Oakland Developer Sues City Over Ban on Coal at New Port Facility

Alleging "an unconstitutional abuse of power," a developer who holds rights to build a new bulk shipping terminal near the Bay Bridge is suing the city of Oakland over its ban on coal shipments through the planned facility.

Developer Phil Tagami has been embroiled in a bitter dispute with Mayor Libby Schaaf and other city officials over whether coal and other fossil fuel products will be shipped through the Oakland Bulk and Oversized Terminal.

The city granted development rights for the project at the former Oakland Army Base to Tagami, best known for the redevelopment of the landmark Rotunda Building and nearby Fox Theatre in downtown Oakland.

Tagami initially promised that the facility would not be used for coal shipments. But last year, he and development partners declared that the $500 million project would not be financially viable unless it could handle bulk cargo like coal and petroleum coke.

Local criticism of the project grew when it came to light that the developers had courted, and eventually won, an investment from four coal-producing counties in Utah. After the Oakland City Council voted in June to ban coal shipments through the bulk terminal, the four Utah counties dropped their plan to contribute $53 million to the project.

In Tagami's lawsuit, filed Wednesday in U.S. District Court in San Francisco, his lawyers argue that the city's coal ban violates the U.S. Constitution's Commerce Clause and several federal laws.

The clause the suit cites gives Congress the power to regulate interstate and foreign commerce.

The city was moved in part by concern from community groups that dust from coal shipments could worsen health issues in West Oakland, a part of the city with a high incidence of respiratory illness and other physical problems traceable to its proximity to the port of Oakland and an already high volume of truck and rail traffic.

Environmental advocates argued that allowing coal exports through the new facility would encourage continued use of fossil fuels overseas and add to greenhouse gas emissions linked to climate change.

But Tagami's lawsuit says that "the justifications for the ban ... are illusory" and that the city could accomplish its goal of minimizing the impact of coal shipments without an outright ban.

The suit also argues that city officials were well aware of the possibility that coal would be one of the commodities shipped through the bulk terminal, but did not include any restrictions on handling coal in development agreements with Tagami.

Here's the full lawsuit: