City council approves $6.5 million chemical plant in Newton, Kansas

September 5, 2014

The Newton City Council recently approved a financing arrangement that will support the construction of a 20,000-square-foot chemical manufacturing facility at the Newton City-County Airport. In addition to the chemical plant, the funding will also cover construction of a 5,000-square-foot hangar and taxiway at the site.

According to the Wichita Eagle, the city of Newton facilitated a loan from Citizens State Bank to cover the estimated $6.5 million cost of construction. The municipal government is planning to lease the site to ABI Chemicals, a subsidiary of Wichita-based ABI Group, at rates that will cover the cost of servicing the construction loan.

ABI will reportedly use the manufacturing facility to produce high-tech coatings for use in the aerospace industry. It is currently developing these materials through a partnership with the National Institute for Aviation Research at Wichita State University.

Even if public funds aren't being used to directly finance the plant's construction or operation, the municipal government's involvement  may lead to heightened scrutiny of potential environmental liabilities. Furthermore, from a regulatory compliance perspective, the plant's operation will also be affected by it's location at the airport. For instance, this blog previously looked at the treatment of mobile refuelers under the EPA's Spill Prevention, Control and Countermeasure (SPCC) Rule.

Most facilities are covered by Sections 112.8(c)(2) and (11), which mandate the provision of sized secondary containment systems in areas where mobile refuelers operate. However, refuelers operating at airports and other transportation-related facilities are subject to loading/unloading rack requirements and regulated by the U.S. Department of Transportation. Other parts of the SPCC rule, including the general secondary containment requirements and record-keeping provisions, apply to refuelers at all sites.