SAN FRANCISCO (Map, News) - The City will receive an initial payment of $2 million this week after city officials reached an agreement with the owners of the Cosco Busan cargo ship, paving the way for other Bay Area cities to recoup costs from the devastating November fuel spill.

The payment is in response to a lawsuit filed in San Francisco Superior Court by City Attorney Dennis Herrera, which alleges the cargo ship’s owners and ship pilot John Cota violated California law by sailing the boat under dangerous conditions. It also maintains they failed to respond quickly enough to prevent a spill when the ship struck the Bay Bridge on Nov. 7.

The agreement was reached with Hudson Marine Management Services of Pennsauken, N.J., acting on behalf of the ship’s Hong Kong-based owner, Regal Stone Ltd.

The spill of more than 54,000 gallons of bunker fuel affected communities along the Bay and ocean, delaying the crab-fishing season and killing more than 2,000 birds. The cities of Richmond and Oakland joined San Francisco’s lawsuit in February and may receive similar payments in the future once costs have been established.

The true cost of the spill, however, may not be known for years, and the initial payment does not preclude The City from recovering further funds for damages, Herrera told The Examiner on Sunday. The payment only “represents the hard dollars that we’ve been able to document so far, from paying fishermen who helped with cleanup issues to whole host of other things,” he said.

The initial payment will help offset the $250,000 The City paid to fishermen who helped clean the fuel-tainted waters — fishermen such as Ernie Koepf, who damaged his boat navigating the shallows along Angel Island. Though repairs to the boat weren’t covered by The City, he said, Koepf was paid for his time.

“We were well-compensated,” Koepf said. “[City officials] came through with everything they said.”

The money will also pay for other documented costs such as volunteer training and property damage. The City may recover additional dollars for the loss of recreational opportunities caused by the spill, which resulted in the closure of numerous area beaches, parks and facilities.

Jim Lawrence, a spokesman for Regal Stone Ltd, said The City and Regal Stone are working cooperatively to settle all of San Francisco’s claims and complaints from other cities, counties and municipalities affected by the spill.

The early payment suggests the companies connected to the cargo ship — which also include Fleet Management Ltd, Hanjin Shipping Co., Ltd, Synergy Management Services and Synergy Marine Limited — are looking to settle damages quickly.

“We’re encouraged by the response that we’ve gotten to date,” Herrera said. “I don’t think there’s any doubt about the liability here.”

bbegin@examiner.com

Comments from Examiner Readers

2:11 PM MST on Wed., Mar. 12, 2008 re: "Mayor�s messaging after oil spill �private�"

Examiner Reader said:
If its the public's business coming through a private device, why is it any less the public's business? The mayor is saving our tax dollars by not billing us for his cell phone and service? Right.

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12:44 PM MST on Wed., Nov. 14, 2007 re: "Cosco Busan may be moved soon"

Examiner Reader said:
It's a container vessel not a tanker. You wrote in the same article, "... allowing the tanker ship to relocate from the middle of the San Francisco Bay to a local shipyard ..." "The 900-foot container vessel has been anchored in the greasy waters of the San Francisco Bay since Wednesday,..."

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12:42 PM MST on Tue., Nov. 13, 2007 re: "Cosco Busan may be moved soon"

Examiner Reader said:
What use was pilot John Cota? Wasn't it his job to prevent such mishaps? I would hope he has been suspended until further investigations conclude.

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