Last April, when plans to ship coal through the old Oakland Army Base became public, Phil Tagami, the master developer of the base, came under fire from local officials and community groups. Tagami, however, downplayed the news, claiming that coal is only one of many goods that might be shipped through a new maritime bulk terminal that he's building on the base. He also said in statements to the press that a $53 million investment that four Utah counties hope to make in the marine terminal would allow these counties to ship potash, hay, salt, and other Utah goods, perhaps including coal, through the facility.
But emails, contracts, and reports reviewed by the Express show that the proposed investment in the bulk marine terminal by the Utah counties is, in fact, driven by a secretive Kentucky-based coal company, Bowie Resource Partners, that wants to massively expand its coal mining operations in Utah. And if accepted, the Utah counties' investment in Oakland's Army Base redevelopment project would make the proposed bulk terminal a major export hub for millions of tons of new coal from Bowie's mines in Utah. Records also show that a Utah public official who is leading the deal stands to profit personally.
Commissioners from four Utah counties — Sevier, Carbon, Emery, and Sanpete — are marshalling millions in public subsidies to build the infrastructure that will carry the coal from Bowie's mines to Oakland, where it will be loaded onto ships bound for Asia.
Jeffrey Holt, who has been the chairman of Utah's Transportation Commission since 2009 and is an investment banker with the Bank of Montreal, is advising the four counties on their Oakland port investment. In March, Holt led a field trip from Utah to Oakland to scope out the terminal site. In April, Holt helped the counties obtain the $53 million public loan from a Utah state agency to help build the coal export terminal at the Oakland Army Base.
Holt is also helping to assemble financing for another group of Utah counties that is building a railroad that will haul coal from a Bowie Resources mine in Utah — known as the Sufco mine — and would establish a rail link to the Union Pacific Railroad, thereby allowing for the shipment of coal to Oakland's waterfront.
Holt and the Bank of Montreal stand to earn millions if the railroad and coal terminal in Oakland are built. Bowie Resources would earn millions more shipping Utah coal through Oakland. The details of these plans to expand coal mining in Utah and to establish Oakland as a massive coal export hub have — until now — been kept under wraps by the parties involved, including the Oakland team building the export terminal led by Tagami.
But Bowie's coal export scheme, heavily dependent on public subsidies, is by no means assured. The Utah railroad and Oakland terminal investments, masterminded by Holt, are incredibly risky. Expanded coal mining in Utah faces opposition from environmentalists. And many in Utah question the use of public funds to subsidize coal companies. Finally, coal exports from Oakland face growing opposition, with the Oakland City Council scheduled to consider the matter on September 21. Three councilmembers — Dan Kalb, Lynette Gibson McElhaney, and Rebecca Kaplan — have already spoken out against the idea of coal moving through the Army Base terminal.
Bowie's plan to secure Oakland as its coal export hub emerged in February 2014 when the Port of Oakland, citing environmental concerns, rejected a bid by the company to build a coal export facility at the Howard Terminal. Stymied at the port, Bowie looked to the small slice of city-owned waterfront where Tagami's company CCIG is planning to build a bulk commodity terminal as part of the massive Army Base redevelopment it has been contracted to complete by the city. In April, the Utah Permanent Community Impact Fund Board (CIB), a special state agency that makes grants to rural Utah counties for sewers, fire stations, and other municipal improvements, quietly approved an unusual $53 million low-interest loan to Sevier, Carbon, Emery, and Sanpete counties. In a presentation to the CIB, Holt and several commissioners representing the four counties said the funds would contribute to a $200 million maritime terminal in Oakland that would export many different commodities. Appearing with Holt and the county officials was Mark McClure, vice president of CCIG.
When the CIB loan was first reported by a small Utah newspaper as securing access specifically for Bowie Resources' expanded coal exports through Oakland, Holt and others worried the revelation could kill the project. On April 8, the day after the Richfield Reaper newspaper reported the loan, Holt emailed commissioners of the four Utah counties. "We've had an unfortunate article appear on the terminal project," wrote Holt. "If anything needs to be said, the script was to downplay coal, and discuss bulk products and a bulk terminal."
Holt also wrote that Tagami was disappointed that the plan to export coal had been made public. "Phil Tagami had been pleased at the low profile that was bumping along to date on the terminal and it looked for a few days like it would just roll into production with no serious discussion," wrote Holt.
"Less press is best," Holt added. "Controlled message is critical."
Tagami did not respond to emails and phone calls seeking comment for this report.
Records also show that Bowie Resources' plan to mine coal from Sufco appears to depend on the Oakland deal going through and that the company might not otherwise find a market for the fossil fuel. As such, shipping coal through Oakland likely will lead to a massive expansion of coal mining in Utah that might not otherwise occur.