Dr Gibbons: Financial Aspects Of America’s Cup

December 5, 2014

[Updated] Bermuda will benefit from additional on-island spending of approximately $250 million from hosting the America’s Cup,  the capital costs for Government associated with site preparation are estimated to be about $14 million, and Bermuda’s initial bid included a commitment to spend $5 million per year over three years.

This, and more, was revealed in a statement from Minister of Education and Economic Development Dr. Grant Gibbons today [Dec 5] in the House of Assembly.

Minister Gibbons said, “Based on available economic impact studies of former host venues, including San Francisco, Valencia, Spain, and Auckland, New Zealand, we conservatively estimate that Bermuda will benefit from additional on-island spending of approximately $250 million from hosting the event

“Conservative estimates suggest that Government alone will receive additional gross revenues of $14 million from taxes and duties, which will help offset the operational and infrastructure expenses involved in hosting the event.

The Minister said costs associated with hosting the 35th America’s Cup fall into two categories: investment in Bermuda infrastructure and services over the next three years, and sponsorship of the event as part of Bermuda’s bid package.

Update: Some of the financial highlights:

  • Estimate that Bermuda will benefit from additional on-island spending of approx. $250 million
  • Estimates suggest Govt. will receive additional gross revenues of $14 million from taxes & duties
  • For both capital & operational expenses, majority of the spending will occur in 2016/2017
  • Capital costs for Government associated with site preparation, enhancements to buildings and docks, moorings, utilities and services are estimated to be about $14 million over 3 years.
  • Expenses related to the operation of the America’s Cup Village have been budgeted at $11 million over 3 years.
  • Costs for transport, security, emergency services, insurance, and legal costs budgeted at $12 million over the next 3 years.
  • Agreement with the America’s Cup Event Authority includes a sponsorship fee of $1 million in 2014, $4 million in 2015 and $5 million in each of 2016 and 2017.
  • Govt. has provided a guarantee of $25 million to the America’s Cup Event Authority against commercial sponsorship

“Although the Royal Naval Dockyard complex has a well-established infrastructure and existing hospitality and marine services, additional investment in infrastructure and facilities will be required to host the teams, support facilities, operations, media, sponsors, and visitors expected over the next three years. We will create an impressive America’s Cup Village.

“The capital costs for Government associated with site preparation, enhancements to buildings and docks, moorings, utilities and services are estimated to be about $14 million over three years.

“In addition, expenses related to the operation of the America’s Cup Village, including additional utility usage, sanitation, parking, professional fees, project management and demolition have been budgeted at $11 million over three years. For both capital and operational expenses, the majority of the spending will occur in 2016 and 2017

“Other additional operating expenses that the Government will bear include the costs associated with establishing and staffing an administrative team, to be known as the America’s Cup Bermuda [ACBDA] team, to work alongside the America’s Cup Event Authority.

“Costs for transport [additional ferry and bus services], security, emergency services, insurance, and legal costs have been budgeted at $12 million over the next three years. We will also set up a facility under the America’s Cup Bermuda team to welcome volunteers and those who wish to help in these events over the next three years.

“I would like to re-emphasize that Government spending on infrastructure, preparation and operational expenses will provide a significant economic stimulus and additional job creation,” added the Minister.

“It was clear at an early point in the bid process that in order to be seriously considered as a potential venue, Bermuda would need to commit a credible amount as a sponsor to hosting the event, and our initial bid included a commitment to spend $5 million per year over three years.

“Our agreement with the America’s Cup Event Authority, therefore, includes a sponsorship fee of $1 million in 2014, $4 million in 2015 and $5 million in each of 2016 and 2017. By agreement, these funds will be provided in Bermuda Dollars and will be spent in Bermuda.

“The Government has provided additional sponsorship, specifically, a guarantee of $25 million to the America’s Cup Event Authority against commercial sponsorship by companies and organizations that wish to gain marketing and hospitality benefits from the events.

“The guarantee will not be assessed until August 2017, and commercial sponsorships facilitated by Bermuda in cooperation with the America’s Cup Event Authority between now and 2017 will count against the $25 million guarantee.

