Judge grants new life to contested Oakland ‘coal’ terminal

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.

A gravel pit, center, is seen on land owned by California Capital & Investment Group CEO Phil Tagami, of Oakland, is seen along Burma Road in West Oakland, Calif., on Thursday, July 6, 2023. Downtown Oakland can be seen on the upper left.(Jane Tyska/Bay Area News Group) 

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.”

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