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SALT LAKE CITY — Oakland city officials terminated a contract with a would-be developer of a deep-water export terminal that would ship Utah coal to Asian markets.
The city last month said Phil Tagami's company failed to meet construction deadlines for the project planned at the former Oakland Army Base and is now seeking $1.6 million in damages.
Attorneys for Tagami disagree, and say the city has thrown up impediments to getting the project done.
Tagami sued Oakland after it adopted an ordinance prohibiting the handling and shipping of coal at the planned bulk terminal. The ordinance was struck down in a federal court ruling in May, a judgment the city is appealing.
A coalition of coal-producing counties in Utah inked an agreement to pursue the export terminal to access foreign markets in light of declining U.S. consumption of coal due to shuttered power plants.
The coalition would have tapped into $53 million in Community Impact Board funding once the terminal became a reality, but that was later rescinded in light of scrutiny and legal questions.
Utah lawmakers later passed a law that would allow the funding to move forward.
The $250 million project continues to remain a question mark as legal wrangling keeps it in limbo.
In October, Tagami filed a claim against the city hinting at another lawsuit, and his attorneys are indicating an appeal of the contract's termination.
Oakland officials, who did a study and held multiple public hearings probing the health effects of handling Utah coal, said the decision to yank the contract is not about the fossil fuel.
"This isn’t about coal. This is about the developer’s failure to meet its obligations and perform the work it agreed to do," said Barbara J. Parker, Oakland's city attorney. "(The developer) had years to move this project forward, and has used every excuse in the book to justify its failure to perform. This terminal is a critical project that will be an economic engine for West Oakland, our entire city and the region. The city must move this project forward with partners who are able to get the job done.”
Utah's elected leaders have lamented Oakland's interference in commerce involving a legal product.
"It's not just a Utah issue," Utah Gov. Gary Herbert said in a legislative hearing in 2016. "Wyoming and others want to ship — a legal product by the way that is something that is certainly in demand in the marketplace — and yet we have somebody arbitrarily saying we are not going to let it be shipped out of our ports," he said.
But Alliance for a Better Utah insisted Tuesday it is time for Utah to drop its plans for the terminal.
"While this new development does not bring a conclusion the saga of the Oakland coal terminal, it offers another opportunity for Utah leaders to re-examine their commitment to this irresponsible project," said the group's executive director, Chase Thomas.