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Richmond city officials abused their discretion three years ago in approving a plan by ChevronTexaco to create two 30,000-barrel liquefied petroleum gas (LPG) tanks, a state appellate court ruled Friday. 

The 500-pound gorilla on the Richmond political scene, the oil giant is also one of two bidders for Point Molate, an abandoned U.S. Navy fueling base, offering enough up-front cash to wipe out the city’s sizable debt. 

A rival plan by Berkeley developer James Levine and gambling industry giant Harrah’s calls for even bigger potential payouts to the city, provided the developers and the Guidiville Rancheria Band of Pomos can win federal and state approvals for a massive gaming, hotel, entertainment and shopping resort at the site. 

The City Council could reach a decision on the two offers as early as next Tuesday. 

Oil refinery officials say they want Point Molate to serve as a security buffer for their refinery, and contend that the high traffic that would be generated by Levine’s plan is incompatible with protecting the site against possible terrorist attacks. 

ChevronTexaco has also generated a flurry of controversy by flooding the city with expensive endorsement mailers in the closing days of the city elections. 

Incumbent Tom Butt, the only City Councilmember who called for an environmental impact report when the refinery filed papers with the city to build the LPG tanks in 2001, is not one of the ChevronTexaco’s election day picks. 

“Chevron’s involvement is drawing more interest than usual this year because of Point Molate. When they come back to the council with their latest offer later this month, it’s likely that some of their endorsees will be sitting on the council,” Butt said. 

Newly elected City Councilmembers won’t take office until the council’s first January meeting. 

Butt estimated the cost of the Chevron mailers at more than $100,000. “It’s the local equivalent of soft money,” he said. 

All sides agree that as the largest employer and property owner in the city, ChevronTexaco wields considerable influence in the city.  

Everett Jenkins, interim Richmond city attorney, was unavailable for comment either on the Point Molate offer or on the court ruling. “It being election time, he decided to take off until Wednesday,” said a spokesperson for his office. “’Til then, the media talks to nobody.” 

Calls to Mayor Irma Anderson and acting City Manager Rich McCoy were not returned. 

ChevronTexaco External Affairs Manager Dean O’Hair said the ruling should have little impact on the refinery’s plans. 

The case against the city and Chevron was filed by Communities for a Better Environment (CBE), an Oakland-based environmental group on July 3, 2002. The suit followed unsuccessful appeals of its challenges of city planning commission and council votes approving the refinery’s request for a conditional use permit to add the two tanks to the complex of 14 at the Chevron “sphere farm.” 

A Contra Costa County Superior Court judge ruled for Chevron and the city, and CBE appealed. 

CBE charged that the approval was part of an illegal attempt by Chevron to “piecemeal” a portion of the refinery out of the production of banned fuel additive MTBE and into an LPG tank farm. 

“Piecemealing,” the implementation of a strategic planning effort through incremental stages submitted without revealing the larger plan, is banned under the California Environmental Quality Act, and CBE was demanding a full-scale environmental impact report addressing what it claimed was a broader plan. 

CBE wanted the EIR to address the possible hazards and impacts that might be produced by leaks or an explosion of the highly combustible compressed gas, and to address the issue of how the spheres might fit into a larger reformulated gasoline project at the refinery. 

Chevron contended that the spheres were needed to make the refinery more efficient at handling LPG and to allow them to take existing spheres out of service for inspection. 

While the appellate court denied the piecemealing claim, the three justices ruled that the city’s failure to address the cumulative impacts of several refinery project, including the spheres, constituted an abuse of discretion. 

Citing existing precedents, the justices held that the initial study wrongly denied that the tanks would add to the impacts of earlier changes at the plant. 

Presiding Justice William R. McGuiness wrote, “CBE submitted evidence showing Chevron had applied for permits for over a dozen projects at the refinery during the twelve months before the city issued its notice of negative declaration on November 30, 2001... under the CEQA Guidelines, the city had an obligation to consider not only current projects ‘in the immediate vicinity’ of the proposed project, but rather the effects of all past, current and reasonably foreseeable future projects that could produce a combined environmental impact.” 

The appellate court last week ordered the trial court to direct the city to set aside the resolutions adopting the negative impact declaration. The decision also forces the city to conduct a study to determine if an EIR should be required “after examining the cumulative impacts of the project in connection with past, present and probable future projects at the refinery.” 

Each side was ordered to pay their own costs. 

Adrienne Bloch, attorney for CBE, called the decision “a significant victory for environmental justice, and an excellent decision for the City of Richmond.” 

Bloch said CBE entered the legal fray following complaints by people living near and around the refinery. “As soon as we started to look into it, we realized it was part of something much larger. We engaged an expert and started out on what became a very long fight. 

“The decision is the first case in the district based on cumulative impacts, and now the city will have to start all over with a new Environmental Impact Statement and new scoping sessions offering the opportunities for more public participation,” she said. “It’s significant also in that it serves as notice to the City of Richmond that they’re not exempt from real environmental review of projects—that they have it do it just like everyone else.” 

But ChevronTexaco’s O’Hair downplayed the claim. “They did not tell the City of Richmond that they had to do an Environmental Impact Report,” he said. “They just have to check off the box saying they’ve examined the cumulative impacts of the project and found that a negative declaration is all that’s necessary.” 

Councilmember Butt, a longtime Chevron critic, hailed the decision. “Chevron has owned our City Council for years,” he said, “and the council does whatever the city staff says.” 

Meanwhile, Chevron presented the city with the latest draft of its offer for Point Molate on Friday, offering a $50 million payment as early as Dec. 23, another $5 million within 10 days of signing to fund new jobs in the city, plus a special tax assessment of $1 million per year for 25 years, 

The refinery is also offering a $1 million account to fund a comprehensive land use plan and a $2 million fund payable over five years to develop and maintain a shoreline park and trail system, which will include land already owned by the refinery. 

Chevron also agrees to take the land on an “as is” basis. 

The offer also includes long-term use of a valuable 25-acre tract commercial/industry tract near the Richmond marina. 

O’Hair described the $1 million a year offer as payments in lieu of property taxes, “though I expect there will also be some type of regular property taxes, too.”