New terminal developer threatens to stick with coal unless Oakland pays him plenty
Vikas Tandon wants the City to fork over piles of money, to lower his rent, to extend the West Gateway lease, to provide construction financing, and/or to hand over additional property. The hedge fund operator — who late last year acquired a contested sublease on the Oakland waterfront property where developers have been angling to build a coal terminal — met via Zoom in early May with anti-coal activists and attorneys from a half-dozen local and national organizations, and told participants that in return for significant concessions from the City he’ll develop the site as something other than a coal terminal (alternate commodity possibilities: soda ash, wood chips, iron ore).
If Tandon doesn’t get what he wants, he says he’ll stick with coal because that’s what the hedge-fund manager claims will “maximize value” for the investors he represents.
Tandon seemed eager to enlist No Coal in Oakland, The Sierra Club, Youth vs. Apocalypse, San Francisco Baykeepers, EarthJustice, and APEN (Asian Pacific Environmental Network) to help convince City officials to meet his demands. But his claim to have coal investors waiting in the wings was met with frank skepticism, given industry veteran John Siegel’s years of insurmountable difficulties scrabbling for financing to build a coal terminal in Oakland; given the inability of would-be operators of a coal terminal in Longview, Washington to obtain funding for that project; and given the general decline of the coal market. (The state of Utah may still kick in significant financing to enable shipment of that state’s coal through an Oakland terminal, though the Utah legislature declined to bail out Siegel last summer. NCIO and other allies are working closely with Utah activists to oppose that possibility.)
Tandon’s pitch seemed to be aimed at heading off a trial in state court that will decide the validity of the City’s termination of its primary lease with Phil Tagami (see Oakland sues would-be coal developers). A mediation in that case is to take place later this month; if mediation fails to resolve the dispute, a trial is scheduled for March 2022. If the City prevails at trial, Tandon’s investment in the West Gateway sublease will amount to a loss of millions of dollars. Yet if Tagami prevails, it’s not at all clear that Tandon can raise an estimated $250 million needed to build a coal terminal while the industry is in free fall and G7 nations are ending financial support for development of coal-fired power plants in developing countries.
We can’t know for certain that Mr. Tandon is bluffing about coal investors, but his story is full of holes and dripping with condescension. “I can’t get the city to talk to me,” he said, but that claim is contradicted by explicit, written offers to negotiate tendered by Oakland’s City Administrator Edward D. Reiskin (see Oakland Post’s coal op-ed is riddled with errors). Tandon made a point of telling participants in the May meeting that he drives an electric car and has solar panels on the roof of his home, but that he is bound by “fiduciary responsibility” to maximize profit. However, none of the anti-coal participants in the Zoom call were buying his really, I’m a good guy story, not when “fiduciary responsibility” in hedge-fund speak translates to “I placed a multi-million dollar bet that I could extort money from the City of Oakland, and my wealthy associates expect me to follow through.”
Organizations represented in the meeting with Tandon do not plan to lobby the city on Tandon’s behalf. Instead, participants made clear that our community is unified in opposing shipment of coal or other harmful commodities from Oakland’s waterfront; that ongoing consultation with the West Oakland community is key to determining an acceptable, workable future for the West Gateway property; that the court’s ruling in Tagami’s federal lawsuit leaves multiple paths open to stop an Oakland coal terminal; and that environmental justice issues (under Title VI and AB 617) will require mitigation of any harm caused by the property’s development or operation, to protect community health and safety.
The meeting’s most constructive outcome? A renewed commitment among No Coal in Oakland, The Sierra Club, Youth vs. Apocalypse, San Francisco Baykeepers, EarthJustice, and APEN to work together to assure coal will never be shipped from Oakland’s waterfront, and that the future of the West Gateway will be determined by our community — not by profiteering hedge-fund managers.
Image credit: jaqian (Flickr) CC By 2.0.