A California judge has ruled that the city of Oakland interfered with development of a now-cancelled coal and petroleum coke export terminal.

Efforts by the city, including enactment of an ordinance banning coal handling, were not supported by evidence and breached agreements with developers, judge Noel Wise of the state Superior Court of Alameda County ruled on 27 October.

“The city breached the lease when it hindered or delayed the project due to political and community concerns surrounding coal as a potential commodity to be shipped through the new terminal,” Wise’s proposed statement of decision said.

The city is considering its options before making a decision about its next steps.

“We are disappointed that the trial court did not recognize what we strongly believe the evidence demonstrated and contract language required,” Oakland city attorney Barbara Parker said.

Developer California Capital Investment Group (CCIG) chief executive Phil Tagami did not respond to a request for comment. The company originally signed an agreement with the city in 2013 to build a terminal a former US Army base, but problems began in 2015 when Oakland officials learned that CCIG was considering shipping coal through the facility.

Localand state officials fought for years to prevent the proposed Oakland Bulk and Oversized export terminal in California from shipping western bituminous coal and petroleum coke. Officials previously fought efforts by Bowie Resource Partners, now Wolverine Fuels, to build an export terminal in the city.

Oakland residents and others had complained that dust would from coal handling at the facility. But a federal court found that the city had not provided enough evidence that shipping coal through the city would present a substantial danger to residents. While that lawsuit proceeded, CCIG and the city in February 2016 agreed on a new lease.

CCIG agreed to a new deal with the city in January 2022 to settle disputes and allow the project to move forward. But developers had to agree that the facility would not handle coal and petroleum coke. The plan originally called for the terminal to handle 5mn metric tonnes/yr of coal and petroleum coke, plus another 2.5mn t/yr of other commodities.

Settlement talks later fell apart and lawsuits filed by each party headed to court. The city sued, saying that developers failed to meet deadlines for set in the February 2016 agreement, while CCIG said Oakland officials’ actions breached the contracts.

Wise last week ruled in favor of the developer, saying that it should have been awarded that an extension on construction deadlines.

Wise’s decision triggered a two-weak deadline for the city to file comments before the decision becomes final. After that, the court will decide on any appropriate penalties and the city of Oakland could file an appeal.

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