“More precisely, and in line with customary practice in the event industry, 30 percent of new commercial sponsorship funds received between now and then will be deducted from the $25 million.

“Based on our experience to date, we believe that the recent announcement of the Bermuda venue by the America’s Cup Event Authority and the anticipated announcement of the broadcast rights will help to solidify commercial sponsorship arrangements that are currently under discussion, and introduce new ones.

“By agreement, the guarantee will also be reduced by revenue sharing opportunities for Bermuda from all general admission tickets, concert tickets and public- spectator tickets for the America’s Cup events in Bermuda.”

The Minister’s full statement follows below:

Mr. Speaker, I am honoured to rise today [Dec 5] to formally report that Bermuda has been selected as the host venue for the 35th America’s Cup in 2017. Our selection is a tremendous vote of confidence in Bermuda’s capabilities to deliver a spectacular global sporting event, and every Bermudian should be excited and proud.

America’s Cup Bermuda 2017 offers all Bermudians an unparalleled opportunity to shine on the world stage and demonstrate the industriousness, the ingenuity and the warm hospitality for which we have always been known.

Mr. Speaker, America’s Cup Bermuda 2017 represents a transformative moment in our island’s history. The short- and long-term benefits to our economy, our reputation and our sense of national pride cannot be overstated. But America’s Cup Bermuda 2017 is a moment that must be seized.

We will need all hands on deck to realize the full potential of this extraordinary event and to meet the high expectations and standards of excellence set by the America’s Cup Event Authority. From this moment on, every Bermudian will be part of the team that takes full advantage of the incredible opportunity before us. It will require a great effort, but the rewards will be significant.

Mr. Speaker, as we move into the next phase of planning for America’s Cup Bermuda 2017, this Government commits to ensuring that all Bermudians have an opportunity to be included and involved.

The smiles on the faces of Bermuda’s schoolchildren as they welcomed the Cup to Bermuda and the enthusiasm of the crowds on Front Street as the Cup was presented to the people were good indications of a desire to be part of this new chapter in our history. We know that the complete success of this event depends on the full embrace of our community.

This Government also commits to ensuring that all Bermudians understand how the positive benefits of America’s Cup Bermuda 2017 will be experienced throughout the community. It is easy to believe that the positive impact of this event will be limited to a few. We know that is not the case, but it is our responsibility to communicate and demonstrate clearly why and how every Bermudian will benefit.

Mr. Speaker, so what is the America’s Cup? What does is represent? First, it is the most recognized global sporting event after the Olympics and the World Cup. Its history dates to 1851, when the New York Yacht Club won the 100 Guinea Cup in England on the schooner America and the team returned home to New York as heroes.

They donated the trophy to the New York Yacht Club under a Deed of Gift, which stated that the trophy was to be “a perpetual challenge cup for friendly competition between nations.” Thus was born the America’s Cup, named after the winning schooner America, as opposed to the country.

The America’s Cup is a difficult trophy to win. In the more than 160 years since the first race, only four nations have won what is often called the oldest trophy in international sport. For perspective, consider that there had been nine contests for the America’s Cup before the first modern Olympic Games were held in 1896. And now Bermuda will become part of this illustrious sporting history.

Mr. Speaker, the America’s Cup Event Authority has scheduled a series of racing events in Bermuda. These include the America’s Cup World Series, from October 16 – 18, 2015; Youth America’s Cup in 2017; America’s Cup Challenger Playoffs 2017; America’s Cup Concert Series 2017; America’s Cup Super-Yacht Regatta 2017; and, of course, the Finals, the America’s Cup Match in June, 2017.

Other World Series events will be held around the world in 2015, in which Bermuda will be identified prominently as the host venue for the final match in 2017. There are now six teams participating, including USA Team Oracle, Great Britain, Italy, New Zealand, France and Sweden. Last Tuesday [Dec 2], the America’s Cup Event Authority announced that additional teams may join the roster.

