Oakland’s long-running “coal war” goes to trial with developers pitted against the city

Monday's trial could open up the latest chapter in a long history of industrial air pollution in West Oakland.

OAKLAND — The long “coal war,” as it has become known in Oakland, will come to a head at a trial Monday that pits a prominent East Bay land developer against city officials and a chorus of environmental activists trying to prevent the transport of coal through the city’s harbor.

It’s a fight that has stretched on for more than a decade since developer Phil Tagami first received approval from the city to build a large marine terminal for bulk goods at the former Army Base in West Oakland, just across from the Bay Area Toll Bridge on I-80.

Ironically, the long delay — created by an extended legal battle, plus settlement talks that ultimately fell apart last year — has now become the city’s main argument for trying to void Tagami’s lease.

A superior court judge will decide if Tagami and his corporate partner, Insight Terminal Solutions, breached their lease agreement by not reaching key construction milestones for the 34-acre terminal.

At the heart of the dispute, though, is the question of whether Oakland’s port will participate in a pollutive coal industry, harboring bulk commodities that arrive by rail from Utah to be shipped overseas.

Monday’s trial could open up the latest chapter in a long history of industrial air pollution in West Oakland–a neighborhood divided by I-980, where rail, port and other industries have exposed residents to carbon dioxide emissions, diesel particulates and other health hazards for decades.

Emergency room visits or hospitalizations for asthma are two times higher there than the rest of Alameda County, according to a 2018 county study.

“You can’t have things like coal come through the front door of a community that’s already impacted by disparities,” said Miss Margaret Gordon, a longtime activist with the West Oakland Environmental Indicators Project. “If you bring the coal in, the new people who come here will be just as sick as us and our children.”

The history of the project has been complicated by technicalities, flip-flops and accusations from both sides that the other was working in bad faith.

Tagami initially signed a development agreement with the city in 2013 for the large marine terminal, with city officials insisting there was a verbal — but, crucially, an informal — understanding that coal would not be among the bulk goods shipped into town.

Tagami denies any such discussion, noting that long-range planning documents had always mentioned coal as a possible good that would be shipped at the terminal.

When the City Council learned in 2015 of a deal between Tagami and coal executives in Utah to ship the ash-colored mineral, it approved a ban the next year on the passage and storage of coal within city limits.

Tagami sued over a breach of agreement, and ultimately won both in federal court and on appeal, with Judge Vince Chhabria ruling there wasn’t enough evidence that coal transport would present a “substantial danger” to health or safety.

The city then sued in 2018 over a lack of timely construction–the trial that will begin Monday, with a county judge to decide on the project’s future after both sides agreed not to present the case to a jury.

In the intervening years, Tagami and the city had briefly been prepared to settle — after Insight Terminal Solutions went bankrupt and its ownership changed hands from the late Kentucky coal executive John Siegel to JMB Capital, a Los Angeles-based hedge fund whose controlling investor wasn’t so keen on shipping the ore.

But those discussions quickly fell apart over the “federal loophole” that would allow for the shipment of coal as soon as the terminal team changed its mind, said Bay Area lobbyist Greg McConnell, who represents JMB Capital.

“My clients kept trying to give them what they asked for — a ‘no coal’ deal — and the city kept coming up with reasons not to do it,” McConnell said. “We said that it was a federal issue; it’s not up to us to change the law.”

City attorney Barbara Parker’s declined an interview request ahead of Monday’s trial.

There’s a long history of environmental fights in West Oakland. Last year, state Attorney General Rob Bonta sued to stop materials company Eagle Rock Aggregates from building an open-air sand and gravel plant at the city’s port, citing the heavily polluted local air.

The coal products handled at the marine terminal would be mined in Utah — where the state legislature has dished out $53 million for the Oakland coal project — and only be stored, not burned, at the city’s port.

Still, environmental officials have worried about the hazards of coal dust mixing into the air. A study conducted this year in Richmond found that rail conveyance of coal increased the amount of fine particles, or particulate matter 2.5, in the atmosphere.

The “effects are borne disproportionately by the most vulnerable, including infants, children and the elderly, people of color, those with low incomes, and those with underlying health conditions,” reads the study by UC Davis researchers, commissioned by a California Air Resources Board.

Tagami, for his part, has said that train cars arriving to the terminal would be covered, preventing errant coal dust from flying off into the air — which the federal court in its 2018 decision agreed the city had neglected to consider as a mitigating factor.

Environmental advocates aren’t keen to believe him.

“Coal didn’t become part of the plan until all the ‘t’s were crossed and the ‘i’s were dotted,” Gordon said. “The city was duped.”

Neither ITS’ representatives nor Tagami, meanwhile, would confirm that “no coal” remains the primary option if the judge again sides with their team.

“We are developers; our tenants would consult with prospective beneficial cargo owners and rail carriers to make a decision on commodity line up,” Tagami said in an email. “We would not interfere with any of the 15,000 commonly shipped bulk commodities.”