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Norfolk Southern evades calls to compensate East Palestine residents

Norfolk SouthernIn early February, a terrible tragedy hit the people of East Palestine, Ohio.

Toxic compounds were released into the air and nearby water when a Norfolk Southern train derailed.

After being evacuated, residents returned with trepidation, but the damage had already been done.

While Norfolk Southern has contributed to the restoration of normalcy in East Palestine, many individuals have voiced anger and frustration.

Jim Stewart

James Stewart is one of numerous East Palestine locals who have expressed dissatisfaction with the train transit company.

He was prepared to sell his property and retire when the Norfolk Southern train collapsed and spilled dangerous goods.

Stewart is now anxious about the value of his property.

He and his wife intended to offer the house in the spring, when prices were still climbing and inventory was scarce.

They also discussed his son’s family purchasing their own property across the street from them.

“Since the derailment, I lost all those options,” said Stewart. “Who is going to buy contaminated land?”

“The older people are willing to stay and live it out. The younger bunch, they are smarter. They’re thinking of their families.”

“I wouldn’t want my grandchildren here. We don’t know if the ground is going to be good enough to grow grass. There are too many unknowns.”

During a Town Hall meeting on February 22, James Stewart voiced his frustrations with the derailment.

“You burned me,” he told Norfolk Southern CEO, Alan Shaw.

“We were going to sell our house. Our value went phoom.”

Shaw said when asked if Norfolk Southern planned to acquire Stewart’s house: “We’re going to do what’s right for this community.”

James Stewart works at a commercial baking business as a manager.

“I worked hard. I’m still working,” he reportedly told Shaw. “I’m in the 44th year at my job. I wanted to get out. Now I’m just stuck.”

When Stewart bought the house in 2016, it was worth $85,000.

He believes the incident has cost him a large amount of money.

According to Zillow, the property was appraised at $135,000 in February, but due to a lack of transactions, a current assessment is difficult to come up with.

“I’ll never get that. I’ll be lucky to get what I paid for it, if that,” Stewart said regarding the estimate.

He also believes that the improvements and testing needed to ensure the house’s safety would be too expensive.

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Senate hearing

Alan Shaw and Norfolk Southern have let many people down, including Jim Stewart.

Neither the CEO nor the firm has agreed to make up the difference in the property’s value.

At last Thursday’s Senate session, Sen. Ed Markey asked Shaw four times to commit to paying homeowners.

Shaw, on the other hand, just responded to much frustration, saying: “Senator, I’m committed to do what’s right.”

Markey rejected his response, stating:

“Will you commit to ensuring that these families, these innocent families do not lose their life savings in their homes and small businesses? The right thing to do is to say, ‘Yes, we will.'”

“These families want to know long term, are they just going to be left behind. Once the cameras move on, once the national attention dies down, where will these families be?”

“I think they’re going to be in the crosshairs of the accountants of Norfolk Southern saying ‘We’re not going to pay full compensation.'”

Compensation

Compensation for homeowners and businesses is not difficult for a company the size of Norfolk Southern.

East Palestine is home to around 5,000 people and 2,600 residential buildings.

The average property value in January 2023, according to Attom, will be $146,000.

The total value of all residential real estate in town, including single-family homes and multi-family constructions, is roughly $380 million.

The figures reflect a minor fraction of Norfolk Southern’s revenue.

The company made $4.8 billion in operating income and $3.3 billion in net income in 2022, up 9% over the previous year.

As of December 31, Norfolk Southern has $456 million in cash on hand.

In 2022, the firm planned to return earnings to shareholders by repurchasing $3.1 billion in shares and paying $1.2 billion in dividends.

Several days before the disaster, Norfolk Southern declared a 9% dividend increase.

The board of directors of the firm approved a $10 billion share repurchase plan in 2022, with the authority to acquire $7.5 billion of the remaining funds as of December 31.

Senator Jeff Merkley questioned the firm during the hearing on Thursday:

“Will you pledge to no more stock buybacks until a raft of safety measures have been completed to reduce the risk of derailments and crashes in the future?”

Alan Shaw, on the other hand, sidestepped the question by saying, “I will commit to continuing to invest in safety.”

According to OpenSecrets.org, Norfolk Southern also spends a lot of money on lobbying, spending $1.8 million last year.

Senators questioned the lobbying expenditures throughout the session, primarily because Shaw declined to commit to supporting the Senate’s bipartisan plan to improve railway safety in the aftermath of the catastrophe.

When asked about the bill’s provisions, Alan Shaw declined to endorse them.

Instead, he answered: “We are committed to the legislative intent to make rail safer.”

Image source: The Colombus Dispatch

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