The America’s Cup racing events will take place in the Great Sound, while the Royal Naval Dockyard, under the auspices of West End Development Corporation, will be the site of the America’s Cup Village and the location of the team bases for the major events leading up to and including the finals.

As already announced, the Hamilton waterfront will be the site for the World Series Event in October 2015, and more details will be forthcoming on this in due course.

Mr. Speaker, we have recognized from the outset that unlike other host venues, we cannot accommodate hundreds of thousands of spectators, given Bermuda’s scale and limited capacity, but we have been assured that our attractive time zone for global TV broadcasts, our warm hospitality and the spectacular setting in the Great Sound will adequately compensate for our size.

Mr. Speaker, Bermuda will begin to see tangible evidence of the America’s Cup in the New Year. Members of the America’s Cup Event Authority will begin to move to Bermuda with their families early in 2015. We will see Team Oracle/USA move to Bermuda in the spring, and their spectacular 45-foot catamarans will be sailing in the Great Sound by early summer.

We will see more teams come, some to permanently base themselves here, others to visit and experience the sailing conditions. By the end of 2016, we hope to see the first of the new AC 62’s—the new boat for the finals—here in Bermuda. Work to create the America’s Cup Village at the Royal Naval Dockyard will be ongoing.

Mr. Speaker, Bermuda’s hosting of the 35th America’s Cup will bring with it a substantial economic stimulus, including jobs and investment that will begin in 2015 and build to the events in 2017 and beyond.

All sectors of Bermuda’s economy will be positively impacted: tourism; hotels, restaurants and hospitality-related services; transport, including taxis, ferries, buses; construction; wholesale and retail; security; marine services, shipping and forwarding; telecommunications; service industries; small businesses; and real estate. We believe the 35th America’s Cup will also have a positive impact on Bermuda as a jurisdiction for international business.

Additionally, the global exposure generated for Bermuda will have a significant and sustained impact on tourism, resulting in a significant boost for air arrivals and on-island expenditure for years to come.

It is expected that the America’s Cup events will help catalyze the development of new hotel and hospitality products and promote reinvestment and revitalization of existing properties. We have already witnessed a $1 million commitment to refurbish suites at the Hamilton Princess. And purpose-built infrastructure, at the Royal Naval Dockyard and elsewhere around the island, will enhance our tourism product well beyond the America’s Cup Final in 2017.

Mr. Speaker, based on available economic impact studies of former host venues, including San Francisco, Valencia, Spain, and Auckland, New Zealand, we conservatively estimate that Bermuda will benefit from additional on-island spending of approximately $250 million from hosting the event.

The additional spending is anticipated to come from the operations of the America’s Cup Event Authority on island, the teams taking part over the next three years, spending by sponsors on hospitality and associated activities, additional visitors, media, regatta officials, super-yacht visits, and event-related Government spending.

Conservative estimates suggest that Government alone will receive additional gross revenues of $14 million from taxes and duties, which will help offset the operational and infrastructure expenses involved in hosting the event.

Mr. Speaker, costs associated with hosting the 35th America’s Cup fall into two categories:

  • Investment in Bermuda infrastructure and services over the next three years, and
  • Sponsorship of the event as part of Bermuda’s bid package.

Government funding for both of these categories will involve money that will be spent in Bermuda as part of our agreement with the America’s Cup Event Authority and will provide a stimulus to Bermuda’s economy.

Although the Royal Naval Dockyard complex has a well-established infrastructure and existing hospitality and marine services, additional investment in infrastructure and facilities will be required to host the teams, support facilities, operations, media, sponsors, and visitors expected over the next three years. We will create an impressive America’s Cup Village.

The capital costs for Government associated with site preparation, enhancements to buildings and docks, moorings, utilities and services are estimated to be about $14 million over three years. In addition, expenses related to the operation of the America’s Cup Village, including additional utility usage, sanitation, parking, professional fees, project management and demolition have been budgeted at $11 million over three years.

For both capital and operational expenses, the majority of the spending will occur in 2016 and 2017.

