Marathon Oil offers more money in Detroit neighborhood buyout plan

Apr 24, 2012

The Marathon Oil refinery in southwest Detroit is in the process of expanding its facility to process heavier crude oil from Canada.

The expansion brings the company's new refining equipment closer to Detroit's Oakwood Heights neighborhood.

Marathon has been offering to buy homes in this neighborhood to create a buffer zone between the refinery and other residential areas.

Some homeowners in Oakwood Heights have signed on with the buyouts, others have stayed put.

The Detroit News' Jim Lynch reports Marathon has upped the amount it's willing to pay:

This month, Marathon officials said 86 percent of the owners have chosen to enroll in the buyout program — meaning they are willing to have their home appraised and see a monetary offer from the company.

Marathon is sweetening the pot, too, as it initially set a minimum appraisal price of $40,000 per home but already has bumped that figure up to $50,000.

The buyout plan is expected to head off lawsuits from those who live in this area. So far, the program has avoided legal entanglements, but it has generated plenty of hard feelings.

Oakwood Heights is an area surrounded by heavy industry. In addition to the refinery, there's the city's sewage treatment plant, a salt mine, a steel factory, and other industries.

Michigan Radio's Rebecca Williams talked to neighbors in this area for her Culture of Class story last November. 

She found that for some, the amount Marathon is offering is too low.

Some people who are eligible for the buyout say it’s not enough money.

Carrie Elliott says he’s too old for a new mortgage... and he doesn’t think he’d qualify for one anyway.

“I’m unemployed, got laid off. I don’t have the money to start a new home.”

He says he’d consider moving for $100,000 dollars.

Williams also talked with Linda Chernowas. She's been diagnosed with asthma and reflux laryngitis. When her doctor heard that she lived in zip code 48217, he suggested she move.

At the time, she told Williams that she wasn't sure she wanted to give up her home, but it looks like she's more willing to move these days.

From the Detroit News article:

Chernowas said she and her husband, Jim, hadn't planned on accepting the Marathon offer, but things have changed. Initially, they had no interest in selling the home they had paid off long ago and taking on a new mortgage to buy one somewhere else.

They know the neighborhood will soon be completely different. Newly vacant lots are being created by demolitions and each one makes the neighborhood less appealing to a potential buyer.

"I don't really care to leave," Linda Chernowas said. "But I know it's better if I do."

The refinery expansion is expected to be completed by the end of this year. The News reports the company hopes to have the buy-out program completed by the end of next year.