Richmond to prepare for change in refinery's status
By Katherine Tam
Contra Costa Times
Posted: 02/24/2010 05:41:29 AM PST
Updated: 02/24/2010 05:40:40 PM PST
The prospect of Chevron leaving or downsizing operations at its Richmond refinery has spurred city leaders to plan for a future without its biggest employer and taxpayer.
It would be irresponsible not to, City Councilman Tom Butt said.
"I don't think it's the end of the world, but I think we have to take it seriously," Butt said. "If we just say, 'Look, whatever happens, happens, nothing we can do about it, we'll just hide and watch and let the decisions be all theirs,' that's not being a responsible public servant."
Locals don't know whether Chevron will pack up and leave, but the City Council on Tuesday directed the city manager to study the ramifications of a refinery closure or reduction. Specifically, they want to be able to soften painful impacts, and require Chevron to clean up any soil contamination and retrain its workers.
The study also will examine what opportunities could emerge, as well as what the city can do to persuade Chevron to stay.
Tax revenue from the century-old refinery supplies 28 percent of the city's general fund budget. Property, utility and sales taxes from Chevron total $30 million to $35 million a year, City Manager Bill Lindsay said. The refinery employs about 1,200 people, he added.
Chevron announced plans last month to cut jobs in refinery, retail and marketing operations because the recession has been hurting profits. Talk of refinery closures is premature, representatives say, and more details will emerge next month.
Some worry the Richmond plant could be in jeopardy, while others think a closure is unlikely.
The council voted 4-1 on Tuesday to start working on a contingency plan, with Councilman Nat Bates dissenting.
"You're trying to run them out of town," Bates said.
In other communities where refineries have closed, some properties remain dormant, said Kieron Slaughter, a city planner. Others have been transformed into housing, shopping centers or business parks.
In neighboring Hercules, the Pacific Refining Co. opened a plant in 1966. The recession in 1993 combined with reduced operations at the plant forced city officials to cut its budget by 10 percent and eliminate several programs.
Pacific Refining stopped producing fuels there around 1995. The site remained active as an asphalt and oil terminal until 1997, when Catellus Development Corp. and LandBank bought the property with plans for waterfront housing.
While the city lost $230,000 a year in property tax revenue, some saw opportunity.
"It's the most exciting time in Hercules in recent times," then-Mayor Terry Segerberg said in 1997. "It's like a bidding war out here. They all value the waterfront. They all see it as a destination kind of place."
The upscale 880-home Victoria by the Bay subdivision and several parks now occupy the site.
The case likely would be different if Chevron leaves Richmond. At 2,900 acres, the Chevron refinery is about 10 times the size of the Hercules site.
Chevron has been operating there for 108 years, and cleanup operations could be more extensive.
Council members Jim Rogers and Maria Viramontes abstained from Tuesday's vote, though for different reasons.
Rogers thought part of what the council was voting on wasn't in the public notice for the meeting; the city attorney disagreed.
Viramontes said officials should explore how to keep the city's largest employer rather than focus solely on what to do if it leaves. Her suggestion was incorporated into the council's direction to the city manager later that night.
Viramontes also objected to the issue being placed on an agenda on the same day as the state Court of Appeal's hearing on the refinery's contentious proposal to replace old equipment.
Katherine Tam covers Richmond. Follow her at Twitter.com/katherinetam.