OAKLAND, Calif. (CN) — The lead developer of a controversial coal terminal project in Oakland, suing the city over banning coal, finally left the stand Friday after weeks of testifying in state court.
Developer Phil Tagami has led the witness list in a trial of his claims against the city in Oakland suburb Hayward, before Alameda County Superior Court Judge Noël Wise. Tagami, a partner at Oakland Global Rail Enterprise, claims that his company lost more than $148 million in profits after the city introduced an ordinance to ban coal at its terminals.
Tagami entered into an agreement with Oakland in 2013 to build an export terminal at the old West Oakland Army Base at Port of Oakland, and now claims that the city sabotaged the project by creating an anti-coal ordinance.
When news broke in 2015 that Tagami was discussing transporting coal from Utah through the terminal, interest groups protested. The city, facing pushback, approved an ordinance banning coal handling and storage — including at the terminal. Tagami then sued in 2016 alleging breach of contract and tort claims against the city. A federal court ruled in 2018 that Oakland officials applying the ordinance to the terminal breached their agreement with the developer.
With its ability to apply the coal ban on the project blocked, Oakland ended Tagami’s lease — saying he failed to meet their agreement’s construction milestones, according to local outlet Oaklandside.
Now, Tagami’s suit in state court blames those construction delays on the city’s coal ban. Oakland, which countersued for breach of contract in 2020, says that the developers hurt the project by missing construction milestones while scheming to close a lucrative coal export deal.
When the trial began on July 10, the grassroots interest group No Coal in Oakland said in a statement that it has spent years protesting Tagami’s proposal. A coal export deal would have meant the developer would give Utah counties coal shipping rights to at least 49% of the bulk terminal’s 9-10 million ton annual shipping capacity in exchange for $53 million in project funding.
“Oakland has long been a center for highly-polluting transportation activity, resulting in disproportionately high health impacts for the residents of West Oakland,” the group said.
Tagami has been on the stand for weeks, among other witnesses. Asked on Wednesday about the delays meeting project milestones, he said that the development process could not be rushed, as otherwise, quality control would have been sacrificed.
“The challenge is in the risk taken to accelerate,” he said.
Tagami detailed the process when the city told him in 2015 that the project as proposed might require discretionary permits, saying he left a meeting abruptly when told this, out of disappointment.
“I didn’t run out or crawl out, I walked out,” he said. “But we did sign this out of protest.”
“Nobody put a gun to your head and forced you to sign a contract, right?” Daralyn Durie, an outside attorney representing the city, asked.
“Not a gun, no,” Tagami said.
However, under questioning by his lawyer Barry Lee on Friday, Tagami said he misspoke about signing an amended agreement with Oakland, and that “We were reserving our rights in that matter.”
Tagami said that the city did not fulfill its obligation to finish public improvements needed at the terminal to get the project underway, or to pursue public funds needed for some pieces of it. He said they kept changing what was expected of the project, including if they might reopen the state environmental review process on the project and review each commodity considered for the terminal shipping processes.
He also said that the city was aware in 2013 that coal was on the list of potential commodities, although that year his company published a newsletter saying there were no plans to pursue shipping coal at the terminal.
Tagami said his company pursued the project despite knowing the city’s growing opposition to coal, with an eye for profit.
“We believed the development agreement and entitlements were sound, and believed that there was a marketplace that needed this facility,” he said.
The trial is expected to last into August. Neither the judge nor the city attorney’s office have indicated when both sides’ closing arguments could take place.
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