The South Basin Marina project, which is an existing joint venture between West End Development Corporation and Cross Island Development, will provide necessary additional space and will be completed prior to the 2017 events.

Other additional operating expenses that the Government will bear include the costs associated with establishing and staffing an administrative team, to be known as the America’s Cup Bermuda [ACBDA] team, to work alongside the America’s Cup Event Authority. Costs for transport [additional ferry and bus services], security, emergency services, insurance, and legal costs have been budgeted at $12 million over the next three years.

We will also set up a facility under the America’s Cup Bermuda team to welcome volunteers and those who wish to help in these events over the next three years.

Mr. Speaker, I would like to re-emphasize that Government spending on infrastructure, preparation and operational expenses will provide a significant economic stimulus and additional job creation.

Mr. Speaker, it was clear at an early point in the bid process that in order to be seriously considered as a potential venue, Bermuda would need to commit a credible amount as a sponsor to hosting the event, and our initial bid included a commitment to spend $5 million per year over three years.

Our agreement with the America’s Cup Event Authority, therefore, includes a sponsorship fee of $1 million in 2014, $4 million in 2015 and $5 million in each of 2016 and 2017. By agreement, these funds will be provided in Bermuda Dollars and will be spent in Bermuda.

The Government has provided additional sponsorship, specifically, a guarantee of $25 million to the America’s Cup Event Authority against commercial sponsorship by companies and organizations that wish to gain marketing and hospitality benefits from the events.

The guarantee will not be assessed until August 2017, and commercial sponsorships facilitated by Bermuda in cooperation with the America’s Cup Event Authority between now and 2017 will count against the $25 million guarantee. More precisely, and in line with customary practice in the event industry, 30 percent of new commercial sponsorship funds received between now and then will be deducted from the $25 million.

Based on our experience to date, we believe that the recent announcement of the Bermuda venue by the America’s Cup Event Authority and the anticipated announcement of the broadcast rights will help to solidify commercial sponsorship arrangements that are currently under discussion, and introduce new ones.

By agreement, the guarantee will also be reduced by revenue sharing opportunities for Bermuda from all general admission tickets, concert tickets and public- spectator tickets for the America’s Cup events in Bermuda.

By way of comparison, Valencia is reported to have provided sponsorship of some $51 million during the 2007 America’s Cup, and Singapore is understood to provide a sponsorship of $100 million per year to host Formula One races.

In simple terms, Mr. Speaker, Bermuda is making a substantial investment with clear indications of a substantial return on that investment, in order to benefit every Bermudian for the foreseeable future.

Mr. Speaker, the America’s Cup Event Authority and Oracle Team USA have acknowledged the Government’s intention to create jobs and opportunities for Bermudians during the events and have committed to employing Bermudians and Bermuda companies during their stay.

In addition to sailing programmes and other opportunities for young Bermudians, the America’s Cup Event Authority will be announcing an educational STEM programme [for Science, Technology, Engineering and Maths] that will incorporate some of the technical and engineering principles used in their racing designs; this will be available to Bermuda’s students and will help foster interest in science and maths in our schools.

Mr. Speaker, in the Throne Speech the Government committed to an America’s Cup Act 2014 that will help facilitate the hosting of the event in Bermuda. The legislation, which will be introduced on December 12th, will outline the various duty and other tax provisions that will be provided to the America’s Cup Event Authority, team members and other groups and individuals closely connected with the event.

The Act will also make provision for various permissions to be granted during the events on an expedited basis, while ensuring appropriate accountability and oversight to this Honourable House. Although it is broader reaching due to the complexity of the 35th America’s Cup, the new legislation will reflect some of the same principles used in the Hotel Concession Act to stimulate new hotel investment.

In future communications to the House and during the Budget session, I will set out the provisions for the creation of the America’s Cup Bermuda team that will work closely with the America’s Cup Event Authority to ensure efficient accommodation for the racing teams in Bermuda, the facilitation of events and the timely development of infrastructure and site arrangements.

