Insight Terminal Solutions, LLC Issues Open Letter to Citizens of Oakland, California

A No Coal Solution Has Been on the Table for Over 2 Years, but Oakland Politicians Have Refused to Take the Deal

The City Is Risking Its Own Survival by Insisting on Having a Trial It Is Likely to Lose, With the Negative Impacts Felt by Everyone

It Is Time for Oakland Residents to Have a Voice in the Process Before It Is Too Late

OAKLAND, Calif.–(BUSINESS WIRE)–Insight Terminal Solutions, LLC Issues Open Letter to Citizens of Oakland, California:

For two and a half years, the current owners of Insight Terminal Solutions (ITS) have continuously offered a no-coal solution which would ensure that coal will never be shipped out of Oakland. Prior to our acquisition from the previous owner who was a former coal mining executive, such an offer was never put on the table, and we did it immediately in the hopes of finding a path forward.

After a year of knocking on doors and overcoming numerous obstacles, we reached a term sheet settlement that would enable the construction of a viable terminal that would be prohibited from shipping coal. While City Attorney Barbara Parker and Mayor Libby Schaff publicly proclaimed a deal was done to keep coal out of Oakland, we stayed silent while others continuously discussed “confidential” negotiations, assailed our character, and misrepresented our intentions. While they issued press releases, tweets, and statements, we focused our efforts working to deliver a win-win solution for all parties involved.

Disappointingly, city leadership has been unable to simply accept a win and move forward. Despite our best efforts, it appears they have torpedoed a settlement that would guarantee that no coal is shipped through Oakland and are determined to make sure that this case goes to trial in July. While this is NOT our preference, we are confident in our legal arguments and are buttressed by the knowledge that, to date, the city has lost every legal battle at significant expense to the tax paying residents.

We are writing to you directly now so that you may understand the substantial and grievous risks that your elected leaders are taking by moving forward with this lawsuit, as well as some basic facts.

– WE DO NOT HAVE ANY COAL OR COAL RELATED INVESTMENTS. Politicians and the press have referred to us as “Big Coal” or “Coal Money,” but the fact is that we have zero investments in coal or related industries (unlike the prior owner).

– THE CURRENT LEGAL DISPUTE IS NOT ABOUT COAL. The issue of the shipment of coal was settled by Federal Courts. The courts ruled the city had no authority to ban shipment of coal through the terminal. The city lost at trial and on appeal, meaning the matter is closed and the city is powerless to ban coal shipments. And while it has the legal right to ship coal through the terminal, ITS has offered in settlement to forfeit that valuable right as the city acknowledged in its February 22 press release.

– SO, WHAT IS THIS LAWSUIT ABOUT? The city is trying to cancel the lease for the land on which the terminal will be built by alleging the developers didn’t meet certain buildout timelines. This is ludicrous. The developers are sophisticated parties with a proven track record of public developments. They secured hundreds of millions of dollars in grant money for the terminal project and spent millions more. The city caused the delay by refusing to issue permits and other required approvals in violation of binding agreements. Imagine a landlord trying to evict a tenant for not fixing a leak, but the landlord refused to grant him permission to fix it.

– WHAT HAPPENS IF THE CITY LOSES AGAIN? The current lawsuit includes a claim for monetary damages. Since the city caused the delay on which it relies to purportedly end the lease, the city will likely lose the pending case. The terminal will be free to ship coal or almost any commodity we or any future owner chooses. In addition, the city will likely be liable for significant financial damages that it does not have the capacity to pay. The city may have to seek bankruptcy protection like Detroit and cut back on basic services for residents.

– WHAT ABOUT “LOOPHOLES”? Rail in the United States is regulated by the Federal Government and is not subject to local laws. Since we have no ability to change Federal law, we’ve offered severe economic penalties to ensure that neither we nor any subsequent owner will try to use federal law to ship coal. Furthermore, the city agreed to a design with rail and took hundreds of millions of grant money on the basis that rail is cleaner than trucking.

Given the unwillingness of city leaders to accept a positive solution, we have decided to make an offer directly the citizens of Oakland, because your lives are the ones that would potentially be impacted by your leaders’ behavior. Here are the major points we offer.

– THE TERMINAL WILL BE PROHIBITED FROM SHIPPING ANY COAL

• The City will have the right to cancel the lease immediately upon a violation and charge a fee of $5 million for every train car of coal unloaded. This prohibition will run with the land and be binding upon us and all subsequent owners/operators.

– THE CITY WILL BE ENTITLED TO THE BASE RENT FOR THE ENTIRETY OF THE LEASE

• The city will receive almost $1 million a year in rent for over 60 years.

– THE DEVELOPERS WILL DISMISS THE LAWSUIT AND THE CITY WILL ISSUE PERMITS SO CONSTRUCTION CAN FINALLY BEGIN

• After years of delay, we can find the right partner and create hundreds of good union jobs that are so desperately needed at this time.

If you are concerned about the city recklessly gambling with your quality of life, please reach out to your elected officials and urge them to finally say yes. We have been trying to deliver what they say they want for two and a half years, and we fear they are more interested in risking the city’s solvency to keep the issue alive for campaign and fundraising purposes rather than delivering for their voters.

A settlement guarantees no coal will be shipped and a terminal is built that will provide good paying union jobs and millions of dollars in revenues to a city that currently has a $350 million deficit. If there is no agreement, the city will not be able to ban the shipment of coal in the future and the city’s solvency will be put at great risk.

Contacts

For more information or to arrange an interview, please contact Greg McConnell at gmc@themcconnellgroup.com 510-834-0400