OAKLAND — City officials have granted permits to an East Bay developer seeking to build a large marine terminal at the Port of Oakland, raising a white flag that may signal the end of a longstanding “coal war.”
The permits merely involve the construction of some fencing along a side road at the former Oakland Army Base, where developer Phil Tagami’s harbor terminal is planned to be built. But they mark the first time he has received approval of any kind for the project since 2018.
Over the course of a decade, the city has lost multiple lawsuits — and subsequent appeals — to Tagami in both county and federal courts.
The city’s efforts to halt the project have been cheered on by environmentalists in West Oakland, who worry that large quantities of coal stored at the terminal would further harm the area’s air quality, which has already suffered from industrial activities.
Now, the city’s top staffer said Tagami’s firm, Oakland Bulk and Oversized Terminal LLC, will be “treated like any other developer that comes into the city.”
“At this point, it’s just another development project,” City Administrator Jestin Johnson said in an interview. “The city has exercised all its legal options.”
The word “coal,” he added, did not even come up during a recent meeting between the administrator and Tagami.
Whether the eventual 34-acre terminal actually ships coal at all would likely be determined by Insight Terminal Solutions, the company that owns a sublease at the site.
Tagami, for his part, insists that market factors will guide which bulk commodities arrive by train through other Bay Area cities and stored at the outer harbor before they are shipped overseas to Asia.
In the past, West Oakland’s environmentalists rallied the city’s leaders to oppose the planned project, noting research that shows the rate of hospitalizations from asthma are higher in the area than anywhere else in Alameda County.
These days, Oakland’s leaders may have more at stake.
A bankruptcy court judge in Kentucky ruled in October that the city may owe hundreds of millions of dollars to Insight Terminal Solutions, which went under amid the city’s various legal fights against the terminal.
Weeks later, however, a U.S. district judge in Kentucky vacated the previous ruling, determining a bankruptcy judge lacked the authority to make a “final judgment” against the city.
Judge Benjamin Beaton wrote that he will consider both Insight Terminal Solutions’ defense of the previous ruling and the city’s disagreements with it “during the next phase of this litigation.”
It is familiar territory for Oakland, which unsuccessfully sought to ban coal from town last decade, inviting a federal lawsuit from Tagami. A judge ruled in his favor in 2018.
Insight Terminal Solutions was picked up by private-equity executives Jon Brooks and Vikas Tandon in 2018 during the company’s bankruptcy proceedings. The pair began negotiating a compromise with the city that would have precluded coal from being shipped from the terminal.
But the talks fell apart for reasons that never became public, leading Oakland to lose a second suit to Tagami in the Alameda County Superior Court after city leaders attempted to nix the developer’s ground lease.
Time and again, the city has been haunted by its original sin: approving a lease at the Army Base without securing any written agreement that coal would not be stored there.
Tagami said Wednesday that other permits required to begin construction on the terminal are not “discretionary,” which means city officials could not legally reject them for political reasons.
“You pay the fee, you submit the appropriate documentation and you get the permits,” Tagami said.
He estimated constructing the eventual terminal will cost between $118 million and $250 million, though he acknowledged that range is more of a “wild guess” than a calculation.
Ted Franklin, an environmental activist, said Tuesday his group No Coal in Oakland will openly lobby against private sector investments in the terminal’s construction.
“The whole idea that there is a market for seaborne coal is highly suspect,” Franklin said. He pointed to retaliatory Chinese tariffs that have throttled coal imports from the U.S., amid the country’s trade war with President Donald Trump.
Wolverine Fuels, a Utah-based coal company that could one day emerge as one of the Oakland terminal’s suppliers, was having trouble finding enough people to staff a coal mine there, the High Country News reported last year.
Meanwhile, several high-profile coal-mining efforts across the country have fallen flat, including one bid in Montana that valued the commodity at just one-tenth a penny per ton.
In Oakland, city officials may resolve to watch the calendar. Tagami now has a deadline of two-and-a-half years to begin construction on the terminal.
The Associated Press contributed to this report.
Shomik Mukherjee is a reporter covering Oakland. Call or text him at 510-905-5495 or email him at shomik@bayareanewsgroup.com.