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Richmond Wants To Share in Chevron Profits

Richmond seeks pact with Chevron

By Katherine Tam
West County Times

Article Launched: 05/02/2008 06:13:20 PM PDT


Related Item: Chevron taps into a gusher of profits that totaled $5.17 billion

Richmond city leaders are trying to extract a promise from Chevron to funnel millions of dollars into job training, public safety and other local services, an agreement unlike any other the city has secured.

Officials want to negotiate a community benefits agreement that would be tied to Chevron's estimated $800 million proposal to upgrade its hydrogen plant, power plant and reformer at the Richmond refinery. Some want the oil company to provide benefits equal to 5 percent of the project cost about $40 million; some think that figure could be higher.

Chevron might not be legally required to finance a housing complex or park as part of its project, but officials hope to persuade the company to do something along those lines anyway out of a sense of social responsibility. Investing in the community should be part of doing business in Richmond, Councilwoman Maria Viramontes said.

"They're going to be making a profit, and I'm looking for them to provide benefits," said Councilman John Marquez, who said he wants funding for job training, public health and public safety.

A refinery representative said Friday that Chevron is open to negotiating.

"There are things outside the scope of the project and the issuing of a conditional-use permit that the city is interested in," said Dean O'Hair, refinery spokesman. "We would want to have those discussions."

Chevron's upgrade proposal has stirred debate on a number of fronts, particularly whether the changes would allow refining of heavier crude, increase pollution and endanger people's health. Chevron insists it won't process heavier oil or increase overall emissions.

Opponents want a guarantee and are seeking tighter restrictions, including a limit on the kind of crude.

The Planning Commission resumes its decisionmaking hearing June 5. Officials expect the issue to be appealed to the City Council, no matter what the outcome.

Negotiations for a community benefits agreements will boil down to the number of benefits Chevron would provide and for how long. Council members want Chevron to invest in job training, police and fire, open space and funding for the nonprofit Brookside Community Health Center. Councilman Tom Butt, who prefers such provisions be conditions of approval rather than a separate side agreement, has compiled a list that also includes funding for a fire station, nonprofit groups, streets repairs, land for the Bay Trail and a "green" affordable housing pilot project that would offer jobs and a renewable energy source on site.

These would be on top of environmental mitigations Chevron would make to comply with state environmental laws.

Chevron's O'Hair said Friday that it is too early to discuss the specifics of what the refinery would agree to, but he said creating job opportunities for Richmond residents is an example of where the company and city see eye to eye.

Other communities around the country have forged community benefits agreements, typically on commercial projects.

If Richmond and Chevron hammer out a deal as comprehensive as the city envisions, it would be the first such agreement on an industrial use in the country, Viramontes said.

One of the first and broadest community benefits agreements was born in 2001 in Southern California.

The Figueroa Corridor Coalition for Economic Justice, made up of 25 to 30 neighborhood and environmental groups, unions and churches, banded together to seek local benefits from the Los Angeles Arena Land Co. as part of a 400-million-square-foot expansion of Staples Center, home to the Lakers basketball team. The legally binding deal calls for hiring locally; paying a living wage; and providing or funding a job-training and referral program, affordable housing, parks and other services.

The coalition leveraged its collective power as a group representing different sectors of the community, said Gilda Haas, who helped lead negotiations.

"The developer needed the City Council to approve an entitlement that was going to involve a bunch of hearings. We might not have had the power to stop it, but we had the power to slow it down. Time is money," she said. "Having a broad coalition, we could show either broad opposition or broad support. We had something of value."

Other organizations also have had success. The Los Angeles Alliance for a New Economy landed a deal in 2005 with the city of Los Angeles, which promised environmental mitigations, public health programs, job training and more as part of an expansion of Los Angeles International Airport. Neighborhoods affected by air emissions and noise are in line to benefit the most.

Those that enter into a community benefits agreement must be prepared to follow up later to make sure the provisions are met and any necessary amendments to contracts are made, Haas added.

There's no reason Richmond couldn't have a community benefits agreement of its own, city officials say.

"Philosophically, any new or expanded land use that comes into a city should provide benefits. This project is no exception," City Manager Bill Lindsay said. "They would have to have the same philosophy as I do, beyond simply taking up space or making a profit. Development in any community is a privilege."

Reach Katherine Tam at 510-262-2787 or ktam@bayareanewsgroup.com.

Chevron Corp. earnings far exceed Wall Street expectations. C1