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Insight Terminal Solutions OBOT Part 2 On How City Of Oakland Stymied BCDC Permits

Oakland (kinda) – In Part One of what has turned out to be a series called “Insight Terminal Solutions OBOT On How City Of Oakland Stymied BCDC Permits”, the following, was posted here at Oakland News Now:

According to the letter posted below from lawyer Marc Stice of Stice and Block LLP and to Oakland City Administrator Sabrina Landreith, Phillip H. Tagami (Phil Tagami), the main project developer working with Insight Terminal Solutions, had gained approvals from the Bay Conservation and Development Commission, but they were contingent on actions by the City of Oakland, acting in its role as contract developer partner in the OBOT project.

The letter points to the City of Oakland not acting in what is called “good faith” – where the City of Oakland would normally carry out its work as contract developer partner in the OBOT project, in the case of OBOT, it did not do that.

Note the date of the letter: September 28, 2018. That’s months after Phil Tagami won his court battle to have the “Oakland Coal Ban” overturned. Contrary to erroneous and race-bating talk, silly and incorrect reports of “black leaders” being lobbied by Insight Terminal Solutions CEO John Siegel were just that, and had nothing, zero do with the overturning of the “Oakland Coal Ban”: Phil Tagami did.

The fact is that the City of Oakland was a main partner in pre-development of the OBOT bulk terminal. Moreover, and contrary to more untruths, the City of Oakland’s focus was the development of a low emissions bulk terminal. Now former Oakland Economic Development Director Fred Blackwell said that the OBOT was to be environmentally-friendly. Watch:

Moreover, and something the media fails to report, Phil Tagami himself insisted on the use of covered rail “hopper” cars, and even fired one uncooperative terminal operations partner leading to the entry of Insight Terminal Solutions into the project.
Here’s the letter, and with addresses, phone numbers, and emails removed; the City of Oakland’s publicly-known physical address for public officials remains, but the specific phone numbers for those officials were removed, as well.

Marc Stice
September 28, 2018
City of Oakland
Attention: City Administrator
City Hall
1 Frank H. Ogawa Plaza, 3rd. Fl.
Oakland, CA 94612
Office of the City Attorney
Attn: Attention: Supervisor, Real Estate Unit
City Hall
One Frank H. Ogawa Plaza, 6th Fl.
Oakland, CA 94612
Reference: Oakland Army Base — Public Access Improvements Required Under
Amendment One to BCDC Permit M2013. 013, Dated June 5, 2014

Dear Ms. Landreith and Ms. Patel:

This letter is delivered in conjunction with that certain Army Base Gateway Redevelopment Project Ground Lease for West Gateway (the “WGW Lease”), dated as of February 16, 2016, and entered into by and between the City of Oakland (“City”) and Oakland Bulk and Oversized Terminal, LLC (“OBOT”). Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the WGW Lease.

This letter is to inform you that OBOT has elected, under the reservation of rights set forth below, to proceed with the construction of the public access improvements (the “West Burma Public Access Improvements”) described in the plan set titled “BCDC Public Access, Oakland Army Base, 100% Construction Documents” and dated September 1, 2017” as such plans are updated to meet the requirements of BCDC’s conditional approval dated October 17, 2017 (the “BCDC Conditional Approval”). The West Burma Public Access Improvements were included as part of the public improvements to be constructed under Amendment One to Permit M2013.013 issued by the Bay Conservation and Development Commission (“BCDC”) on June 5, 2014 (as amended, the “Burma Road BCDC Permit”). As you are aware, the City, in an effort to complete the public improvements of the Oakland Army Base redevelopment project and close out the related permits, has requested that California Capital & Investment Group, Inc. (“CCIG”) join in a request to amend the Burma Road BCDC Permit to (1) remove CCIG as a permittee and (2) make certain amendments to the permitted work/required mitigation, including without limitation, the removal of the West Burma Public Access Improvements (the “Burma Road BCDC Permit Amendment Application”). (See letters dated May 4, 2018 and July 26,

Stice & Block, LLP
City of Oakland
September 28, 2018
Page 2

2018.) In concert with such letters, the City requested that OBOT submit an application for a BCDC Permit related to improvements to the WGW Lease premises with the hopes that the mitigation required by such future BCDC permits would equal or exceed what is required by the West Burma Public Access Improvements and therefore mollify BCDC and assist in its approval of the requested amendment.

