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Wichita tags up to $7.8 million to help Cornejos redevelop toxic former refinery site

Wichita Eagle logo Wichita Eagle 2/16/2022 Dion Lefler, The Wichita Eagle

Feb. 15—Wichita has approved a new tax district that will provide between $6 million and $7.8 million to help two prominent Wichita businessmen redevelop a heavily polluted former oil refinery site.

The money from the city will help finance a 1 million-square-foot complex of warehouse, manufacturing, office and retail space at the 115-acre site of the abandoned refinery on 21st Street North just west of I-135.

The city's contribution to the project will be funded with a tax increment finance district that will borrow $6 million and then pay it back by diverting future increases in property taxes generated by the new development.

The city will also provide as much as $1.8 million in additional pay-as-you-go TIF funding, if it's available after the debt is paid.

The project is proposed by brothers Marty and Ron Cornejo, former owners of the Cornejo and Sons Construction company, a longtime prominent city contractor and landfill operator.

Council members hailed the plan, which passed unanimously.

"I really appreciate somebody taking on such a project to reclaim land that frankly has been polluted and isn't up to market value, in hopes of turning it around so it can be used for economic growth and development," said Mayor Brandon Whipple.

Former Derby Refinery

The former refinery, commonly known locally as the Derby Refinery, was originally built in the 1930s.

Its final owner, Houston-based El Paso Corp., bought it in 2001 from Coastal Corp. but closed it down about three years later.

The company dynamited a giant tower that had become a rusty eyesore looming over the property and cleared the site in 2005.

At Tuesday's council meeting, Marty Cornejo said he and his brother have been working for years to get clearance from state environmental officials to prepare the site for redevelopment.

"KDHE, (we) spent many days with those folks," he said. "The soil waste management plan was approve by KDHE in May of 2020 . . . We are all comfortable with the site.

"KDHE is really looking forward to have that site completely capped and covered and what that means is pavement and buildings, the sooner the better. That will allow less infiltration (of toxic chemicals) into the groundwater, so everybody's pushing to get to that point."

The Cornejos have already started building their first warehouse at the site. The site plan calls for 14 buildings, including four mammoth warehouse-industrial buildings between 180,000 and 200,000 square feet.

Without the tax increment district, the project would not feasible, said Mark Elder of the city economic development office.

Without the TIF, the Cornejos would lose about 5.5% on the project. With TIF, they're estimated to make a 9.2% return, he said.

In addition to the TIF district, the Cornejos will also receive assistance under the city's spec building program, which helps developers build industrial buildings without having an identified tenant.

Andrew Nave of the Greater Wichita Partnership said the development is needed to help fill a void in the city for modern, large scale industrial buildings with high ceilings to attract new businesses or allow for expansion of existing businesses.

This story was originally published February 15, 2022 12:48 PM.

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