Mr. Speaker, I would like to close by expressing my profound thanks to all those individuals who have been an integral part of the America’s Cup Bermuda Team, including a number of professionals who have generously offered pro-bono services to help achieve our success.

They are:

  • America’s Cup Bermuda Team
  • Adam Barboza – Bermuda Tourism Authority
  • Alan Burland
  • Andrew Cox
  • Somers Cooper
  • Peter Durhager
  • Victoria Isley – Bermuda Tourism Authority
  • Greg Muir – KPMG
  • Jasmine Smith – Bermuda Government
  • Elizabeth Ward
  • Michael Winfield – Bermuda Tourism Authority
  • Duncan Card
  • Ian Stone
  • Michelle Stone

In addition, I am grateful for the extensive support that the Bermuda Team received from Cathryn Balfour-Swain and Greg Howard in the Attorney General’s Chambers.

Mr. Speaker, I conclude by saying that I believe the America’s Cup will provide an enormous opportunity for Bermuda to showcase our island to the world, to rejuvenate tourism and to provide extensive and sustained economic benefits to this community. But to reap the benefits, we must deliver, and that will require the collaboration and active involvement of all Bermudians.

Thank you, Mr. Speaker.

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Comments (69)

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  1. Onion says:

    The government collects around 20 cents on every dollar of GDP so the total net to the government of a $250 million boost is $50 million in indirect tax boost.

    • Not exactly says:

      Which means at worse, Government breaks even and local economy gains approx. $200 million. Awesome!

    • A Better Bermuda for All says:

      The scariest part is that $50m is only 2.5% of our debt….that how big our debt is now and how impossible it is to pay off. What did we get for it? NOTHING

    • Vote for Me says:

      In short, Government has committed $77m for the America’s Cup.
      Sometimes clarity is preferred and easier to understand.

      On the plus side, the economy is expected to benefit to the tune of $250m

      • A Better Bermuda for All says:

        $25 million is a guarantee and not actual cash.

  2. somuchless says:

    Looks like Bermuda will rebound. Deff a good sign.

  3. campervan says:

    Thanks team OBA and Grant Gibbons for bringing home the bacon and saving our bacon.

    Our home values and pensions now appear to be more secure than during the “runaway spending” years.

    Now lets roll up our sleeves and all so our part for the good of everyone who calls Bermuda home.

    • Ian says:

      Thanks OBA and Jesus for all that is good in our lives and delivering us from all that is evil! lol

      On a more serious note, thanks Dr Gibbons and the AC bid committee for hitting this one out of the park!

      • A Better Bermuda for All says:

        Agreed. Thank you OBA for singlehandedly saving us from financial ruin.

  4. Umm.... says:

    This sounds good to me. I think we have some good stewards in gov’t for this project. I don’t think we’ll see cost overruns as with projects in the past. I truly believe that this will see the rebound of our tourism industry (from the event and future events/arrivals) and economy. I’m excited about the next couple years.

    • SMH says:

      You mean having an MP on the Board of a Government golf course, also be one of the contractors isn’t a good idea?

  5. broncos says:

    Can anybody explain why we are building the event village in Dockyard when racing is from Morgan’s Point to Hawkins Island? We won’t be able to see any of the racing from there so people will have to rely on tv screens to see any of the action. IMO MP would have been a better spot for the village as outlined in the original plans.

    • Doug says:

      has the course even been communicated?

    • Me says:

      That’s with any America’s Cup. You can’t have an event next to where buildings are. You have to get unobstructed breeze. Duh!! Have you seen the course? Let’s all see the course then go from there..

    • Terry says:

      And what would you suggest ‘broncos’.
      A floating platform somewhere in the middle of the course?
      Garbage.
      There will be thousands of vessels anchored off the course line for the view.
      You got your cake now come to the table and eat it.

      Shalom.

    • real talk says:

      So where do you want them to build it? On Morgans Point? The Village will house the boats and the marinas etc… Its bermuda You have a whole coastal area to watch it from.

