Discuss Detroit » Archives - July 2007 » Refinery gets Detroit OK for tax breaks « Previous Next »
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Lowell
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Username: Lowell

Post Number: 4241
Registered: 10-2003
Posted on Monday, October 15, 2007 - 1:19 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Marathon Petroleum Co. L.L.C. has won approval from the city of Detroit for a 20-year, $176 million tax exemption and a $10 million Michigan brownfield tax credit for a $1.5 billion expansion at its southwest Detroit refinery.
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The expansion would add some 135 full-time employees, about 60 Marathon workers and 75 contractors. [Crain's]
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Usually I am happy when the CofD gets new investment, although I am uncertain about the health [pollution] issues involved with this deal.

What continually irks me, however, is the corporate welfare that is always handed out with these. $187.5 million for 135 jobs is $1.39 million in concessions per job. Sooo... if I open up a party store with five full time workers, do I qualify for $6.4 million in exemptions and credits?

I know the issue is more complex than that but ... I am having difficulty seeing how the CofD benefits at those numbers, particularly considering almost the entire city is downwind of that not-so-environmentally-friendly operation.
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Fareastsider
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Username: Fareastsider

Post Number: 630
Registered: 08-2006
Posted on Monday, October 15, 2007 - 1:28 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I agree completely. I see all of these tax breaks for large companies for job growth but it appears that the wages of the new employees wont come close to the benefit in dollars to the corporation.
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Andylinn
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Username: Andylinn

Post Number: 595
Registered: 04-2006
Posted on Monday, October 15, 2007 - 1:36 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

i don't know much about this deal at all, but was the refinery threatening to move out? and if so, how many jobs do they provide in all? just curious. - andy
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Viziondetroit
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Username: Viziondetroit

Post Number: 1194
Registered: 11-2003
Posted on Monday, October 15, 2007 - 1:59 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Check this site out for more details... I heard them speak last month about some thing for the Michigan Citizen

http://www.detroithoup.com/
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Digitalvision
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Username: Digitalvision

Post Number: 416
Registered: 11-2003
Posted on Monday, October 15, 2007 - 2:32 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I have a theory.

There are lots of desirable things about Detroit, once you spend a day there. However, there are infrastructure issues (safety, lighting, mass transit, etc) that keep businesses and investment away like the plague.

I have to think that in the long run it's way cheaper to spend the money to fix these problems than dole out $1m plus for every new job created. Even if Detroit by itself did a limited section of mass transit that was regular, attractive bus service from midtown to downtown, that would help. Even better, do something to tie the airport to downtown (even if it is speed-link type service) to attract international companies (a huge knock on our region is no connectivity at all to the airport). Refurb city airport for corporate jets, for instance (meaning provide the amenities they need and expect, as they do in Oakland County).

So, instead of attracting "dirty" businesses - this would attract many "clean" ones - especially tech businesses - don't always shy away from taxes. For gosh sake, look at California or Boston, two big tech hubs - it's not exactly a low-tax area at all. However, it's all about the quality of life that Detroit's really starting to pull together in certain areas.

I am starting to believe that if Detroit wanted to be, it could be a "hub culture" city where it had more in common with Tokyo, London, Toronto, San Francisco, Paris and others than it's direct neighbors.
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Mcp001
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Username: Mcp001

Post Number: 3041
Registered: 11-2003
Posted on Monday, October 15, 2007 - 5:09 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I've never understood the mindset behind cutting taxes for one specific entity, while letting everyone elses taxes stay where they are at.

If you need to cut taxes to entice someone to stay and/or upgrade, then they are too high for everyone else.

I'm also skeptical about just how much that had a hand in their decision to expand. Refinery capacity in the US is maxed out as it is thanks to out environmental "friends". There is a still a very large market in Michigan that would've paid off whether or not they had received their tax breaks.
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Charlottepaul
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Username: Charlottepaul

Post Number: 1823
Registered: 10-2006
Posted on Monday, October 15, 2007 - 7:39 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"almost the entire city is downwind of that not-so-environmentally-friendl y operation."

