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Chevron, city, strike deal

on May 12, 2010

In a move that could impact the city’s highly-anticipated campaign season, Chevron Corp. and city leaders on Tuesday brokered a tax deal that markedly eases tensions between the energy giant and the city.

“This deal provides some certainty via negotiated settlement, rather than the ballot box,” said Marilyn Langlois, a community advocate in Mayor Gayle McLaughlin’s office. “This is a very positive step for the city.”

Chevron and the city have jousted for years over how much tax the refinery should pay. Those disagreements began boiling over this year.

First, Chevron officials began issuing cryptic public statements hinting that the refinery could close if the costs of doing business in Richmond reduced its competitiveness.

Last month, Chevron helped sponsor a signature-drive to secure a ballot measure that promised to slash in half utility taxes across the city, a move the city said would cut Chevron’s tax bill by at least $10 million.

The City Council responded with its own measure seeking to eliminate an alternative maximum payment option, a move that could have meant millions more in local taxes on the energy giant.

But the agreement reached Tuesday appears to avert what was destined to become a bitter, costly battle for voters in November. Part of the agreement includes both parties’ pledge to withdraw their dueling ballot measures.

“We hope that the cooperation displayed by both sides will also help guide possible future discussions on matters important to the City and the Refinery,” said Mike Coyle, general manager of Chevron’s Richmond refinery. “We are all interested in what is best for Richmond.”

But the high praise from both sides belies the tough negotiations needed to ground out an agreement, which will guarantee the city $114 million over the next 15 years on top of its current utility tax. Among Chevron’s victories is a stipulation that insulates the corporation from any new voter-approved taxes and the city’s agreement to drop its appeal of a court decision on 2008’s Measure T tax initiative.

“The city did ask for substantially more than $114 million,” Langlois said.

City negotiators were also unsuccessful in trying to get Chevron agree to cease attempts to have property assessment values reduced on their 2,900-acre refinery, Langlois said.

“As in all settlement agreements, the city did not win everything it rightfully deserves,” Councilman Tom Butt wrote in a statement published in the Berkeley Daily Planet.

Precisely how the agreement plays out in November remains to be seen. McLaughlin, who leads a coalition on the City Council that has a reputation for sparring with Chevron, faces re-election, as do council allies Jim Rogers and Ludmyrna Lopez. National environmental figures including former Obama Administration official Anthony “Van” Jones have traveled to Richmond to express support for McLaughlin, who is the only Green Party mayor of a city of more than 100,000 in the country.

Many residents and observers wonder how heavily Chevron will weigh in on those races.

In a press release issued today that hails the agreement, McLaughlin showed no hints of softening her rhetoric.

“This agreement reflects the efforts of the incredible progressive community of Richmond who have taken on corporate power and wrested unprecedented concessions” from Chevron, McLaughlin said.

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