Gov. Brown delivers huge blow to Oakland coal plan

Photo: Connor Radnovich, The Chronicle Phil Tagami at the site of a development at the Oakland Army Base...

A developer’s plan to ship coal from Oakland’s docks took a huge blow Friday when Gov. Jerry Brown signed a bill to block state funds for any coal-shipping terminals in California and vowed to keep up a fight against the fossil fuel.

The news came weeks after the Oakland City Council voted unanimously to bar shipping and handling of coal throughout the city, sending the proposed terminal by developer Phil Tagami into an uncertain future. Tagami is a friend and longtime political supporter of Brown’s.

“I think it’s a real win for the people of California,” said state Sen. Loni Hancock, D-Berkeley, who sponsored the legislation, which was the only one of four coal-curbing bills she pushed this year that won the Legislature’s approval. It passed the Senate on Thursday and Brown signed it into law less than 24 hours later, with a message that underscored his role as a leader in the battle against climate change and broke his long silence on the coal controversy that rattled his former hometown.

“I believe action on multiple fronts will be necessary to transition away from coal,” Brown said in the message. “In California, we’re divesting from thermal coal in our state pensions, shifting to renewable energy, and, last year, coal exports from California ports declined by more than one-third, from 4.65 million to 2.96 million tons. That’s a positive trend we need to build on.”

Brown went on to praise Oakland for taking steps to bar coal from a bulk commodities terminal that Tagami is building near the east end of the Bay Bridge. On June 27, the Oakland City Council voted to disallow the plan, days after the city’s hired environmental consultant, ESA, released a report saying that coal dust can damage organs, stunt children’s growth and cause cancer.

Oakland Mayor Libby Schaaf, a former aide to Brown, called the governor’s statement “a humbling surprise,” particularly because the governor called on other cities to follow Oakland’s lead.

“For him to recognize the contribution that we made through this process, and encourage others — including the state — to follow suit, is incredibly validating,” Schaaf said.

Tagami declined to comment Friday. His lawyer, David Smith, had hinted at possible legal action against the city in a letter to the City Council shortly before the June 27 vote. He warned that a coal ban would breach the city’s 2013 development deal for the Oakland Bulk and Oversized Terminal — and that any councilmember who supported such a ban would violate his or her oath of office.

A spokesman for Tagami’s company, California Capital & Investment Group, said Friday that the developer and his shipping operator, Terminal Logistics Solutions, are still “evaluating their options.”

But with the legislation signed and a vow from the governor to fight coal, Oakland’s ban is not the only problem developers face if they decide to move ahead with the coal terminal.

Brown, who served as mayor of Oakland from 1999 to 2007 and appointed Tagami to serve as a port commissioner in 2000, had for months kept mum on the Oakland coal shipping plan even as it drew stern denunciations from Hancock, Schaaf, Assemblyman Rob Bonta, D-Oakland, Assemblyman Tony Thurmond, D-Richmond, and 11 East Bay mayors in cities surrounding Oakland.

Tagami and his allies have argued that a prohibition on coal could hinder the larger 130-acre development that California Capital & Investment Group is building at the long-defunct Army base in West Oakland, which requires millions of dollars in state funding and will add rail lines, warehouses and maritime support services to what has long been a vast industrial hinterland. Tagami says the project will generate thousands of jobs, some of which could be at risk if the city bars a legal commodity, he says.

Schaaf takes exception to those claims, saying it was the coal proposal itself — not the City Council’s ban — that slowed the Army base project down.

“Including coal jeopardized funding sources, and certainly for this project it required so many entities to spend time, money and energy on protecting the community from this dangerous commodity, when we could have been moving toward something that everyone would welcome,” Schaaf said.

Hancock argued, further, that if the Army base project can succeed only by putting “the largest coal export depot on the Pacific Coast right near the Bay Bridge,” then it was a flawed business proposition from the get-go.

Rachel Swan is a San Francisco Chronicle staff writer. Email: rswan@sfchronicle.com Twitter: @rachelswan