RICHMOND -- Chevron's mammoth refinery leaves a footprint in Richmond far beyond its 2,900 waterfront acres. But whether that footprint gives the city a leg up or leaves it a step behind is a topic of fierce debate among residents and local leaders, one that has heated up again as the global oil giant pursues a $1 billion modernization project.
Tens of millions in Chevron tax revenue bolster the city's budget, providing police and other services that similarly sized cities in Contra Costa County can only dream about. Millions more are filtered to dozens of nonprofits and businesses throughout the city -- and to the company's favored political candidates each election cycle. Billboards throughout the city feature workers and well-known community leaders extolling the benefits of the refinery and its planned modernization.
While some local leaders laud Chevron as a financial bulwark for a long-struggling city, others -- most notably Green Party Mayor Gayle McLaughlin -- portray the refinery as an albatross whose contributions are outweighed by chronic pollution and fires that imperil residents' health and depress property values. Far from being a paragon of generosity, they say, Chevron has fought paying its fair share over the years, as evidenced by recent court battles to reduce its property tax bills.
The mix of money, oil, politics and culture has spawned entrenched backers and critics who differ over how the city should pursue policies that affect the company. Tensions have never burned as hot as they have since an August 2012 fire at the refinery sent plumes of smoke across the bay and thousands to area hospitals.
In the wake of the fire that drew a federal investigation and shut down the refinery's operations for months, the city took the unprecedented step of suing its largest taxpayer. The refinery's direct tax payments to the city amount to about one-third of Richmond's $134 million general fund budget; the decline in its property tax valuation that resulted from the fire blew a $6 million hole in the city's budget last year.
"Chevron and Richmond are like bickering, fighting spouses," Councilman Jim Rogers said. "But Chevron needs to understand that one spouse is going to be really pissed off if the other burns the house down."
Chevron and the city are engaged in a high-stakes chess game over the refinery's modernization project, a partial retooling of the facility that the oil company says is vital both to the health and safety of the community and to its long-term corporate fitness. The project, which city leaders hold significant leverage over thanks to a 1987 ordinance that requires the refinery to submit projects to city building inspections, has rekindled the complex discussion of just how important the refinery is to the city's health. The City Council is set to weigh the project Tuesday.
A 22-page report released earlier this year by Beacon Economics, which was commissioned by Chevron, found that between 2009 and 2013, the refinery's standard operations supported 3,600 employees as well as 500 additional jobs in West Contra Costa.
In addition, $5 million-plus in annual social investments generated another $7 million in revenue and supported 75 jobs in Richmond. The investments, focused on education and workforce development programs, have coincided with an improving employment picture in the city in recent years.
That money helps the city of 106,000 people fund vital city services, including a larger-than-average police department and robust code enforcement and crime-intervention programs that have helped drive down crime rates.
"One of the reasons we've had success in reducing crime is we have a funding base that allows for good staffing levels," police Chief Chris Magnus said. "It's just a fact that Chevron is a big part of that funding base."
The Richmond Police Department has 190 sworn positions, according to Magnus. Slightly larger cities such as Antioch and Concord have far lower general fund budgets and police forces of 89 and 147 members, respectively.
But the numbers don't quell critics in the city, making Richmond a far cry from the accommodating company town it was for most of the last century. Less than 10 percent of Chevron's 2,100 local workers live in the city, reducing the positive impact its payroll dollars could have on the local economy. At nearly $4 billion, the refinery represents one-third of the property value in the whole city.
"It should surprise no one that they have a major impact on the economy as well as public sector revenues wherever they do business, including Richmond," Councilman Tom Butt wrote in an email. "On the other hand, there are substantial costs to society from Chevron and the fossil fuels industry in general, and to Richmond in particular. Perhaps (the costs are) harder to explicitly quantify than taxes and jobs, but the overall impact could be huge."
The costs and benefits of Chevron's operations in Richmond, as well as the modernization project, depend in part on who you are and where you are, said Scott Anderson, senior vice president and chief economist for Bank of the West in San Francisco.
"If you live next door to the refinery, you might come up with a different answer than those who live farther away," Anderson said. "But the net benefits of the refinery and of its proposed modernization certainly do outweigh the costs for the Bay Area economy as a whole. From an economic standpoint, the project is a winner."
Anderson cited recent figures for the Bay Area -- excluding the South Bay -- showing $360 billion in economic activity annually, and noted that the proposed modernization was estimated at $1 billion in total spending, with 1,000 construction jobs.
"That's 0.3 percent of the Bay Area's GDP," Anderson said. "That's significant, so you can expect a nice multiplier effect from those dollars."
Chevron's philanthropy already has a multiplier effect each year in the community. Barrie Hathaway, executive director of the Stride Center, a workforce development nonprofit with locations in Richmond and San Pablo, said Chevron's support has helped his group provide technology training to hundreds of local residents in recent years and sustains more than a dozen jobs and paid internships at any given time.
Hathaway said Chevron has given his program $334,000 since 2011, a nearly fivefold jump from the prior three-year period. Similarly big numbers are sprinkled about to dozens of area nonprofits, including the Latina Center, which Chevron has given $287,000 since 2009.
But many remain skeptical of Chevron's true value to the community, and are especially put off by the refinery's all-out media blitz ahead of crucial city votes about whether to approve the modernization project, which critics say doesn't do enough to reduce pollution. Chevron has used its deep pockets -- although it won't divulge how much -- to fund community news websites and slick marketing campaigns that tout the refinery's benefits to the city, push the modernization project and pillory critics.
Hathaway said there are no strings attached to Chevron's investments in his nonprofit but did acknowledge that Chevron public affairs staff invites him and his workers to attend community events and support the modernization effort, which he has.
Although no comprehensive study has ever been done on the refinery's effects on the health of Richmond residents, surveys have found high rates of asthma and other respiratory illnesses in some nearby neighborhoods. Anderson, the economist, said the refinery drags down real estate values in the city but probably not as much as high crime and the poor performance of the school system.
"An oil refinery is good for your city's tax revenues," Anderson said. "But there are costs that come with it, and the costs aren't distributed equally."
Here is a look at the local economic benefits from Chevron's Richmond refinery and the company's charitable giving, according to a study commissioned by the company and city data.
Sources: Beacon Economics and city of Richmond