STATE TAX CREDITS
Marathon unit could expand in Findlay
Offer may add 150 jobs, $15M payroll
1/27/2014COLUMBUS — A state agency agreed on Monday to extend its job-creation, tax-credit deal with Marathon Petroleum Corp. to expand its Findlay headquarters, in part to persuade the company to keep MPLX, its new distribution subsidiary, in Findlay.
The move is expected to create 150 jobs worth $15 million in new payroll.
The Ohio Tax Credit Authority voted to extend Marathon’s 60 percent, 10-year tax credit, approved in 2011, to 14 years.
The new jobs are expected to pay an average of $48 per hour. The package was negotiated by the private, nonprofit economic-development corporation, JobsOhio, and then placed in the state panel’s hands for final approval.
JobsOhio characterized as “fierce” the competition from other states for MPLX, which was spun off from Marathon Petroleum in late 2012.
Marathon is expected to expand its corporate headquarters in Findlay.
In the process, it recommitted to maintaining the 1,650 jobs it promised when it was itself a beneficiary of a tax-credit package in 2011.
In a statement, Marathon did not indicate that it had accepted the offer.
“The Ohio Tax Credit Authority, in collaboration with the Ohio Development Services Agency and JobsOhio, has approved and offered Marathon Petroleum Corp. a four-year extension of the Ohio Job Creation Tax Credit if MPC expands its corporate headquarters in Findlay,” the company said in a statement to The Blade. “MPC is currently evaluating several options for its headquarters and anticipates making a decision in the near future.”
But in a news release, JobsOhio stated Marathon disclosed last month its intent to choose Ohio over other states for the Findlay expansion and MPLX headquarters operations.
A Marathon spokesman said the company has “evaluated different opportunities for MPLX’s headquarters, including other locations” but did not identify any specific cities.
MPLX shares a leadership team with Marathon, and in its 2012 year-end filing with the U.S. Securities and Exchange Commission, said it had no direct employees.
A Marathon spokesman said Monday the 150 new jobs the company is expected to create will be employees of Marathon Petroleum, but will provide services to both companies.
MPLX distributes and stores crude oil and other petroleum products for Marathon and other producers.
It owns some 2,800 miles of pipeline, storage facilities in the Midwest and Gulf Coast regions, a Mississippi River barge terminal just north of St. Louis, and a butane storage cavern in West Virginia.
Its operations have been managed from Findlay since the spin-off.
“This kind of investment really hasn’t been seen in about four decades,” state Rep. Robert Sprague (R., Findlay) said.
“It’s coming at a time when the economy begins to rebound,” he said. “The jobs Marathon is going to bring to this area are going to be filled not just from Findlay, but by professionals who might live in the Toledo suburbs and some of the communities around Findlay. These jobs are simply unbelievable in terms of salary and benefits — engineers and professional people working at the headquarters.”
David Mustine, JobsOhio’s general manager for energy, polymers, and chemicals, said he would leave it to Marathon to divulge which states made plays for MPLX.
“We knew it would be highly competitive,” he said. “A company like Marathon could have located these kinds of facilities anywhere. A lot of the energy industry is based in Houston. … We certainly considered the Gulf Coast to be competition, as well as other areas of the Midwest and Southeast.”
Mr. Mustine also declined to discuss other elements of the incentive package, some of which are still being negotiated.
The city of Findlay, the Findlay-Hancock County Alliance, and the Regional Growth Partnership in Toledo were all part of the talks.
Officials from the Findlay-Hancock County Alliance and the Regional Growth Partnership praised the work Marathon has done in northwest Ohio, and said the company is important to the region.
“I think what we’re excited about here regionally is to see a company like Marathon, which is one of the largest companies in the state, continue to grow and make investments here," said Gary Thompson, the RGP’s chief operating officer.
But he and Anthony Iriti, economic development director for the Findlay-Hancock Alliance, said they had few additional details about the proposed project.
“Marathon really hasn’t come out and made this whole thing final. The tax-credit authority is just one step in the process they have to go through to make their decisions,” Mr. Iriti said. “At this point there’s really not a whole lot I can say.”
‘‘This is huge for Findlay, Hancock County, and the state as a whole,” state Sen. Cliff Hite (R., Findlay) said. “It’s my understanding that the state’s input has not yet been finalized in all categories. I do know that they have been aggressive to make Marathon Petroleum bigger and better than it already is.”
Marathon Petroleum — the largest firm in northwest Ohio, the largest oil refiner in the Midwest, and the fourth largest refiner in the country — was itself spun off from Marathon Oil Corp in Houston.
In 2011, it received its own 75 percent tax credit lasting 15 years to retain its 1,650 Findlay jobs in addition to the 60 percent, 10-year credit to create 100 more jobs. The company said it has, in fact, added 220 jobs.
The 2011 deal was consummated shortly before JobsOhio took shape and before Gov. John Kasich appointed its board.
Mr. Mustine stressed that the 150 new Ohio jobs would be in addition to the 220 added at Marathon Petroleum.
There would, however, be some overlap in the job commitments of Marathon and its subsidiary.
For instance, Marathon’s extended commitment to retain jobs in Findlay remains at 1,650 and does not include the 220 additional jobs created since 2011.
A company spokesman said Monday that Marathon now employs about 1,900 people in Findlay.
Mr. Mustine said having a pipeline and storage distribution system and its Fortune 500 parent in Ohio would be an asset, given the development of Utica Shale oil, primarily in southeast Ohio.
MPLX previously announced plans to build the $140 million, 49-mile Cornerstone Pipeline from Harrison and Carroll counties to Marathon’s Canton refinery.
Staff writer Tyrel Linkhorn contributed to this report.
Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.