has two important things to consider. The first is that if the rumors are true, one or more European countries are offering big money to land the event, and let’s face it, Coutts is not running a charity. The second is not pissing off his constituents — the professional sailors — who would be paying about 28% more income tax if the event were in the U.S. than they would pay working under the 12% cap on income tax that was present in Valencia for the 32nd match. Don’t kid yourself into thinking this isn’t a significant concern for someone like Coutts — he would be giving up a pretty significant chunk of change himself if the rumours of his salary being in the multiple seven figures range are true.

Consider all of this in light of the fact that the nearly all-Kiwi team is based out of Valencia this year, and there are just too many indications that the event won’t come here in ’13 or ’14. We think Newsom understood this when he decided to no longer seek the CEQA exemption. Who knows, if BMW Oracle Racing successfully defends wherever the Cup lands, there just might be a chance we could get the next one.