By Margaret Gordon and Brian Beveridge
Local businessmen Phil Tagami, Omar Benjamin and Jerry Bridges are on the wrong side of history as they pursue the construction of a coal export terminal at the Oakland Global Trade and Logistics Center.
Oakland Global is the modern new cargo handling facility envisioned for the old Oakland Army Base, and few ever imagined that it might support the fossil fuel industry.
Oakland owns the property, but in its zeal to close a deal for development, the city gave sweeping authority over business activities there to Master Developer Tagami, in exchange for a fixed annual income.
Now Tagami says he has the right to generate those lease payments by any means possible, including building facilities for a failing industry like coal.
There is a national sea change in attitude on fossil fuels, as demonstrated by U.S. leadership at the recent Paris COP21 conference and ongoing public statements against coal by Gov. Brown and Mayor Libby Schaaf.
One wonders why the developer would be willing to burn political capital for a project with near universal opposition.
The answer is as old as capitalism itself, money. Tagami’s development company California Capital Investment Group (CCIG) has never had deep enough pockets for a project of the scale and complexity of Oakland Global.
The Port of Oakland has broken off negotiations with CCIG on numerous occasions for Port projects because Tagami couldn’t produce adequate financial statements.
To fill that void Tagami has brought in a series of larger development partners, including ProLogis, one of the largest logistics developers in the world.
But Prologis didn’t sign on to underwrite the entire project, only to build their own small parcel in what is called the Central Gateway. In fact, Tagami stands to make millions of dollars as overall landlord of Oakland Global for the next 66 years – if he can hold on to the deal he struck.
But despite having too much responsibility with too little resources, Tagimi’s deal shares the City’s funding woes. Financial complications abound in the deal, starting with the need to match a state transportation grant of $242 million.
With a private investment estimated at $250 million, a loose bulk commodities terminal, as facilities handling grain, gravel, ore or coal are called, would by itself cover the entire matching funds requirement.
However, there are political solutions that don’t require selling out to fossil fuel development.
CCIG hasn’t got that kind of money or the apparent business ties to get it. Enter Bridges, Benjamin, and complex links to community development money in Utah. If the Federal Department of the Interior and the State of Utah were to allow it, $53 million of mining lease rebates intended to help working communities in Utah coal mining towns could instead be used to increase health impacts on communities all along the rail line from Utah to Oakland.
Tagami, Bridges and Benjamin can then use this bucket of public money to leverage Wall Street investments in their get-rich scheme.
According to the Virginian-Pilot newspaper, former Port of Oakland Executive Director Bridges has been shopping concepts for a coal export terminal somewhere in the country ever since he left his job as chief of the Virginia Port Authority.
That Port Authority rejected the coal idea, as did a port city in Florida. A very similar coal project was rejected in Oregon just last year, but Bridges and Benjamin are now in Oakland selling something no one else wants.
Even longshore workers, who are guaranteed the few potential jobs that a coal terminal would provide, have rejected the proposal for health and safety reasons.
Things have changed. Oakland no longer has to accept reject ideas. We’re not that broke any more. The Oakland economic Renaissance may bring its own problems of equity and opportunity, but we’re no longer holding out the begging-bowl to profiteers.
Oakland is an economic attraction on its way to being a new regional powerhouse. Emerging green tech industries don’t want to share the streets with dusty 19th Century dinosaurs like fossil fuel.
The Port of Oakland has signed lucrative deals to develop bulk grain and frozen food export facilities. Coal has no place in their business mix.
The amazing thing about this coal proposal is how it has galvanized opposition between groups in the region who don’t always see eye-to-eye: Big environmental groups, local grassroots coalitions, organized labor and the faith community all say we must put the health and safety of our communities ahead of money.
Margaret Gordon and Brian Beveridge are co-directors of the West Oakland Environmental Indicators Project (WOEIP).