Developer’s attorney says Oakland anti-coal vote could lead to lawsuit

Stevie Johnson holds up a pair of signs during a protest outside City Hall before a scheduled vote, Monday, June 27, 2016, to decide whether to ban rail shipments of coal over concerns it would pose a public health or safety hazard in Oakland, Calif. A yes vote Monday by the Oakland City Council could scuttle the plan to build a marine terminal that would serve as a gateway for Utah coal heading to Asia. (AP Photo/Janie Har)
Stevie Johnson holds up a pair of signs during a protest outside City Hall before a scheduled vote, Monday, June 27, 2016, to decide whether to ban rail shipments of coal over concerns it would pose a public health or safety hazard in Oakland, Calif. A yes vote Monday by the Oakland City Council could scuttle the plan to build a marine terminal that would serve as a gateway for Utah coal heading to Asia. (AP Photo/Janie Har)

OAKLAND (BCN) — The attorney for the developer of a marine terminal that’s being built at the former Oakland Army Base is threatening to sue the city of Oakland because of the City Council’s vote Monday night to ban the handling and storage of coal in the city.

At its meeting Monday, the council voted to approve both a permanent ban on the transport, transloading, handling and storage of coal and petroleum coke at bulk materials facilities or terminals in Oakland and to specifically ban the handling and storage of coal at a terminal at the former Oakland Army Base that is being built by developer Phil Tagami and business associate Jerry Bridges.

The City Council said a report from the city’s environmental consultant, Environmental Science Associates (ESA), provides the city with a scientific and legal basis for banning coal.

The report says that railcars being unloaded at the terminal could send coal dust wafting over two neighboring schools, a child care center, commuters at the Bay Bridge toll plaza and parks near Interstate Highway 880.

But David C. Smith, an attorney for the Oakland Bulk and Oversized Terminal, the developer of the terminal site, warned the City Council in a strongly worded letter that he submitted before the meeting that a 2013
development agreement is a city law and a duly-enacted ordinance and the city would violate it by banning coal.

He wrote that such a vote would constitute “conscious and intentional breach of their oath of office,” a “pronouncement to the world that Oakland is not a trustworthy or reliable place to invest or do business,” and would expose the city and its general fund to “hundreds of millions of dollars in liability.”

That would include “the return of almost $150 million to the state of California and hundreds of millions more in damages to the developers of the project,” Smith wrote.

Smith wrote, “Certain elected officials are committed to ‘do anything’ to keep coal (and apparently a long list of yet-to-be-disclosed other politically disfavored commodities) out of Oakland” in order to win votes but “they must also realize and own that such actions breach existing and binding legal obligations, exposing the city to potentially unprecedented legal liability.”

Smith accused the city of engaging in a paper trail dump by waiting to release a 225-page staff report on the coal issue late Friday afternoon, the last working day before the council’s meeting on Monday night.

He also wrote, “The staff report makes no effort to reconcile how a report (the environmental study) dated the exact date of the staff report itself could possibly serve as the evidentiary support for that staff report.”

Smith alleged, “The ESA report is openly biased, giving undue credence to comments opposing the project and summarily dismissing expert testimony and evidence that coal can be and is daily transported safely
throughout the United States Tuesday.

He wrote, “The paper trail dumped last Friday was clearly an attempt to justify a course of action that had long-since been committed to. While that may accomplish a political outcome, it is only the first steps towards an unfortunate legal outcome.”

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