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McDaniel Concerned By Exxon Property Plan

This week, Exxon Mobil Corp. provided property owners in the Northwoods subdivision in Mayflower a 38-page proposal for either purchasing their homes or providing some compensation as a result of the company's Pegasus pipeline rupture and spill.  The complex proposal offers a variety of options for property owners within the subdivision, but no compensation for others directly affected by the spill, including those who live near the "cove" area of Lake Conway.

LITTLE ROCK - This week, Exxon Mobil Corp. provided property owners in the Northwoods subdivision in Mayflower a 38-page proposal for either purchasing their homes or providing some compensation as a result of the company's Pegasus pipeline rupture and spill.

 

The complex proposal offers a variety of options for property owners within the subdivision, but no compensation for others directly affected by the spill, including those who live near the "cove" area of Lake Conway.

 

Attorney General Dustin McDaniel has reviewed the full proposal, and he issued this consumer alert today to share with affected homeowners and others his thoughts on the document, which he said fails to include provisions for fair compensation to all impacted property owners.

 

In addition, McDaniel reminded Arkansas consumers that he has created a Mayflower Consumer Response task force within his office to assist Arkansans with any concerns they may have related to the March 29 oil spill. Consumers may call the office at (800) 482-8982 or email OilSpill@ArkansasAG.gov.

 

As to Exxon's "Property Purchase and Price Protection Program," McDaniel said the proposal is too restrictive and it also unfairly addresses the impact of the spill on residents near the cove, as well as tenants of rented property.

 

"All the impacted residents deserve fair and equitable compensation from Exxon," McDaniel said. "This document contains various offers to homeowners, and only those in the Northwoods subdivision. These offers are exceedingly complicated and very different for homeowners from one area of the subdivision to the next. These complex options are not what residents of this area deserve. They all breathed the same air, faced the same inconvenience and had their lives upended. Exxon can and should do more."

 

Exxon's plan provides four options. The first option, identified as "Option A," gives subdivision residents the opportunity to receive a one-time payment to compensate for loss of home value as a result of the oil spill. To do that, homeowners will be provided a list of appraisers by Georgia-based Community Interaction Consulting, Inc. (CIC). That company was retained by Exxon and it has overseen other home-purchasing programs for oil companies.

 

Homeowners may choose from the list or pick their own appraiser, subject to review by CIC. Exxon would also conduct an appraisal. The payment would be based on the higher of the two appraisals.

 

Northwoods subdivision residents who choose what Exxon identifies as "Option A" may not select any of the other options presented by the company.

 

"Option B" is available only to owners of 22 out of the 63 homes in the subdivision. Those 22 were evacuated on March 29, the day of the spill. With this option, Exxon will directly purchase the property. No other homeowners, either in the subdivision or the cove, are eligible for the direct purchase of their home.

 

With "Option C," residents of the subdivision would list their homes for sale with a real estate agent. If the homes haven't sold within 120 days, Exxon pledges to purchase the home. However, Option C carries a number of caveats, including a requirement that residents accept any purchase offer that is higher than the appraisal price. The Georgia-based consultant may reduce the list price if the house is not purchased within 45 days of listing; and, in the event Exxon buys the home, then the oil company will not pay real-estate commissions.

 

As to the option of selling to other buyers, McDaniel said he was concerned about whether that is practical considering the area is undergoing recovery and remediation, with heavy industrial equipment and security present.

 

"Option D" states that Exxon will pay moving expenses and the first three months' rent at a new location for tenants who rent property that the owner has sold to Exxon. The oil company would require the tenants to vacate the home before the home sale is closed.

 

In the event a tenant buys a home, Exxon will pay a closing-cost allowance directly to the property-closing agent. Landlords with tenants who terminate an existing lease because of the spill would receive up to one year's rent from Exxon under the proposal. The tenant would not be provided compensation in the event he or she leaves before the end of a lease period, even though landlords would be legally entitled to damages.

 

Also, nothing in "Option D" considers any compensation for a tenant if a landlord sells a home to another buyer, as in "Option C."

 

McDaniel said the plan also fails to contemplate "For Sale by Owner" situations and is lacking in the amount Exxon sets aside to offer residents who retain counsel to review the complex plan. Exxon will give homeowners in the subdivision $500 to pay for a "program option" review.

 

"As an advocate for all Arkansas consumers and an advocate for basic fairness, I hope the plan is subject to revision," McDaniel said. "Exxon has already made one attempt to revise the plan it presented to property owners, and I hope that indicates the company would be willing to make further upgrades."

 

To review the proposal and find other information related to the Mayflower oil spill, visit www.ArkansasAG.gov.

 

For other consumer-related concerns, call the Attorney General's Consumer Protection Hotline, (800) 482-8982, or visit www.GotYourBackArkansas.org.

 

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