    • Loud says:

      You obviously don’t know what you are talking about. The race course will be between Morgan’s point and Dockyard. With Bermudas prevailing winds coming from the South/Southwes,t the leeward mark for the course will be placed right in the front of the southern basin of Dockyard camber. Where they plan on building the AC Village. Leave the planing and ideas to people that know what they are talking about!

    • enough says:

      do you have any idea how big and how fast these boats go. There is no way you could have that closer to Hamilton and as with most large racing events they are usually held in the great sound.

    • Triangle Drifter says:

      I’ll agree that Dockyard is no placew to view the racing in the sound however one of the assets of the Sound course is that it can be viewed from shore at so many locations. Better still, some of these locations are well elevated.

      Viewing from the water is fine too but there will be no following around like the dinghy racing & no hanging around close to turning marks like the Round the Island Race.

      • RISR says:

        Hope they don’t go through the Round the Island Seagull race course! Mid-June every year :)

        • Triangle Drifter says:

          Dem byes will cruise right down between those cat hulls no problem.

          Besides, once they get a little rum or burr in them, no worries.

  6. watcher says:

    Well done to the OBA Government!

  7. dun says:

    who is paying for the new island?

  8. Ace girl says:

    We the taxpayers are, just as we paid for all of the previous mismanaged projects. . Just ask the Auditor General. What about the $800 million project that never came to fruition, we paid for that too.

    Well done Dr. Gibbons and your team, a superb achievement for Bermudians young and old and for resident guests. It still irks me that this Tourism Authority achieves little but is always there to piggyback on the successful bidders glory. We need to see the BTA’s last year accomplishments, if any. As for the Minister of Tourism and Transport that is exactly what he is, he tours and uses ever other destination’s transport. We need to get rid of these two entities and plow the monies saved into this wonderful experience secured by Sr. Grant and his team.

    • A Better Bermuda for All says:

      I respectfully disagree and think the new Tourism Authority runs circles over anything we’ve ever had in the past, ever.

      • Stunned... says:

        with all due respect, the previous Tourism administration not really a credible comparison. This BTA while running circles still seems to me very pedestrian and parochial in its offerings. Not being one to quote the shadow Finance Minister but agree what sales pitch is that for people to come to Bermuda for a fish cake, when you consider we don’t even have a premium restaurant that serves only authentic Bermudian dishes.

        I expected more from the BTA.

        • A Better Bermuda for All says:

          Thanks, I hadn’t thought of that. That’s what all the tourists coming here for the America’s Cup are going to want.. real Bermudian experiences

        • Onion says:

          So start that restaurant and stop complaining.

        • Navin Johnson says:

          What is an authentic “Bermudian” dish? Every place in the world has Mac and cheese and peas and rice

  9. Smart Advice says:

    I dont think bermudians see the big picture here! We can hold this event MORE than once we just have to ALL play our part!

    • A Better Bermuda for All says:

      It’s amusing watching the haters try and kind ways to make this sound like this is somehow bad for Bermuda. Like the saying goes, haters are gonna hate no matter what you do.

  10. MB says:

    Well done OBA but I have to say – are they saying we are building the AC Village for $14 million? Am not clear …. But the PLP managed to spend $20 million+ on grass and a single clubhouse to build Port Royal ?!

    • dun says:

      that is what I was asking above. At 14m there is no way, guys are drinking cool-aid if they think it will just cost 14m to build the dock.

      • serengeti says:

        I guess you’re basing that on how the cost of renovating a golf course mysteriously went from $3.5m to $24m. Yes, we were all a bit puzzled by that.

        • dun says:

          King wharf was projected to be 35m and ended up at 60m (more for the fixing). This dock would cost around the same I would think.

          • Family Man says:

            I think you’ll find it depends on the contractor.

            Read into that what you will.

    • A Better Bermuda for All says:

      MB…the total was $24M. Don’t forget that an MP sat on the Board while also being one of the contractors. Luckily we’re under new management and this one has ethics, values and morals.

