Bloomberg News is reporting that the Cup will be held in San Francisco.

Dec. 31 (Bloomberg) — Larry Ellison will defend the America’s Cup in 2013 off San Francisco, the first U.S. city to stage the international sailing competition in almost two decades, the America’s Cup Event Authority said.

Ellison’s Oracle Racing team selected San Francisco Bay as the Cup’s home waters after also holding talks with Newport, Rhode Island, Stephanie Martin, a spokeswoman for the Cup organization, said today in an e-mail. The team won the right to choose the next venue for the 159-year-old regatta by capturing yachting’s “Auld Mug” off Valencia, Spain, in February.

Holding the races in San Francisco will be a homecoming for Ellison, 66, chief executive officer of Redwood City, California-based software maker Oracle Corp. and a longtime resident of the area. His team has been based at San Francisco’s Golden Gate Yacht Club since 2000.

“San Francisco is the best place on Earth to host an event of this stature,” Mayor Gavin Newsom said in a statement, citing the “economic benefit, jobs and excitement that comes with it.”

Conceptualized by Skidmore, Owings & Merrill architect, the proposal suggests the transformation of dilapidated piers 30-32 at the foot of Bryant Street and Pier 50 south of the ballpark into a striking bayfront amphitheater and sailing showplace.

The city’s host plan prevailed over a potential bid from Newport, the site of Cup races from 1930 to 1983. The San Francisco agreement requires Ellison’s team to invest as much as $80 million to renovate city-managed piers to get them ready for the regatta, and raise $270 million to manage and operate the event in exchange for rights and concessions to the race.

Preliminary races will begin in San Francisco in 2012 to determine the Cup’s official challenger, with final matches against Ellison’s Oracle team set for the following year.

Waterfront Property

After the races conclude, the Oracle team will get 66-year and 75-year leases on certain piers and port land in San Francisco’s South of Market district, with the team’s cost for property improvements applied to the leases as a rent credit.

An estimated $1.2 billion in spending in the years leading to final Cup races in mid-2013 would benefit the local economy, according to a Nov. 18 report by the city’s budget analyst.

A civic committee that includes John Stumpf, CEO of San Francisco-based Wells Fargo & Co., and Tom Perkins, a partner at Menlo Park, California-based venture-capital firm Kleiner Perkins Caufield & Byers, has pledged to raise $32 million to defray city costs such as extra police coverage.

Gary Jobson, president of US Sailing, the sport’s governing body, said San Francisco provides a natural arena for the races with reliably strong winds.

“New boats, new venue, I think it’s exciting,” said Jobson, who won the Cup regatta off Newport as tactician for Ted Turner’s Courageous in 1977. “The challenges are, there’s a lot of shipping traffic, and some times of year there’s a lot of fog.”

High-Tech Sailboats

Ellison’s two-race sweep in February against Alinghi, owned by Swiss billionaire Ernesto Bertarelli, completed his decade- long quest for the trophy. The Oracle team sailed a 90-foot (27- meter) trimaran with a 223-foot carbon-fiber wing sail, while Alinghi sailed a catamaran. Oracle’s captain, Russell Coutts, earned his fourth Cup.

Coutts will captain Ellison’s team again. Teams will race 72-foot catamarans, powered by 130-foot (40-meter) wing sails and capable of speeds exceeding 30 knots.

The Cup is named for the schooner America, which defeated a fleet of British yachts off the Isle of Wight in 1851 to capture the 100 Guinea Cup, deeding it as a perpetual trophy to promote “friendly competition between foreign countries.”

The New York Yacht Club defended the Cup off New York from 1870 until 1920, before moving the regatta to Newport in 1930, where it remained until 1983. That year, Australia II beat Dennis Conner’s Liberty in seven races to end the club’s 132- year hold on the trophy. Conner recaptured it off Fremantle, Australia, in 1987 with Stars and Stripes.

The Cup has since been held in San Diego, Auckland and Valencia