The prevailing winds in Detroit are out of the Northwest. SW Detroit would be one of the best locations for the least amount of impact directly on the C of D. Detroit is an auto city and the city gets what the auto brings, good and bad, and for those that complain about 'expensive' gas prices, it helps to have a refinery in your backyard.
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Udmphikapbob
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Username: Udmphikapbob

Post Number: 484
Registered: 07-2004
Posted on Monday, October 15, 2007 - 8:27 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

DETROIT—More than 30 years after Michigan first allowed state and local governments to sharply cut property taxes for manufacturing companies that promise to retain or add local jobs, a new study by state university researchers has found that the strategy is usually ineffective. Instead of aiding economic growth, the study found, the cuts often harm the communities that grant them.



http://mlui.org/growthmanageme nt/fullarticle.asp?fileid=1719 9

This article from Keith Schnieder for the Michigan Land Use Institute cites evidence that more often than not, the communities do not get their return on investment for granting the tax abatements. However, this seems to sum up the problem:

quote:

"They’re essential," said Rick Chapla, vice president of The Right Place, a non-profit economic development organization in Grand Rapids. "As long as every other state in the union has tax abatements and incentives, the reality is that Michigan has to have these incentives to compete. We have to fight to be competitive and tax abatements are the cornerstone of economic development tools."



I'm glad they are expanding this refinery, but amazed at the same time that the City would agree to such an expensive carrot to dangle! Lowell, I would like to work for you and your $6 million party store!
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Detroitrise
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Username: Detroitrise

Post Number: 255
Registered: 09-2007
Posted on Monday, October 15, 2007 - 12:47 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"The prevailing winds in Detroit are out of the Northwest. SW Detroit would be one of the best locations for the least amount of impact directly on the C of D. Detroit is an auto city and the city gets what the auto brings, good and bad, and for those that complain about 'expensive' gas prices, it helps to have a refinery in your backyard."

How do you figure that? The prevailing winds is out of the East or NE more time out of the year. That's how that stench of the Incinerator makes it Downtown. However, Detroit would be affected (mostly SW, possibly Downtown and the Westside) in the Summer as the prevailing winds are SE-S-SW.
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Goat
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Username: Goat

Post Number: 9873
Registered: 10-2003
Posted on Monday, October 15, 2007 - 12:52 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I have read some startling facts recently about the amount of taxes paid by corporations compared to the individual taxpayer. In the 60's corporate taxes paid to gov'ts was about 70% in total. Today, that total is now down to about 40%.
It tells you about the lies of corporate welfare doesn't it?
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Detroitrise
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Username: Detroitrise

Post Number: 257
Registered: 09-2007
Posted on Monday, October 15, 2007 - 12:54 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

^^^That's our Free Enterprise Economy (Corporations control everything).
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Ray1936
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Username: Ray1936

Post Number: 2098
Registered: 01-2005
Posted on Monday, October 15, 2007 - 1:06 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Nearly all in this country agree that more refining capacity is badly needed to help keep down the price of petrol.

But it appears that you in the Detroit area are all classical NIMBY's.

Hey, they gotta go somewhere.
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Sknutson
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Username: Sknutson

Post Number: 972
Registered: 03-2004
Posted on Monday, October 15, 2007 - 1:12 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

But it appears that you in the Detroit area are all classical NIMBY's.



As long as we can store all our nuclear waste at Yucca Mountain......
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Jt1
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Username: Jt1

Post Number: 10479
Registered: 10-2003
Posted on Monday, October 15, 2007 - 1:24 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

But it appears that you in the Detroit area are all classical NIMBY's.



I would be more receptive if our gasoline prices weren't always at or near the top of the country.

Allowing refineries in your back yard and paying top dollar is a double slap to the face.
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Ray1936
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Username: Ray1936

Post Number: 2100
Registered: 01-2005
Posted on Monday, October 15, 2007 - 1:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"As long as we can store all our nuclear waste at Yucca Mountain......"

Hey, Sknutson, I'm gonna surprise the dickens out of you.

I've been a supporter of the Nuclear Waste Depository at Yucca Mountain from the git-go. It's the ideal place to store that stuff; a darn lot better than in the urban areas it is currently stashed in. I've toured the site and am fully comfortable with it.

How's that grab you? :-)
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Sknutson
Member
Username: Sknutson

Post Number: 973
Registered: 03-2004
Posted on Monday, October 15, 2007 - 1:57 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I'm sufficiently grabbed.

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