The 12-Metre Challenge takes place offshore, leaving from Bobby's Marina in Philipsburg. They go where the wind is best. You can see the boats leaving and returning from the beach along the boardwalk in Philipsburg, but you really can't see the actual race from there. You might even be able to see from Divi, but I don't know about the view from there, so cant say for sure.
Forum: The Friendly St.Martin Island Forum