A Great Day for Benicia

By Dirk Fulton, April 23, 2025

Valero Refining’s recent announcement to idle its petro-chemical plant next year is very encouraging news for our town and quite the opposite of the financial doomsday depicted by some fear-mongers.

As a lifetime 71 year resident, former elected public official, and local business owner, I have watched the refinery negatively impact us for over 55 years with extremely high levels of toxic air and water pollution, visual blight, and use of 50% of our city’s water resources at nominal rate.

These factors have exposed us all to severe health risks, caused a negative image of our city resulting in lower home values, and contributed directly to higher domestic water rates. This has been made even more alarmingly clear by the record-breaking $82 million fine recently imposed upon Valero for its air pollution violations in Benicia that also captured negative media-attention for our town.

The costs of having a 1960s-era oil refinery dominate our town should no longer be tolerated. We can embrace this rare chance to uplift an image of Benicia as an inviting historic waterfront community with a small town atmosphere, artist community, great schools and a welcoming downtown, rather than a pollution-filled refinery town whose far-fetched executives try to influence our local elections.

Our Benicia economy is stable and much more diverse than it was 60 years ago when the Arsenal closed. We are a commuter, residential community and no longer a company town dependent on one military installation, one company, or one refinery complex. We cannot repeat the doomsday thinking of the mid-1960s following the Arsenal closure, which led to the siting of the Humble Oil refinery (now Valero) and the nearby toxic waste dump to support it.

Short-term financial impacts related to a Valero closure have been exaggerated and can be mitigated. Since Valero does not produce sales tax for the city, the short-term revenue loss will result primarily from a Proposition 8 “temporary real property tax reduction”. This reduction will be less than 20% of factored base value since Valero has already received generous tax reductions through years-long litigation with the City and County Assessor, and because its land and improvements (office buildings, tank farms, pipelines, utility infrastructure, etc.) retain their inherent market value. Once alternative land uses occur, full property values will be restored. Just some examples of clean alternative uses are: housing, mixed use commercial, commercial retail, and clean energy. Additionally, the city will enjoy enhanced tax revenue from increased residential real property values as homes change hands. Benefitting both directly the city and its homeowners, local real estate professionals estimate a rapid 15-20% appreciation in values once the refinery- town stigma is eliminated.

Idling the refinery also provides many new financial opportunities beyond increased property tax revenues: The 50% recapture of our water resource supply can be marketed to growth-oriented municipalities at substantial annual profit; Tourism and related TOT (hotel tax) and sales tax revenue should increase as the town becomes a more attractive tourist destination; Development fee revenues will increase as new and alternative land uses occur in the industrial park; and importantly, there is the opportunity for a long-overdue port tax (common in many west-coast port cities) as our port facility will now gain additional capacity.

Lastly, regarding concerns over diminished contributions from Valero Refining to community non- profits, I believe that Benicia residents and businesses have been and will continue to support our local non-profit agencies, and this effort will be augmented by the recent creation of the Benicia Community Foundation and its already generous grant funding of local needs.

In summary, Valero’s announcement to idle refining operations bodes well for our town and creates a bright future, provided the mistakes of the 1960s following the Arsenal closure are not repeated by city leaders.