Thereafter, the City sent its letter dated September 21, 2018, alleging that OBOT was in default of its Minimum Project obligations under the WGW Ground Lease. OBOT provided the City with written notice that while OBOT disagreed with such allegation, it is proceeding with its efforts to design, permit and construct the West Gateway bulk terminal project to the extent it is able to do so given one or more Force Majeure matters.

In furtherance of such efforts, OBOT has had continued communications with BCDC regarding a proposed application for a BCDC permit for a perimeter fence for the WGW Lease premises and a subsequent application for a BCDC permit for the West Gateway bulk terminal project. It is OBOT’s understanding from these communications that (1) BCDC staff is going to deny the Burma Road BCDC Permit Amendment Application and are threatening to initiate an enforcement action for failure to provide the improvements required by the Burma Road BCDC Permit and (2) any resistance to such enforcement efforts would delay consideration and issuance of further BCDC permits related to any portion of the Oakland Army Base redevelopment project.

In order to avoid such delays, OBOT desires to proceed with the construction of the West Burma Public Access Improvements in a manner that complies with the CAB Public Improvement Community Benefits. OBOT will advance the costs for such work, subject to a reservation of a right of reimbursement from the City for the third party costs related to the construction of improvements that are not credited as mitigation for BCDC permits issued for OBOT improvements to the WGW Lease premises (including, without limitation, wharf, rail, and the terminal). OBOT does not opine or guarantee whether all or any portion of the West Burma Public Access Improvements costs will be credited to any such mitigation to the WGW Lease premises.

The construction of the West Burma Public Access Improvements will require:

(a) The City and CCIG to request the amendment of the West Burma BCDC Permit
required under the BCDC Conditional Approval;
(b) The City to provide OBOT with a right of entry over City property reasonably
necessary to complete the construction of the West Burma Public Access
easements (as contemplated by Section 6.2.13 of the WGW Lease); and
(0) City approval of the final plans responding to the plan changes required by the
BCDC Conditional Approval.

City of Oakland
September 28, 2018
Page 3

Please confirm that that the City is willing to work in good faith to resolve/provide such matters and OBOT will proceed with the drafting of the necessary documents for the City review. Failure to provide such confirmation will be deemed a further indication that the City is seeking to frustrate the development of a bulk terminal at the WGW Lease premises. Please do not hesitate to contact me regarding this matter.

Sincerely
Marc a Stice, Esq.

And now this Insight Terminal Solutions OBOT Report follow-up, below, which is a look back to the dates before the September of 2018 Marc a Stice email, above.

The point is, the City of Oakland let the BCDC matter drag on through the year, and up to the point of issuing a decision to terminate the lease with CCIG / Insight Terminal Solutions. That action is one that CCIG / Insight Terminal Solutions holds is illegal, and because of the City’s inaction during the lease period, as demonstrated by the BCDC issue, here.

The BCDC permits matter is only one example, but one that was presented to the court for public view.

From the letter below from Phil Tagami to Elizabeth “Betsy” Lake who was “Deputy City Administrator for Real Estate and Major Projects” assigned to the OBOT Project in 1998.

This email exchange concerned the City’s not getting the BCDC permit issued, and the City (in the form of Ms. Lake) response as to why that was the case, and then Mr. Tagami’s response, prior to the Stice email, above:

From: Phil Tagami To: Betsy Lake
RE: W Burma Road safety and security Friday, August 17, 2018 2:20:49 PM
Thank you for your prompt reply.