  11. js says:

    so Bermuda has taken on at a minimum $72 million in projected costs, sponsorship fees and guarantees to host an event that may generate $250 million in on island spending

    so of that estimated $250 million of on island spending a minimum of $72 million will be as a result of additional debt increases taken on by the tax payers

    I take it Government expects to see somewhere in the range of $180 million of on island spending sourced from foreign sources as Bob Richards often reminds us that Bermuda dollars are not worth anything

    so the event may bring in $180 million over 3 years which equates to $60 million each year

    so to put it into perspective IB generates over 1 billion each year in economic stimulus and has done so for well over a decade

    so the America’s Cup is estimated to generate a measly 3% of what IB generates for a 3 year period yet is hailed as the necessary shot in the arm to get the economy back on track

    one thing that can be said about the OBA is that they are very fond of using surrogates that distract from what’s really happening behind the scenes

    the OBA needs to stop playing games and develop Bermuda real alternative industries

    if San Diego goes bankrupt the state of California will bail them out

    if the state of California goes bankrupt the U.S. federal government will bail them out

    if Bermuda goes bankrupt who will bail Bermuda out

    • A Better Bermuda for All says:

      Port Royal cost over runs were $20M and Grand Atlantic with it’s one tenant was in the $40-60M range. I won’t go into the other disasters like TCD, Berkely, Court House. All of these were utter fiasco’s with absolutely no return for taxpayers …..compared to these, the America’s Cup seems the deal of the millennium!

    • LiarLiar says:

      Take away the $25mn guarantee that will be eradicated via sponsorship monies. If you look at the calibre of companies who sponsor the America’s Cup it will be easy to clear that guarantee without being touched.

      So $47mn spent over 3 years with annual Govt budgets of approximately $1bn annually equates to 1.6% over the next 3 budgets. Hardly breaking the bank wouldn’t you say? If you want to be more conservative then include the $25m guarantee and that still only translates to 2.4% of $3bn or 7.2% of $1bn (annual budget).

      On top of that where does it say that more debt will be issued to fund these developments? Bob borrowed $800mn in his first year to cover 3 years of deficits as a means to lock in the low interest rate environment. I am pretty sure that all this would have been taken into account during the crunching of these numbers. These aren’t financial amateurs.

      The economic impact will be felt within the community more so than the Government. By stimulating the economy the private sector will be enhanced and thus by extension Govt fees and taxes will also increase. The exposure that this event will bring to the island will be unprecedented and will put Bermuda back on the tourism map. It is an event that is viewed by many throughout the world.

      One minute you and others complain about austerity and then the next you complain about Govt spending which will inevitably stimulate the economy. Since when did you guys care about going bankrupt and the like? Before such spending was for ‘the people’ and deemed necessary. The difference being is that these monies will be funding an event that will produce a return. The only capital project that I can think of that has long term financial benefits is the Dockyard Pier.

      I mean even the Opposition agrees with the positive impact this will have for the island and acknowledge that some expenditure will have to occur to facilitate this event.

      Look, you have posted enough negativity about this event since Tuesday. We get it. You don’t like the OBA, you do not like any of their ideas or initiatives, you do not like sailing and you won’t support any idea/plan/action undertaken from December 2012 to 2017. We get it.

      • js says:

        did you breathe when you wrote this post

        its interesting that you would use Bean and Burt as a source especially the amount of hash that gets thrown at them

        asking questions shouldn’t be seen as negative but in Bermuda’s hyper politicized environment everything tends to

        if Gibbons wants to take a gamble with the tax payers money he should take the $47 million down to Bean’s gambling parlour and buy some Florida lottery tickets

        America’s Cup it should be called the Bermuda’s Cup since Bermuda will end up paying for it

    • Bermuda for ALL says:

      JS, where’s the comparison of the cost of the America’s Cup to all the multi million dollar cost over runs on every PLP projects as well as the accumulation of $2B in debt. I see you’ve conveniently left that out. Might be a good idea to change you name to BS.

    • SMH says:

      This is desperation 101..and is going to get worse.

