The Solano County city of Benicia is projected to lose $10.7 million in annual revenue when the Valero refinery in its backyard closes.
That’s according to an economic impact report commissioned by the city, confirming previous estimates. Along with the 400 refinery jobs that will be lost, hundreds of other jobs will be affected, the report also said.
The study outlined what it describes as an “urgent need” for the city to plan how it can stabilize its finances and transition its workforce.
“The City will need to consider a range of responses — from attracting new industrial users to supporting affected workers and businesses — while continuing to preserve core services and long-term community resilience,” the report said.
City Manager Mario Giuliani said Benicia now faces its “most significant challenge” since the U.S. Army closed the Benicia Arsenal in 1964. City officials orchestrated the transformation of the site into an industrial park.
“We need to be clear-sighted in the challenges before us,” Giuliani said, noting that the city has already dealt with significant budget issues, laid off staff, restructured departments and passed tax measures. “We have been at the epicenter of what it looks like when you kick the can down the road.”
Valero is Benicia’s largest utility and water user and the city’s tax base relies heavily on industrial businesses that are directly or indirectly connected to refinery operations.
In early 2025, Valero notified the California Energy Commission of its plans to cease operations at its Benicia refinery by the end of April next year.
City staff are evaluating the land use of that 900-acre site to identify the best types of industry that might work there, but Giuliani acknowledged that the city does not own the site and “at the end of the day, this is going to be market-driven.”
The city’s ongoing planning work to modernize its port now takes on an even greater importance.
He said he expects that Signature Development Group, the firm Valero consulted to assess the future of the site, will have a proposal ready around the time that Valero shuts down the refinery next year.
City staff have also been using a priority-based budgeting tool that will inform the City Council and community on Benicia’s most essential programs and those “that may need to be retired,” Giuliani said, adding that the city could lose about 13% of its $60 million general fund.
Valero will relocate many of its employees, and other Bay Area refineries will likely poach the others. But the hundreds of people who work in jobs that support Valero might need resources and training from the Solano Workforce Development Board, Giuliani continued.
Last May, city leaders took initial steps to prepare for the loss of what has been its cornerstone business.
Steve Young, the city’s mayor, proposed — and the City Council approved — a group of community-focused task forces to study the economic impacts and chart a new path for the small North Bay city that has relied on tax revenue from Valero for decades.
The City Council plans to discuss the study at its public meeting on Tuesday.
“It’ll be a challenge, and then we can build that bridge to get us to a point into the 2030s when we start seeing redevelopment,” Giuliani said. “Benicia has believed in itself, and what is required of us is to believe in ourselves a little bit more and a little longer.”
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