We have the BCDC permit for the fence in process, but need the City permit as soon as possible. We are mindful of the rules, but need this on a clear path forward to promptly ensure site safety as soon as possible. As an aside, it was Bijal during one of our Monday meetings that stated the City was no longer issuing encroachment permits and to not bother seeking one; has this changed?

As you know BCDC is having a challenging time finding a nexus between the $500K fence work application and a $2m+ parking lot scope, adopted as a mitigation for the City infrastructure project (as approved and signed off by the City), and which BCDC is still actively seeking. As of today, Brad, on behalf of BCDC, is warning of an impending enforcement hearing and penalties associated with the delay of delivery of the subject parking lot.

We are pondering, but have not committed to, submitting a permit to construct the parking lot mitigation “under protest” to avoid a costly process with BCDC, but will certainly be seeking a true up with the City. We have long held that BCDC views the terminal as a new and different project with separate mitigations. Consequently, OBOT may begin to submit the marine terminal project elements to BCDC to further clarify the separate and distinct group of mitigations for the four or five sub projects under the terminal delivery that BCDC is expecting.

We will be concurrently looking to submit a separate permit for the roughly $200k of rail improvements in the BCDC jurisdiction, hopeful that the City will at long last cooperate with the fundamental nature of “rail” as critical to our lease, OGRE sub lease, proposed operations, and TCIF compliance. Resolving the years old RAA, and SNDA, among other issues is long overdue.

From: Lake, Betsy Sent: Friday, August 17, 2018 10:59 AM To: Phil Tagami Subject: RE: W Burma Road safety and security

Thank you, Phil. My understanding is that Burma road is not complete, that there was temporary access provided to allow Caltrans access to its facilities; however, it should not be open to the public at this time. I believe the project team has conveyed this message to the contractor.

With respect to any safety condition along Burma road, OBOT has known for a long time that the fence is a private improvement. As such, OBOT is responsible for obtaining the necessary approvals. Please note that the City never prohibited encroachment on City property, and merely advised that an encroachment permit would be needed if the fence were to overhang onto City property. The City as Landlord has reviewed and approved the fence design, coordinated quickly on the BCDC permit application OBOT submitted, and will process your city permits concurrently, so please go ahead and submit the city application if you haven’t already. However, please note that pursuant to the Ground Lease you are required to follow the law and obtain all required regulatory permits, including the BCDC permit.

Thanks, Betsy

Elizabeth A. Lake Deputy City Administrator for Real Estate and Major Projects | City of Oakland | City Administrator’s
Office | One Frank H. Ogawa Plaza, 11th Floor | Oakland, CA 94612
From: Phil Tagami Sent: Thursday, August 16, 2018 2:01 PM T Subject: W Burma Road safety and security

Pat, John, and Betsy,

Over the past several months we have raised concerns regarding the status of the grade differential of west Burma Road and the OBOT lease area and the OGRE Sublease area.

The GMP included a fence that was designed and approved by the City and BCDC. The fence was deducted from the scope of the GMP due to funding limitations with MPBR.

The fence is a necessary public safety and security improvement that OBOT, OGRE, and Oakland Global agreed to undertake on after the scope was deducted from the project to the tune of $500,000+ of additional expense to OBOT et al.

The City attorney’s office has forbidden the fence to be located on city property as originally designed and has objected to the approved fence hook point to encroach on city air space.

At significant cost the fence drawings have been re-engineered/surveyed and resubmitted as a private improvement.

WE know the building department is under immense pressure due to the current building boom.

We were promised that W Burma Road would not be opened until the fence was constructed along the property line.

The road is now open! This is a genuine problem. Safety and security issue….

Your cooperation with getting the permit issues is appreciated this matter is urgent and public safety and security are legitimate concerns.

We would like to proceed immediately with construction of the fence and ask that you keep the road closed to the public until the fence is complete.

Please advise ASAP

Tagami

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