    • Terry says:

      js; take a pill.
      Your last sentence/sentence speaks volumes.
      $2billion in debt left buy the PLP.

      Piss off.

  12. Two Different Bermuda's says:

    Well looks like we will once again be paying for the economic gap between the two classes in Bermuda to get even larger. People keep talking about how it will create jobs….construction jobs (majority of which won’t be Bermudians), jobs at restaurants (again majority of which won’t be Bermudians)…and jobs driving behind and picking up after people who look like the AC Bermuda team photo.

    But hey, this might bring in more foreign investors and deals for Bermuda that will bring more foreign companies here who can bring more jobs that won’t go to Bermudians. Although a few of token “Bermudians” may get crumbs in comparison to others, its so sad to see how black Bermudians always have the short end of these deals while there children are used to wave and smile in the streets.

    So as some Bermudians jump in glory and go on the blogs and papers talking about how great this event that takes place in tourism’s peak season when business is needed during the off season, black Bermudians will continue to see their opportunities in their own country minimized and maringalized in comparison. The elephant in the room i.e. the inequity between white and black Bermudians continues to get bigger and ignored.

    Go America’s Cup!!!

    • A Better Bermuda for All says:

      Keep stirring that social unrest. The last gasp of serious desperation. The PLP would rather that we had no investment at all?

  13. Commodore JB of BBIRYC says:

    I believe this is a very conservative estimate of what Bermuda will make as a result. My fellow yachting billionaire friends will be here. During yachting events we spend our money on entertaining. I know for a fact that the amount of money that I spend on wines and spirits for that time will probably be the equivalent to what Goslings and Burrows Lightbourne makes in two years; that is just the amount of money I will spend on my beverages. That does not include when I host events.

    • High Road says:

      Commodore, I do not have the financial means to dream of hobnobbing with you and your prestigious associates but I d love to come to one of your gatherings!

    • Double M Quad Deuces says:

      Commodore, you are an inspiration to us all!

    • Robbie Butters says:

      Commodore you live the life. I hope that I will be invited to some of your functions and have the ability to mingle with your associates.

  14. Stunned... says:

    Para 1: $250m-72m = positive position of $178m
    Para 2: $178m will be result of additional debt increases taken on by taxpayers?
    Para 3 – onwards: lost at sea trying to figure out the rationale of the post.

    I’m sure many jobs were created when we brought Beyonce to Bermuda. Don’t get me wrong, it was a great show.

    • js says:

      above your head

      ergo the problem

      • Stunned... says:

        agreed. that stuff needs to stay up there in the cloud above my head.

      • serengeti says:

        It’s funny how when the Sage Commission is discussed, all you hear from the PLP/BIU is how government stimulus is a good thing.
        But when the government actually implements a way of stimulating the economy, all you see is bad things. Suddenly you’re more concerned about where the money is coming from.
        Don’t worry about it js. It’s way above your head.

  15. bluebird says:

    Have you noticed that these “SUCCESSFULL” OBA people are “SUCCESSFULL”
    Business People.
    Therefore the “Complainers” it is way over there pay-grade.

  16. Bermuda123 says:

    Great job OBA. You have captured the passion and imagination of Bermudians and pulled off something so incredible it’s hard to appreciate yet. All Bermudians and residents now need to seize the opportunity and delivery. Team Bermuda this is a life raft alongside the Titanic – get on board and row the damn boat!

  17. Observer says:

    I am so glad to see so many positive responses on this blog. One has to accept that there are some who cannot accept that this event could be the most positive thing to happen to Bermuda since 1998.

    That being said, I can understand the disappointment to some who do not want 2,000 jobs to be created in order to see the government to fail. To them I say, if this event is successful and Bermuda gains, the entire country will benefit.

    I cannot see any argument against the America’s Cup and Government’s plans to make it happen. I think PLP must now show their support and show that they want the workers of Bermuda to have jobs. If not, they will once again be on the wrong side of history and seal their fate for many years to come.

    Well done OBA.

  18. notice how de plp been real quiet, probaly losin sleep tryin figure how to put dat negative spin!

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