In ruling against Oakland, judge offers developer a choice: money or coal?
Phil Tagami, a longtime developer in Oakland, said the marine terminal will be constructed one way or another. A judge in Oakland has ruled that developer Phil Tagami can continue working on a port development that could store large shipments of coal, which Oakland has been trying to prevent. The decision was made by Judge Noël Wise of the Alameda County court, who sided with Tagami's claim that Oakland had unfairly terminated its lease agreement with him. The city cited missed deadlines as a legal concept known as "force majeure," a concept where circumstances occur when the city tries to ban coal from its borders. Environmental advocates fear that coal dust could mix with the air and exacerbate West Oakland's notoriously poor air quality. Despite the court's decision, the city has appealed the judge's decision.
Publié : Il ya 4 mois par Shomik Mukherjee dans Business Environment
OAKLAND — A judge on Tuesday granted new life to a port development that could eventually store large shipments of a product that Oakland has spent years trying to keep out of the city: coal.
The final decision by Judge Noël Wise of the Alameda County court will extend to summer 2026 a long-standing ground lease held by developer Phil Tagami, who has sought for a decade to oversee construction of a 34-acre marine terminal at the port, and potentially ship coal from there.
The court sided with Tagami’s claim that Oakland unfairly terminated its lease agreement with the developer; the city had cited missed deadlines, but Judge Wise ruled that they were not Tagami’s fault, but instead the result of unforeseen circumstances, a legal concept known as “force majeure.”
The twist — one of many in this long-running coal war — is that in this case, those circumstances were actually actions taken by Oakland itself to try to ban the fossil fuel from city limits.
The stakes are high for environmental advocates who believe bulk amounts of the product would lead coal dust to mix with the air and worsen the notoriously bad air pollution in West Oakland. Emergency room visits or hospitalizations for asthma are two times higher in West Oakland than the rest of Alameda County, according to a 2018 county study, which activists have ascribed to poor air quality.
But like many wars, this one never seems to reach a true ending; by Tuesday afternoon, the city had already appealed the judge’s ruling.
Ultimately, Judge Wise offered Tagami a choice: Either continue trying to build the terminal, which would harbor bulk goods that arrive by rail before shipping them out to sea, or take nearly $318,000 in damages and walk away.
The damages offered were far less than what Tagami’s company, Oakland Oversized Bulk Terminal, LLC., or OBOT, said a third-party consultant had come up with — as much as $159 million, including sunk costs and legal fees.
Tagami said he always intended to see the terminal through to construction, but insists that the decision of whether to ship coal would be made by Insight Terminal Solutions, a firm that would manage shipments from the terminal.
“Our mission was always to get the project built,” he said in an interview. “The judge proved throughout the trial that the city not only acted in bad faith and breached the agreement, but that they did so from the onset — they never intended to honor it.”
It is unclear if the city’s appeal will impact the new deadline set by Judge Wise for the terminal’s construction.
“Although we appreciate that the trial court ultimately correctly rejected OBOT’s attempts to obtain hundreds of millions of dollars in damages that it is not entitled to under the contract or law, the City’s position remains that the court erred” in siding with Tagami’s firm, a spokesperson for the city attorney’s office said in a statement.
Insight Terminal Solutions is currently under the control of JMB Capital, a Los Angeles hedge fund owned by Jon Brooks and Vikas Tandon. The two businessmen stepped in after Tagami’s previous partner, the late Kentucky coal executive John Siegel, went bankrupt several years ago.
The stakeholders behind the Oakland terminal were previously linked to coal executives in Utah, where the state legislature in 2016 dished out $53 million for the Oakland coal project.
By then, Oakland officials were already embroiled in a lawsuit with Tagami over the coal war — eventually losing when a federal court in 2018 said there was little evidence that errant coal dust would fly off train cars and directly lead to air pollution.
Still, environmental advocates said the fight is far from over.
“The large amount of community opposition might dissuade developers and financiers from wanting to get involved in project,” Ted Franklin, member of the group No Coal in Oakland, said in an interview about the judge’s final decision.