By Katie Burke CoStar News
Hilco Redevelopment Partners has embarked on what it expects to be a 15-year construction timeline for an ambitious project called the Bellwether District, a redevelopment of the former Philadelphia Energy Solutions refinery on a site that encompasses about 2% of Philadelphia's entire land mass.
Backed by a $500 million loan from PCCP, a Los Angeles private equity firm, Hilco's plan is to transform the former refinery into an environmentally friendly industrial and life science hub. The developer said it is expecting to include about 10 million square feet of Class A industrial space and between 4 million to 5 million square feet of research and development space at at 3144 W. Passyunk Ave. HRP's joint venture partner on the project is Caisse de dépôt et placement du Québec, the real estate arm of one of Canada's largest pension funds.
Why it matters: Once completed, the site is projected to create an estimated 19,000 permanent jobs, and the developer said it will serve as home to global giants in the e-commerce, logistics and life sciences industries. HRP CEO Roberto Perez said the 150-year-old oil refinery used to produce 16% of all of the city's greenhouse gases but will now become "an environmentally sustainable home for Philly workers and some of the world's leading businesses."
Similar to Previous Project: Neither the $500 million loan from PCCP nor the process of redeveloping a complex industrial site is unfamiliar to Hilco Redevelopment Partners. Perez said the developer was drawn to the potential to overhaul the former Philadelphia Energy Solutions refinery because of a similar endeavor it completed in its transformation of a 3,300-acre former Bethlehem Steel mill site in Baltimore. There, HRP completed Tradepoint Atlantic, a trimodal logistics complex that has so far created more than 8,500 jobs and is expected to contribute as much as 1% to the state of Maryland's gross domestic product by 2025.
PCCP has backed several HRP projects to date, and HRP Chief Operating Officer Benjamin Spera said the private equity firm "understands the complexities of our projects, which often require complicated remediation and site-clearing work."
What they're saying: "We feel privileged to be stewards of a project that will have a lasting impact on the region and elevate Philadelphia’s role in both the e-commerce and life science industries," Perez said, adding that 99% of legacy petroleum products already have been removed from the site and demolition is about 60% completed. "We started with one ambitious project, and now we’re re-creating the gateway to Philadelphia and we’re building new communities in Boston and Washington, D.C. I look at every project and think, 'How are we going to transform the economy, environment and community here?' We’re just getting started."
Fun fact: Hundreds of miles of pipeline have been dismantled so far, and Perez said there are still hundreds of miles left to go. Once removed, HRP will have taken out enough pipeline to stretch from Philadelphia to Florida.
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