Detroit Council Okays Tax Breaks for Marathon
by Zachary Gorchow Detroit Free Press
October 10, 2007
A $1.5-billion expansion of Marathon Petroleum's southwest Detroit refinery moved closer to reality Tuesday with the Detroit City Council's approval of a $186-million package of tax breaks for the company.
Marathon will receive a tax exemption worth $176 million over 20 years and a $10-million tax credit as part of its plan to increase the refinery's capacity from 100,000 barrels per day to 115,000 by late 2010.
With the council's 7-2 votes on both issues, Marathon's Board of Directors will now consider at its Oct. 31 meeting whether to expand the refinery. Marathon also needs state approval of the tax breaks and approval of a permit from the state Department of Environmental Quality.
"It certainly will be viewed in a favorable light," Marathon spokeswoman Chris Fox said of the council's votes Tuesday.
Marathon is weighing similar projects in Minnesota and Illinois, though the company acknowledges the Detroit expansion has progressed further.
The Detroit project would mean $174 million in additional tax revenue for the city over a 20-year period. It would create an estimated 800 construction jobs once it gets under way late this year or in early 2008 and 135 permanent jobs when the expansion is completed.
"It is huge for Detroit," Councilwoman Sheila Cockrel said.
The project would be built on a former steel mill site, allowing Marathon to process a more abundant and stable supply of crude oil from Canada.
But Marathon's plans have met with numerous concerns from southwest Detroit residents, weary of an already heavily industrialized area.
Marathon pledged to purchase special high-efficiency street sweepers that would vacuum up particles emitted by the refinery or by an increase in truck traffic to and from the refinery.
The oil company also plans to put special filters on its diesel trucks and to buy them for Detroit Public Schools buses as well, to offset the increase in pollution from the refinery. Marathon officials say that the expanded refinery could increase air emissions by 10%, down from previous estimates of 30%.
"Since the proposal first came forward, I think there have been a lot of positive changes," said Lisa Goldstein, director of Southwest Detroit Environmental Vision.
Councilwoman Monica Conyers, who joined Councilwoman JoAnn Watson in voting against the tax breaks, said council members who took residents' air quality concerns lightly were "acting the fool."
"They have to live there," she said of residents.
But Councilwoman Alberta Tinsley-Talabi said the council had thoroughly investigated the issue and would risk a needed economic boost if it delayed a vote.
"Given the current condition of this city ... I don't want to play with the opportunity that this presents," she said.
Copyright (c) 2007, Detroit Free Press. Distributed by McClatchy-Tribune Information Services.