$175M Tax Break for Marathon Refinery Buys Detroiters Only 15 Jobs
Marathon Petroleum, which received a $175-million tax break from the City of Detroit in a mammoth expansion project, is coming under fire from City Council for failing to hire enough Detroiters.
When Marathon asked the city for the tax break as part of the company’s plan to expand its operations in southeast Detroit in 2007, with the appeal came a pledge to recruit Detroiters for new jobs at the refinery.
The City Council granted the company the personal property tax abatement, forgoing millions in tax revenue. Even with the tax break, a city analysis estimated the expansion would generate $181 million in income taxes, real property taxes and other fees for the city over two decades.
“As we discuss job creation, please understand that we will do what we can to hire qualified Detroit residents,” then-Marathon Senior Vice President Garry Peiffer wrote to City Council in 2007. “It is our intention to work closely with the Detroit Workforce Development Department and a local institution of higher education to develop curriculum and offer training for interested Detroit residents.”
But the vision to hire more Detroiters never materialized. Now city officials will more closely monitor Marathon’s hiring practices to ensure the company is making an effort to hire Detroit residents.
“In a city with double-digit unemployment, any company that’s receiving a tax abatement of nearly $180 million should be giving more back, including hiring residents,” Councilwoman Saunteel Jenkins said in an interview.
Marathon employs 514 full-time workers at its refinery, thanks to the $2.2-billion expansion. That’s up from about 320 employees in 2007, when the city approved the personal property tax abatement, the largest of its kind in Detroit history.
Of the 514 employees, 30 are listed as Detroit residents as of January. In 2007, before the expansion, the company employed 15 Detroit residents. That means fewer than 6% of Marathon’s workers at the refinery live in the city, according to the company’s employment records, which must be submitted to the city annually under terms of its abatement agreement.