Tagami Sues Again Claiming City’s Liability May Reach Hundreds of Millions of Dollars
As his plan to build the West Coast’s largest coal export facility falters, developer Phil Tagami has launched a second lawsuit against the City of Oakland, blaming the City for his inability to meet construction deadlines set forth in his lease and claiming the City may owe his companies Oakland Bulk and Oversized Terminal (OBOT) and Oakland Global Rail Enterprise (OGRE) hundreds of millions of dollars in damages.
In a 50-page complaint filed in Alameda County Superior Court today, OBOT and OGRE allege that the City unlawfully interfered with Tagami’s efforts to build the project because he refused to promise not to ship fossil fuels through the marine terminal.
The complaint tracks a series of allegations the developer made in a notice of claim submitted to the City in October and analyzed by No Coal in Oakland in our post entitled “City Says Coal Terminal Lease is Dead; Tagami Threatens New Suit.” According to the City, the terminal lease expired automatically on November 22 because Tagami failed to meet critical deadlines in his lease, not because the City opposes use of the terminal to ship coal.
“This isn’t about coal,” City Attorney Barbara Parker said in a statement issued last month. “This is about the developer’s failure to meet its obligations and perform the work it agreed to do. [The developer] had years to move the project forward and has used every excuse in the book to justify its failure to perform.”
In 2016, the City signed the 66-year lease with OBOT based on Tagami’s plan to develop a ship-to-rail terminal at the West Gateway, a 34-acre corner of the former Oakland Army Base. Tagami claimed the terminal would provide a great economic boon to West Oakland, even though his environmental documents estimated that the terminal would produce only 60 permanent full time jobs for members of the International Longshore and Warehouse Union.
Tagami’s financial ability to provide any jobs is increasingly in doubt. In a September letter to Tagami, the City asserted that he has fallen short on minimum project milestones and failed to provide key paperwork required before construction can begin.
“A week later, Tagami submitted binders with schematic drawings of the terminal and wharf and rail improvements that he had to carry out under the lease,” reported the San Francisco Chronicle. “City officials said the plans were incomplete and that he failed to provide detailed information on subtenants and business partners.”
Tagami’s new suit asserts he has already spent $30 million on the project. This is a curious claim given that OBOT recently resubmitted merely “conceptual” drawings from 2015. The complaint provides no details to explain how Tagami spent the $30 million or how Oakland is facing potential liability of “hundreds of millions of dollars” as asserted in a press release issued today by OBOT. Tagami is also asking the court to require the City to reinstate his lease and give him an extension of at least two years to fulfill his obligations under the lease.
Meanwhile, the City and Tagami remain locked in ongoing litigation over the legality of the City’s application of its ban on coal handling and storage to the West Gateway. The City has appealed a decision by U.S. District Judge Vince Chhabria, which favored Tagami, to the Ninth Circuit. The City’s and Intervenors Sierra Club and SF Baykeepers’ briefs are due next Monday, December 10.
No Coal in Oakland is continuing to wage a campaign to support the City. All are welcome to join us at our next community meeting this Thursday, December 6th at 7 p.m., at the West Side Missionary Baptist Church, 732 Willow Street in West Oakland (map).