Judge permits coal terminal on Oakland’s waterfront
A judge ruled that a developer has the right to store and ship large amounts of coal from a waterfront terminal in Oakland despite objections from city officials and environmental groups.
Oakland had agreed in 2013 to allow developer Phil Tagami’s Oakland Bulk and Oversized Terminal, or OBOT, to build a $250 million shipping terminal near the Bay Bridge toll plaza. The terminal is part of a 130-acre development that Tagami’s California Capital & Investment Group has undertaken at the old cityowned Oakland Army Base.
Oakland banned coal handling and storage within city limits in 2016. Two years later, the city applied the ban to the marine terminal project, saying the company had previously assured city officials that coal would not be stored there.
But federal courts then found that Oakland had failed to show the shipments would endanger local residents. And Alameda County Superior Court Judge Noël Wise has now ruled that the city’s 2018 decision to cut off Tagami’s lease violated its 2013 contract with the developer.
On Tuesday, Wise said Tagami and his contractors would have another 2 years to decide whether to receive coal shipments by rail, store them at the terminal and send them overseas. Tagami said Wednesday that the decision is up to his tenant, Insight Terminal Solutions, and others, but that the court rulings show the city’s objections are unfounded.
“The city entered into an agreement with eyes wide open,” he said. “They’ve been spending almost a decade now trying not to honor the agreement. The judge (Wise) determined the city acted in bad faith.”
The developer and others in the venture had previously sought $160 million in damages for lost profits. Wise rejected the damages, but said Tagami could choose between accepting $318,000 in compensation or going ahead with the coal project. He chose the project.
Oakland is asking a state appellate court to overturn the ruling.
The city contends that “the court erred in making its initial finding in favor of OBOT on the City’s and OBOT’s dueling breach-of-contract claims,” City Attorney Barbara Parker said in a statement.
Environmental advocates also promised to continue their opposition.
“If the developers decide to move forward with their plan to put a polluting coal export terminal in the Port of Oakland … they can expect a long, uphill battle,” said Ben Eichenberg, a lawyer for San Francisco Baykeeper. “For over a decade, frontline communities have demonstrated their resolve to keep this poisonous project out of West Oakland.”
But Tagami said coal has been shipped through Oakland for years, in uncovered rail cars bound for nearby Richmond, and air quality agencies have not found any dangers.
He cited a ruling in 2018 by U.S. District Judge Vince Chhabria of San Francisco, who found the City Council lacked evidence to support its conclusion that coal and petroleum coke shipments “pose a substantial danger to people in Oakland.” The 9th U.S. Circuit Court of Appeals agreed with Chhabria in 2020 that the city was bound by its 2013 agreement with Tagami.
Tagami said federal regulators reviewing the case have also found that, under federal law, a local government has “no right to limit or prohibit a legal commodity from being shipped.”