City secures settlement requiring PG&E to pay up to $190 million to clean up and reconstruct the Marina Harbor

Agreement will resolve decades-long dispute over environmental cleanup

City Attorney Dennis Herrera
City Attorney Dennis Herrera

SAN FRANCISCO (Jan. 15, 2021) — City Attorney Dennis Herrera announced today that Pacific Gas and Electric Co. has agreed to fund the cleanup and reconstruction of the Marina Small Craft Harbor.

The settlement agreement resolves a nearly two-decade legal battle between the City of San Francisco and PG&E over pollution from the power company’s former coal gasification plants near the harbor. San Francisco sued PG&E in 2001 over chemical compounds discovered in the subsurface soils and sediments at the East Harbor, seeking to have the safety-challenged utility pay to clean up the pollution.

“I’m pleased that PG&E is finally doing the right thing in this instance and paying to clean up its pollution,” Herrera said. “It’s unfortunate we had to take them to court and then negotiate for years to get this outcome. But at the end of the day, this settlement is going to benefit not only the residents of this area, but all San Franciscans by increasing opportunities for waterfront recreation.”

The cleanup of the site will allow the San Francisco Recreation and Park Department to design and implement a project to improve the Marina Small Craft Harbor, including replacing failing docks in the East Harbor and increasing recreational access to the waterfront for all. The design of the bay-front park and its amenities will be shaped through feedback from community meetings.

“The cleanup of the East Harbor site will restore habitat, improve public access to the Bay, expand recreational opportunities and improve the long-term viability of our marina,” said San Francisco Recreation and Park Department General Manager Phil Ginsburg. “I appreciate PG&E’s commitment to this settlement, which will give San Francisco a clean, healthy waterfront for us all to enjoy.”

The settlement will make PG&E address the East Harbor pollution and will provide a framework for funding a project to increase public access to the shoreline at the East Harbor and at the West Harbor. The resulting work will still require environmental review and regulatory approvals. PG&E will be responsible for all project costs up to $190 million. The Recreation and Park Department will oversee the work with PG&E and will repay PG&E a limited portion of the cost, at zero interest over 30 years using future revenue from boat slips. The repayment will not begin until three years after all work has been completed and the Recreation and Park Department regains occupancy of the site.

The exact amount payable from future marina revenues will depend on the project cost. If the project comes in at or below $160 million, the Recreation and Park Department will need to repay PG&E only 9% of the total (up to $14.4 million). Any costs in excess of $160 million will be split evenly between the two parties. Ultimately, PG&E will be responsible for up to $160.6 million in costs, whereas the Recreation and Park Department’s share will not exceed $29.4 million.

The settlement agreement is subject to review by the San Francisco Recreation and Park Commission and final approval by the San Francisco Board of Supervisors.

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