VMT and Orcem Go Picking Cherries
The applicants trying to get a slag cement milling operation approved for the south Vallejo waterfront have been relying heavily on two documents to pitch their heavy industry project as a way to help revive the local economy. That idea resonates with some of the older generation who remember the glory days when Vallejo was a Navy town and the local economy depended on a steady influx of Federal dollars. But when we examine those two studies the applicants are fond of quoting, the justification for approving this project is hard to find.
A Fiscal and Economic Impact Study for the proposed project was produced by a team of consultants hired by the applicants themselves. Even with the all of the speculative inflation of economic benefits we would expect to see in such a document, a casual reading shows that this is basically a great deal for the county. Most of the economic benefit would go to Solano County while south Vallejo gets stuck with the unavoidable significant environmental impacts.
Quotes like these highlight the lopsided nature of the proposed arrangement: “The City of Vallejo is expected to receive approximately 29% of the taxes and fees paid in the 2015-2021 period....Under current tax regulation, the City of Vallejo will receive 5.3% of these funds [property taxes] with the remainder being allocated to other agencies in Solano County, including the County itself....VMT has a rent offset provision for waterfront improvements that allows rent
paid to the City to be adjusted down to 15% with the total rent offset not to exceed $8MM over the period of lease (65 years).” That eight million dollar giveaway written into the lease is more than the full rent payments would amount to over the entire term.
What a sweet deal for the county and the applicants! Schools across the county would benefit while our local kids breathe the smog and soot that the environmental impact report identify as significant air quality impacts from operating a cement mill on that site. The residents of south Vallejo currently suffer elevated rates of pollution-related respiratory and other ailments from living in an industrial corridor. The applicant’s intention to purchase the right to pollute in the form of regional offset credits would hurt our local residents, who already bear an unfair share of the burden for the sake of regional economic prosperity. Small wonder that those county and regional politicians were eager to conspire with Councilmember Malgapo’s secret committee and the project applicants.
The applicant’s own Fiscal Study makes a curious reference to a second planning document in trying to justify the proposed project. Citing the Vallejo Economic Development Plan (2012), the consultants posit: “The manufacturing industry is one of the most important sources of revenues for the City of Vallejo, both because of sales tax revenues that come from the sale of goods produced in Vallejo and because manufacturers are heavy consumers of power utilities.” But the proposed project would produce no sales tax revenue at all, and really the only revenue of significance would be the utility taxes on power usage. As the Development Plan points out, Vallejo lags badly in generating the sales taxes that cities now rely on to fund services, ranking near the very bottom of all cities in the region.
Does the Economic Development Plan really argue for approving the proposed Orcem facility as the proponents would like us to believe? Not if you actually read it instead of accepting the cherry-picked snippets they offer. The Plan highlights four ‘clusters’ as the main contributors to the local economy. The general Manufacturing category comes in a distant third behind the Health Care and Tourism industries. Hard to imagine how a polluting heavy industry facility like a waterfront cement milling plant would contribute to either of our two strongest economic sectors. Maybe by generating more health problems for our thriving health care industry to treat? Would a scenic waterfront featuring giant open piles of slag draw in more tourists?
The applicants trot out one of the Development Plan’s ten stated goals, to “make Vallejo the Bay Area’s premier site for manufacturing," in an effort to convince us they fit into an established development strategy. But the text that follows tells us that the proposed Orcem project would be the wrong kind of manufacturing in the wrong place. The first two Plan objectives to further that manufacturing development goal read: “1. Support growth in international trade and export sales that creates jobs and potentially increases City sales tax revenues.” and “2. Improve ability of manufacturers to ship from Mare Island across all transportation modes.” There would be no sales tax with this project, and when discussing the rail infrastructure and locating heavy industry the Economic Development Plan is talking about Mare Island. There is no mention of reactivating the abandoned rail line to the south Vallejo waterfront that would interrupt traffic at intersections all across Vallejo. That rail route to the old General Mills site was laid out in 1869 and originally ran around the outside of town. Running trains on that route today would lower property values in neighborhoods across town, interrupt traffic and emergency vehicles, and in general detract from the City’s appeal as a tourist destination.
Old heavy industry without federal subsidy remains vulnerable to economic downturns, and much of their workforce has been replaced by technology and software. The projected employment numbers for this project would have a negligible impact on the local employment picture. When targeting growth in the manufacturing cluster, the Development Plan seeks to: “Attract new investment from businesses that are linked to regional manufacturing sectors promoted by Solano County EDC including food and beverage production, life science manufacturing, clean technology and other manufacturers creating high-wage jobs.” In spite of all the hype about 'green’ cement, the actual daily operation of the facility would be anything but clean and green for its neighbors, as laid out in the draft environmental impact report.
Orcem Slag Milling Facility - Port of Moerdijk, Netherlands
The potential for overall savings in greenhouse gases from recycling slag does nothing to make a former industrial site now surrounded by neighborhoods and schools an appropriate location, regardless of the remains of old infrastructure. This proposal did not result from a rational planning process, and would prevent the full implementation of the Propel Vallejo planning vision the City spent millions of tax dollars and countless hours of citizen input to develop. A few well-connected individuals managed to pick up the property dirt cheap at auction and get the old General Mills lease transferred to them, or we would not even be talking about an Orcem. Let’s start talking instead about how to develop and locate industries suited to Vallejo as it exists today, and stop looking backward to a subsidized industrial past that will never return.